South Korea blocks US beef after banned parts found

SEOUL, Aug 2 (Reuters) South Korea effectively blocked all US beef imports from reaching store shelves today after banned parts were found in a recent shipment, a move which could hinder the passage of a sweeping bilateral free trade pact.

The discovery of unauthorised animal parts in a July shipment, including spinal material, comes as the United States pushes for a full reopening of what once had been the third-largest overseas market for its beef.

Seoul ended a 3-{ year ban last month on US beef that was prompted by a 2003 outbreak of mad cow disease in the United States, allowing in boneless US beef from cattle under 30 months old.

But South Korea announced today it was stopping quarantine inspections of the US product, meaning beef sitting in warehouses would be prevented from reaching store shelves. It will now decide whether to ban American beef all together.

''South Korea will decide whether to ban US beef imports after seeing if Washington takes sufficient measures. We will ban it if the measures are not enough,'' Kim Chang-sub, an agriculture ministry official, told reporters.

South Korea will stop all US beef imports and return shipments which are waiting for inspection if the country decides to ban the product. US beef can be shipped to the country but cannot be brought to market until Seoul lifts the suspension of the inspections.

Industry experts said it is unlikely any US beef packer would risk sending meat at this time because of these measures.

US lawmakers have said they may not approve a free trade deal, the biggest for Washington in some 15 years, if Seoul does not completely open its market to US beef.

The South Korean agriculture ministry said it found spinal material in a box of an 18.7-tonne shipment of US beef imported on July 29. The beef from a Cargill [CARG.UL] plant has been returned and Seoul has banned beef from that plant, Kim said.

''US beef which is sold now in South Korean stores is safe as it already passed through inspection,'' he added.

South Korea has found bones and chips in other shipments, which led it to suspend imports from certain packers and return the product.

Last week, a South Korean animal quarantine committee held off on a decision to open the market wider to include US beef on the bone, with members saying they were not sure if US packers could abide by safety rules Seoul deems necessary.

South Korean consumers have shown they want US beef, which sells for about half the price of similar cuts of the domestic product, by quickly snapping up American meat at supermarkets.

But farmers and activists, a key voting block for a presidential election this year, have been pressing for go slow.

The United States once accounted for more than two-thirds of South Korea's beef imports, or about 850 million dollar a year of products.

It is also hoping Japan, traditionally the top market for US beef exports, will increase the age limit of meat imported to 30 months from 20 months or younger currently.

The lower age rule has greatly restricted the volume of US beef supplied to Tokyo.

REUTERS CS SSC1345