Stockholm  - The European Union aims to sign a free trade agreement with South Korea before the end of the year, Swedish Prime Minister Fredrik Reinfeldt said Monday after talks with South Korean President Lee Myung-bak.

The 27-nation bloc last week had "a breakthrough" in talks with South Korea on such a free trade agreement, the Swedish premier said.

Sweden is spearheading the talks after taking over the rotating presidency of the EU.

Speaking at a joint news conference after their talks, the two leaders underlined the need to support free trade and tackle protectionism.

"It is very critical for us to work toward reviving the global economy so that we can come out of this crisis. And one way to do that is to revive global trade," Lee said, noting that global trade had shrunk 10 per cent.

Reinfeldt said there were "worrying signs" of calls for more protectionism globally but welcomed progress last week on the the talks between South Korea and the EU.

"We had a breakthrough in negotiations at the end of last week but that also means that when you finalize these kind of agreements with the European Union, we need also to finalize it with our different member countries," Reinfeldt said.

Reinfeldt, quizzed about possible sticking points on the deal, said no details had been discussed in his meeting with Lee. T

Possible hurdles include rules-of-origin including stipulating how much of a finished product has to be manufactured in South Korea, and duty drawbacks. The latter are taxes paid on imported parts used to manufacture final products.

"The finalization of the agreement in itself will now follow during the Swedish presidency, and then these kind of specifics will also be sorted out and discussed at length," Reinfeldt said.

Swedish Trade Minister Ewa Bjorling later told reporters that other EU member states, including some that had expressed doubts, were to study the details in the compromise agreed last week.

Lee and Reinfeldt also discussed other issues including relations with North Korea and its controversial nuclear programme, climate change.(dpa)