EU not ready to sign South Korea free trade pact

The European Union is not yet ready to sign a free-trade agreement with South Korea because there could still be "outstanding questions" from some EU members, Sweden's prime minister said Monday.

South Korea's President Lee Myung-bak had hoped to announce the conclusion of the free-trade talks during a visit to Sweden, which currently holds the rotating six-month EU presidency.

But Swedish Prime Minister Fredrik Reinfeldt suggested some EU capitals were not prepared to OK the agreement, despite a "breakthrough" in talks on Friday.

"When you finalize this kind of agreement with the European Union, we need to also finalize it with our different member countries," Reinfeldt said. "There might still be some outstanding questions, and we need to follow up on them before we could say that it's absolutely all clear and all ready to sign."

Reinfeldt said he had "good hope" to complete the agreement during Sweden's EU presidency.

South Korea and the EU began negotiating the accord to slash tariffs and other barriers to trade in May 2007.

Bilateral trade reached $98.4 billion in 2008. The EU is South Korea's second-largest trading partner after China and its largest foreign investor.

Lee said he was "happy with the results" of his visit to Europe but stopped short of declaring that talks on a free trade deal had been completed.

"I am very much aware that the European Union is composed of 27 individual countries. Dialogue, cooperation and also trying to convince and encourage those members with different views is very important," he said through a translator.

Earlier Monday, Lee had told South Koreans in a nationwide radio broadcast that he expected to "declare the conclusion of negotiations."

The talks have dragged out longer than both sides had hoped, however, amid difficulty bridging differences over refunds South Korea pays to local companies for tariffs incurred on imported parts used in exported goods.

Opposition by EU automakers to the deal has also been a sticking point. South Korea enjoys a big surplus in vehicle trade.

South Korea is aggressively pursuing free trade agreements. It reached one with the United States in April 2007, but the deal has since languished in political limbo in both countries and remains unratified.