South Korea and the European Union are in the final stage of concluding negotiations on a free-trade agreement (FTA), a presidential official said yesterday.

The EU executive body is now trying to win approval from all its member countries before South Korean President Lee Myung-Bak's trip to Sweden, his spokeswoman Kim Eun-Hye told reporters during Lee's trip to Poland.

Lee will arrive in Stockholm on Saturday for talks with Swedish Prime Minister Fredrik Reinfeldt.

"We are in final consultations with the EU for the conclusion of negotiations" on the FTA, Kim was quoted as saying by Yonhap news agency.

"The European Commission, the executive body of the EU, is in contact with member nations to tap their final stance on the FTA," she added.

In an interview with the European television network EuroNews on Tuesday, Lee said he hoped the FTA would be signed before the end of next month.

South Korea and the EU began negotiations on an FTA 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 for manufacturers who use imported materials to make products for export. 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 last year, after China, with two-way trade worth more than $90 billion.

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

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