SEOUL - TRADE ministers from South Korea and the European Union began a two-day meeting on Monday to try to settle disputes holding up a free trade deal.

Since signing a free trade agreement (FTA) with the United States in 2007, South Korea has held seven rounds of negotiations with the European Union, its second-largest trading partner after China.

Trade Minister Kim Jong-Hoon and EU Trade Commissioner Catherine Ashton will try to resolve differences over the auto trade and rules of origin, officials said.

'We are close to a gate that leads to a new era,' Mr Kim was quoted by Yonhap news agency as saying before the meeting.

'It will not be easy to resolve contentious issues, but having talks with an open-minded attitude is more important.' A date for the eighth round of talks has not been set, but the trade ministry has predicted a deal by the end of March.

European carmakers want South Korea to cut tariffs on their products. They are also pressing Seoul to apply international technical standards for imports instead of stricter domestic rules.

Two-way trade with the European Union was worth US$93.07 billion (S$138.4 billion) in 2007. The European bloc is the largest foreign investor in South Korea, with outstanding investment reaching US$43.40 billion at the end of 2007.

South Korea is seeking free trade pacts with as many countries as possible to bolster its export-dominated economy.

It already has deals with Chile, Singapore and the European Free Trade Association, as well as a partial pact with the Association of Southeast Asian Nations.

Talks are under way with Canada and Mexico and preparatory talks have been held with Gulf Cooperation Council member states and Australia.

In September South Korea said it had reached agreement with India on a free trade deal, with the two sides expected to sign the agreement shortly.

The US pact awaits ratification by the legislatures of both countries. The incoming Obama administration has suggested it may press for changes because of what it sees as a failure to fully open the South Korean auto market. -- AFP