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S. Korea, EU to hold talks on free trade deal next month

MCOT News, Thailand

S. Korea, EU to hold talks on free trade deal next month

26 October 2008

SEOUL, Oct. 26 (Yonhap) — Trade ministers from South Korea and the European Union (EU) are expected to meet in Brussels early next month to iron out divisive issues related to their free trade negotiations, officials said Sunday.

Since signing a free trade agreement (FTA) with the United States last year, South Korea has held seven rounds of negotiations with the EU in a bid to gain greater footing in the 27-nation economic bloc, South Korea’s second-largest trading partner after China.

During their seventh round in May, the two sides reported "significant" progress in their negotiations, saying they had agreed to reach a deal within the year.

According to officials, South Korean Trade Minister Kim Jong-hoon will meet with his EU counterpart Catherine Ashton on Nov. 10 to resolve contentious issues such as auto trade and rules of origin.

A date for the eighth round of talks has not yet been set, but will be held in December, they said.

On Saturday, South Korean President Lee Myung-bak and his EU counterparts vowed in Beijing to complete the free trade agreement this year.

On the sidelines of the Asia-European Summit, European Commission President Jose Barroso vowed to conclude the talks "as soon as possible." Lee told French President Nicolas Sarkozy he hoped to do so before the end of the year.

The negotiations have made little headway as both sides have been reluctant to accept each other’s demands on the divisive issues.

Bilateral trade came to US$89.8 billion in 2007, with some unofficial studies suggesting an FTA would boost that figure by as much as 40 percent in the long run. The EU is also the largest foreign investor in South Korea, with outstanding investment reaching $44.8 billion at the end of 2007.

South Korea is seeking to sign FTAs with as many countries as possible in an effort to strengthen its export-oriented economy. Currently, South Korea has FTAs with Chile, Singapore and the European Free Trade Association, as well as a partial pact with the Association of Southeast Asian Nations.

Seoul is also seeking similar trade deals with Canada, India and Mexico.