South Korea and the European Union (EU) have made "significant" progress in their two-day negotiations for a free trade, Korea Times reported on Tuesday.

"We confirmed that we have made significant progress during this week's talks," South Korean Trade Minister Kim Jong-hoon was quoted as saying in a conference after ending two days of negotiation in Seoul.

Though he declined to comment on which issues remain unresolved, Kim said both sides did make significant advancement in such areas as auto trade and rules of origin. "But further talks are needed to finalize the deal," he said.

According to Kim, the eighth round of negotiations will be held in Seoul in the first week of March.

Previously, negotiations had been making slow progress as two sides remained reluctant to accept the other's demands on tariff reductions, rules of origin, auto trade and auto-related technical standards.

EU is South Korea's second largest trading partner after China and bilateral trade between the two sides reached US$93.07 billion in 2007.

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

(Xinhua News Agency January 20, 2009)