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By MARI YAMAGUCHI
Associated Press Writer

TOKYO -- Japan's food safety panel on Monday ruled that relaxing domestic cattle testing standards for mad cow disease won't put consumers at risk, raising the possibility that Tokyo will reopen its lucrative market to U.S. beef imports.

That could be good news for Creekstone Farms Premium Beef, which had a lucrative trade with Japan before that country shut its borders to U.S. beef imports after the discovery of a case of mad cow disease in Washington state in December 2003. Asian markets, mainly Japan, had represented up to 40 percent of Creekstone's business.

Creekstone laid off 150 workers at its Arkansas City meat packing plant in December. The layoffs resulted from a decline in the beef market and from the U.S. Department of Agriculture's rejection of Creekstone's request to test all the cattle it processes for mad cow disease.

The Food Safety Commission found that tests for the fatal bovine illness on cattle aged 20 months or younger were unable to detect the proteins linked to the fatal bovine illness. Scientists believe the proteins associated with mad cow disease do not accumulate in cows that young.

''We have concluded that the risk of excluding cows younger than 21 months old from inspections is negligible or extremely small,'' Yasuhiro Yoshikawa, chairman of the panel's scientific experts, told reporters.

Since Japan banned U.S. beef imports in December 2003, Washington has been steadily pushing Tokyo to drop the ban, but Japanese officials have insisted that all imported beef come from animals tested for mad cow disease, also called bovine spongiform encephalopathy.

Japan has tested all cattle for mad cow disease since discovering its first case in 2001. Japan has found 16 animals with the disease, most recently a Holstein cow on Sunday.

The issue has caused discord between the two major trading partners, with some U.S. lawmakers threatening possible sanctions against Japan if the ban isn't lifted.

During her March 19 visit to Tokyo, Secretary of State Condoleezza Rice pressed Japan to end the ban. Japan was American beef's most lucrative overseas market, estimated at $1.7 billion a year.

Monday's ruling by Japan's Food Safety Commission allows Tokyo to begin considering whether to lower restrictions on American beef imports. The health and agriculture ministries will now consider revising food safety standards, which would allow Prime Minister Junichiro Koizumi's administration to restart discussions with U.S. officials about resuming American beef imports.