US-Japan beef row unresolved till exports flow: Schwab

WASHINGTON (Reuters) - The United States will not count its beef trade dispute with Japan as settled until Tokyo opens borders that are closed due to fear of mad cow disease, U.S. trade chief Susan Schwab said on Friday.

Officials from both nations agreed earlier this week that U.S. beef sales will resume after Japan inspects U.S. beef processing plants. But with Toyko's ban in place almost continually since December 2003, political pressure is rising in Washington to seek sanctions against it.

A dozen U.S. senators from farm and ranch states filed a bill on Wednesday proposing sanctions of $3 billion a year if Japan did not end its ban by August 31. The Senate Appropriations Committee approved language on Thursday calling for similar sanctions unless trade restarts by end of summer.

Asked about a conversation she held with Japan's Agriculture Minister Shoichi Nakagawa earlier on Friday, Schwab said: "I stressed the importance that we move ahead with the commitments that were made, related to reopening the Japanese market."

"There is a process involving Japanese inspectors and reviewing U.S. plants ... and we are optimistic that the process will go as agreed. But the proof is when beef trade starts flowing again," she said at a news conference.

"Quite frankly, unless and until beef trade starts flowing again, we haven't resolved the problem," Schwab said.

Japanese officials have said inspection of U.S. beef plants, due to start later in June, will take about a month. Beef shipments will only be allowed into Japan, the longtime No.1 importer of U.S. beef, from U.S. plants that Japanese inspectors confirm as meeting safety requirements.

Last December, Japan lifted a two-year-old ban on U.S. beef and beef offal, imposed due to concerns about mad cow disease, on condition that the meat was only from animals aged up to 20 months and that risk materials such as spinal cords were removed before shipment.

But a month later it suspended imports because Japanese inspectors found some of the banned materials in a veal shipment from a New York company.

The United States has struggled to restore beef exports to overseas markets, including Japan and South Korea, which totaled $3.8 billion annually before mad cow disease, or bovine spongiform encephalopathy (BSE) was first discovered in Washington state in December 2003.