SEOUL - THE European Union and South Korea on Monday started a new round of free trade talks but shelved the most contentious issues until a new government takes office in Seoul.

'Today's meeting covered customs, services and other non-critical issues,' a South Korean trade official said on condition of anonymity.

At this week's round, the sixth since talks started in May last year, South Korea will also seek a breakthrough in country-of-origin rules, he said.

It has urged the EU to ease rules under which a product will only be considered as coming from a trading partner if at least 60 per cent of the finished item is made in that country.

South Korean manufacturers are trying to outsource more components from neighbouring countries like China to cut costs.

Seoul officials have said negotiations on the car trade and other critical issues will be discussed after president-elect Lee Myung Bak takes office on Feb 25.

The EU has offered to eliminate or phase out all import tariffs on South Korean goods within seven years, and to remove tariffs on 80 per cent of them within three years.

Seoul has offered to remove tariffs on 68 per cent of EU goods within three years, demanding some exceptions since imports of pork and dairy goods still remain sensitive issues domestically.

On cars, the EU has offered to eliminate its 10 per cent tariff within seven years. In return it wants South Korea to ease regulations on European cars by applying less restrictive international technical standards.

The EU is South Korea's second-largest trading partner after China, with nearly US$80 billion (S$114.6 billion) in two-way commerce last year.

A free trade deal with the EU would be the biggest-ever for South Korea, surpassing the agreement signed last June with the US which awaits ratification by legislatures in both countries. -- AFP