South Korea and the European Union (EU) have failed to finalize their free trade deal.
South Korean Trade Minister Kim Jong-hoon and his EU counterpart Catherine Ashton met in London Thursday to narrow differences on some remaining sticky issues, including a so-called duty drawback scheme and rules of origin, but failed to wrap up the agreement, according to Yonhap News Agency.
Both sides announced late last month that they had reached a tentative free trade accord and had said they would seek to finalize the deal at today's meeting.
"Ministers focused their discussions on the remaining issues and made further progress," both sides said in a joint statement. "Ministers also had substantive discussions to evaluate all possible options for a compromise on the issue of duty drawback. Despite these efforts, the gaps on this issue could not be narrowed."
The two sides said they would seek clearance to finalize the negotiations in the near future.
Seoul is seeking a provision in the agreement that would allow import tariffs to be returned to companies that use imported materials to make products for exports. But Brussels opposes the provision, saying it would favor South Korean exporters.
The EU does not allow duty drawbacks under its existing free trade accords with Mexico and Chile.
"Except the duty drawback issue, both sides virtually reached agreement on other remaining issues," Kim told reporters after the four-hour meeting with Ashton. "On the matter of the duty drawback, it's kind of a conflict of principle that both sides cling to, rather than a matter of compromise."