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Last Updated: Monday, 7 May 2007, 07:50 GMT 08:50 UK
S Korea and EU begin trade talks
Kim Hyun-Chong and Peter Mandelson
An EU free trade agreement could be South Korea's biggest deal
South Korea and the European Union have begun a series of free trade talks that could expand their $80bn trade.

EU Trade Commissioner Peter Mandelson and South Korean trade minister Kim Hyun-Chong both called for rapid progress in free trade negotiations.

Kim Hyun-Chong said it was a chance to become East Asia's free trade hub linking Europe, Asia and the US.

The first talks, from 7 to 11 May, are taking place in Seoul. Officials hope to conclude negotiations within a year.

In a joint statement the two ministers said a free trade agreement (FTA) would "open new markets and expand opportunities for Korean and EU businesses while giving valuable momentum to liberalisation of global trade".

'Matter of survival'

The European Union is South Korea's biggest investor, injecting nearly $5bn into the country last year, Seoul's foreign ministry said.

It is also the country's second largest trading partner after China.

South Korea is hoping to boost its exports of cars, electronic goods and textiles to the EU.

Mr Kim said a trade deal would "expand opportunities for both sides while giving valuable momentum to liberalisation of global trade".

"As such, opening our market is not a matter of choice but a matter of survival," he added.

Mr Mandelson said the EU would focus on car exports and improving access to South Korea's service sector.

"I take pride in every European car which I see on the streets of Seoul but I would like to see a great many more," Mr Mandelson said.

He also said that the talks represent "a turning towards a stronger focus on Asia".

Last month, South Korea concluded a free trade agreement with the United States.

It has also signed FTAs with Chile and Singapore, while another with the Association of Southeast Asian Nations, excluding Thailand, will be implemented on 1 June.

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