Trade deal

After failing to reach a final agreement, South Korea's President Lee Myung-bak, EU Commission President Jose Manuel Barroso and Czech President Vaclav Klaus said they would accelerate negotiations on the $100 billion (71.4 billion euro) trade deal so that it can be signed by the end of the year.

"The most important thing is that we move towards a more practical cooperation than in the past," said Klaus, whose country holds the six-month, rotating EU presidency. He added that the free trade agreement "will not be signed before the end of the Czech presidency in June."

The leaders at the talks, which included Benita Ferrero-Waldner, EU commissioner for external relations, and Catherine Ashton, EU trade commissioner, did agree to cooperate on climate change and the global economic crisis. They were, however, tripped up by a so-called duty drawback clause to protect European industry.

Under duty drawback, South Korean companies can import inexpensive parts from elsewhere and then receive reimbursement for duties paid, if the finished products are sold in the EU. European carmakers are particularly concerned about this potential advantage.

The EU Commission would like to limit the amount of foreign components in any product to less than 45 percent.

The EU is the biggest investor in South Korea and the country's second-largest trade partner after China. This would be the EU's first major trade pact with an Asian nation.

hf/dpa/Reuters
Editor: Andreas Illmer