Brussels, 09/03/2009 (Agence Europe) - Meeting in the 133 Committee on Friday 6 March, the trade experts of the Member States failed to reach a consensus needed to give the green light to the conclusion of a bilateral free-trade agreement with South Korea, negotiations for which were launched in May 2007. After a trip to Berlin at the end of February to try to win over a German government with major misgivings, due to concerns for its automotive industry, Catherine Ashton went before the representatives of the Member States to agree on a compromise between the Twenty-Seven before an eighth- and probably final- table round between the negotiators of the Commission and of the South Korean government in Seoul on 23 and 24 March. "Discussions were positive and nobody said that they did not want the agreement. But nothing has been concluded and differences of opinion remain", a source close to the dossier told Reuters on Friday, going on to add: "after today's meeting, we know what must be done and I believe that we will be able to close many of the chapters on 23 March". The Member States remain divided into defenders of their own national automotive industry, for example Germany, Spain and Italy, and France to an extent, but also Hungary, which produces car parts; with the sector in full crisis, these countries are reluctant to phase out duty on imports of South Korean cars with little in return; and the pro-free trade countries, led by United Kingdom and Sweden, which have offensive interests in services and plead for a swift conclusion of the agreement. "The automotive sector continues to be the stumbling block and at least eight or nine countries, including Germany, France, Spain and Italy, are opposed to an agreement as it stands. They want the Commission to come back with a better offer [from South Korea: Ed] after 23 March", said a diplomatic source. The Trade Commissioner did not therefore manage to appease concerns expressed by these countries concerning the automotive industry, which employs 2.3 million people directly in Europe and 10 million indirectly. Although Ms Ashton stressed the progress made in terms of access to the South Korean market, with a major concession from Seoul over the automotive standards chapter, and said that there was flexibility regarding an extension of the transition period, the question of the duty drawback remains the largest obstacle to an agreement on the rules of origin chapter. This duty reimbursement allows South Korean car builders to import cheap components from China and to be reimbursed for import duty paid on these parts if they are used in the composition of vehicles destined for the Community market. Seoul is not prepared to give up this system. "When it comes down to it, the duty drawback will be the largest point of political disagreement to overcome. The ministers will have to decide whether this principle is worth sabotaging the whole agreement", said a source close to the Commission. (E.H./trans.fl)