South Korea and the Association of Southeast Asian Nations (ASEAN) settled an agreement on investment, a thorny issue that hampered their free trade talks, South Korean officials said on Thursday.

South Korea and ASEAN have had free trade talks on four areas, namely merchandise, services, investment and dispute settlement, in order to settle a free trade pact.

An agreement on merchandise took effect last year, and the deal on services will be enforced from May.

ASEAN is South Korea's fifth-largest trading partner, with bilateral trade reaching US$53.5 billion in 2005.

South Korea currently has free trade agreements with Chile, Singapore, and the European Free Trade Association and is pushing for a parliamentary ratification of a free trade deal with the United States.

The country earlier in April failed to finalize the free trade talks it had with the European Union.

(Xinhua News Agency April 9, 2009)