By Missy Ryan
Reuters
Wednesday, January 17, 2007; 6:06 PM

WASHINGTON (Reuters) - South Korean officials in Washington are making "encouraging" signs that could bring rapprochement in a bitter feud over U.S. beef exports, U.S. lawmakers said on Wednesday.

Max Baucus, chair of the Senate's influential Finance Committee, called a closed-door meeting with Korean Ambassador Lee Tae-sik and more than half a dozen fellow senators "encouraging," and said the South Korean official was taking steps toward resolving a row that has enraged the U.S. beef industry and overshadowed talks on a coveted free trade agreement.

The ambassador has consulted the higher-ups in Seoul, and is taking steps to find a resolution "in a way that is fair to both South Korea and the United States," Baucus said.

Sen. Chuck Grassley of Iowa, another U.S. politician who has excoriated Seoul's refusal to accept beef shipments it says have contained prohibited animal parts, called the meeting "positive."

Since November, Seoul turned away a string of U.S. beef shipments it flagged as containing bone chips or other prohibited animal parts.

The news dashed hopes among American cattle interests of an imminent revival of a lucrative beef trade with the Asian nation that had been halted since 2003 when mad cow disease was discovered in the United States.

The row has cast a long shadow in talks on the proposed bilateral trade agreement, which entered a sixth round this week in Seoul. While the beef issue isn't formally part of the talks, U.S. negotiators say it needs to be resolved before progress is made on the coveted pact.

Sen. Ken Salazar of Colorado, meanwhile, said the Korean officials had proposed a technical solution to the row that would presumably be reviewed by the Agriculture Department, Salazar said. But he refused to divulge further details.

"The ambassador was assuring us that he was going to try to move on this quickly because he recognizes the importance of the issue," he added.

The Korean ambassador declined comment.

The meeting also included Sen. Orrin Hatch of Utah, Jon Tester of Montana, John Thune of South Dakota, and others.