Sth Korea, EU agree to push for early FTA conclusion

(SEOUL) - South Korean and European Union leaders called Saturday for the early conclusion of a major free trade agreement and urged North Korea to return to nuclear disarmament talks.

The agreement was reached at a summit overshadowed by the death earlier in the day of former President Roh Moo-Hyun in an apparent suicide.

His successor Lee Myung-Bak held talks with European Commission President Jose Manuel Barroso and Vaclav Klaus, president of the Czech Republic which currently holds the EU's rotating presidency.

The leaders expressed satisfaction that progress had been made on negotiations for a trade pact and on updating a "framework" agreement covering political and economic relations, a statement said.

"The leaders expressed hope that negotiations for both agreements should be wrapped up at an early date," it said.

"On the basis of the two agreements, they agreed to make efforts to enhance bilateral ties to relations of strategic partners."

The EU and Korean leaders urged North Korea to return to six-party disarmament talks and said its April 5 rocket launch undermined regional peace and stability.

The communist state said the launch put a satellite into orbit but other countries saw it as a disguised ballistic missile test.

The UN Security Council censured the launch and tightened sanctions, prompting the North to quit the disarmament talks.

South Korea and the EU began negotiations on a free trade accord two years ago. In March they reached a deal on most points but follow-up talks have failed to settle two outstanding issues -- duty drawback and rules of origin.

South Korea wants permission to refund import tariffs to its manufacturers which use imported materials to make products for exports. Brussels says this would give Korean firms an unfair advantage.

On rules of origin, South Korea wants items made at a Seoul-funded industrial complex in North Korea to be treated as South Korean goods.

The 27-nation European bloc was South Korea's second largest trading partner after China last year, with two-way trade worth more than 90 billion dollars.

The EU is the largest foreign investor in the country, with outstanding investment reaching 43.40 billion dollars at the end of 2007.

The leaders also agreed on closer cooperation on issues such as climate change, the global economic downturn and stalled world trade liberalisation talks.