WASHINGTON (Dow Jones)--South Korea is maintaining its option to destroy or send back shipments of U.S. boneless beef and temporarily suspend exports from a U.S. production facility if a shipment is found to contain small bone fragments or other problems, a U.S. government official said Thursday.
The U.S. has shipped no beef to South Korea since the country eased its ban Sept. 8, agreeing to allow in boneless beef cuts derived from cattle under 30 months old.
South Korean officials, in a meeting this week with U.S. government officials, refused to back away from their "zero tolerance" stance on possible bone fragments found in shipments of boneless beef from the U.S., said a U.S. government official who asked not to be named.
USDA spokeswoman Kristin Scuderi confirmed earlier Thursday that U.S. officials in Seoul on Tuesday "pressed for an appropriate trade response to bone fragments, but Korean representatives haven't agreed to revise their policies."
The South Korean officials wouldn't agree to change restrictions the country drew up that, according to a translation of a South Korean document, state the country may "return the export beef to its origin or destroy it if discrepancies with the health requirements of Korea are found."
The documented regulations, which U.S. officials had hoped to get changed this week, said that if problems are found, South Korea "may suspend temporarily export loading from the relevant meat establishment that produced the exported beef."
The U.S. official, speaking on terms of anonymity, said South Korea has let the U.S. government know it will, at least initially, "open 100% of the boxes" of U.S. beef sent to South Korea.
The U.S. government, the official said, may write a letter to South Korea expressing doubt on the "commercial viability" of the deal the countries have to resume beef trade.
U.S. industry and U.S. government officials have said the uncertainty presented by South Korea's restrictions may be making U.S. exporters nervous about doing business with South Korean importers.
Hong Kong has halted beef imports this year from some U.S. beef plants due to the discovery of bone fragments since it eased its ban on U.S. beef in December 2005. Hong Kong, like South Korea, agreed to only by boneless cuts of U.S. beef.
South Korea, Hong Kong and other major beef markets originally banned U.S. beef in December 2003 after the USDA announced finding the first case of mad-cow disease in the U.S.
Source: Bill Tomson; Dow Jones Newswires; 202-646-0088; bill.tomson@dowjones.com