April 28 (Bloomberg) — U.S. Commerce Secretary Gary Locke said failure by Congress to pass a free-trade agreement with South Korea would hand an advantage to rivals such as Australian beef exporters.

“We need to ratify this agreement as quickly as we can to make sure that our American beef producers have access without ending up losing to Australia,” Locke, President Obama’s candidate to be the next ambassador to China, said today in an interview in South Korea. The U.S. would also continue to push for greater market access in China, he said.

U.S. lawmakers’ push to ratify the deal with stalled trade agreements with Colombia and Panama in a package may hamper the Obama administration’s goal to have the four-year-old South Korea FTA approved before July 1. Australian Prime Minister Julia Gillard and South Korean President Lee Myung Bak this week in Seoul agreed to conclude free-trade agreement talks this year.

South Korea imported 90,569 tons of U.S. beef and 121,790 tons from Australia last year, together accounting for about 87 percent of the market, according to data from Korea Meat Trade Association. Imports will rise this year after an outbreak of foot and mouth disease led the government to slaughter about 3.5 million animals, mostly pigs and cattle.

Demand is increasing with rising wealth, with beef consumption in South Korea up about 30 percent in the five years through 2010, government data shows. Gross domestic product per person, adjusted for the cost of goods, hit a record $27,100 in 2009, the latest available World Bank data show, 57 percent higher than at the beginning of the decade.

Mad Cow Disease

Beef imports are a contentious issue in South Korea, where agriculture is protected by tariffs. Health concerns after an outbreak of bovine spongiform encephalopathy, or mad cow disease, helped fuel violent protests in 2008 when Lee agreed to open the South Korean market to U.S. imports.

“We have an education challenge ahead of us,” said Locke, who was speaking in Gimpo, outside Seoul, where he toured a factory of cell-phone maker Pantech Co. Concerns over mad cow disease were not just an issue in South Korea, he said.

Locke, a Chinese-American, is waiting for confirmation by the Senate of his appointment as ambassador in Beijing.

China poses “one of America’s most critical and complex diplomatic, economic and strategic relationships,” he said March 9. 

China Trade

The U.S. reported a $273.1 billion trade deficit with China last year, a 20.4 percent increase from 2009 and the biggest U.S. bilateral trade gap.

Departing U.S. Ambassador to China Jon Huntsman said on April 6 said the U.S. will defend the rights of Chinese activists. China has detained dozens of human rights activists and restricted reporting freedom for foreign journalists following calls in February for nationwide rallies against corruption and misrule inspired by pro-democracy protests in Arab countries.

Huntsman, who is stepping down from his post at the end of April, was among the spectators at a Beijing rally on Feb. 20.

The South Korea deal, also pending approval by South Korean legislators, is the largest U.S. trade pact since the North American Free Trade Agreement. The accord would increase exports of U.S. goods by $10.9 billion a year when in full effect, according to the U.S. International Trade Commission.

Auto Exports

The U.S. and South Korea agreed in December to change provisions in the pact, which had been stalled by legislators since it was signed in 2007 over U.S. demands for improved access for its cars and beef. While the revised agreement included scaling back initial tariff cuts for vehicles by both countries, U.S. beef wasn’t covered. 

South Korea restricted beef imports in 2003 when the U.S. discovered its first case of mad cow disease. After resuming purchases in 2008, the government restricted shipments to those from cows aged younger than 30 months. South Korean officials including Trade Minister Kim Jong Hoon have ruled out holding talks on scrapping age limits on U.S. beef imports.

South Korea reported a trade surplus of $9.4 billion with the U.S. in 2010, with two-way trade topping $90 billion, according to the Korea International Trade Association.

The pact will help South Korea’s trade surplus with the U.S. widen by $463 million annually over 10 years, aided by increased exports of automobiles, electronics and textiles, according to a 2007 study by South Korean think tanks, including the Korea Institute for International Economic Policy.

—With assistance from Michael Forsythe in Beijing and Sungwoo Park in Seoul. Editor: Ben Richardson, Brett Miller

To contact the reporter on this story: Bomi Lim in Seoul at blim30bloomberg.net; Stephen Engle in Seoul at sengle1bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg in Hong Kong at phirschbergbloomberg.net