SEOUL, March 24 (Reuters) - South Korea and the European Union reached a provisional agreement to eliminate tariffs and open their markets to boost their $100 million annual trade but fell short of a final deal, negotiators said on Tuesday.
Trade ministers from the two sides will try to resolve remaining differences and attempt to close the deal when they meet in London next week, South Korean chief negotiator Lee Hye-min told a news conference at the end of the eighth round of talks.
The negotiations began in 2007 shortly after South Korea struck a free trade deal with the United States that has yet to be ratified by either country's legislature.
"I am convinced that this is an agreement that not only will bring tangible economic benefits for all sectors of our economies, but also it will be a very timely signal of our commitment to open markets in a very difficult economic situation," chief European negotiator Ignacio Garcia Bercero said.
But he added: "Nothing is agreed until everything is agreed."
The two sides left for further discussions lingering differences on politically sensitive issues such as place of origin rules and customs drawback, which act in a way similar to export subsidies.
The tentative agreement calls for the removal of tariffs on nearly all industrial products within five years, Lee said.
He said the European Union will remove tariffs on all South Korean cars within five years, beginning with those on mid- and full-size sedans within three years.
The European Union is South Korea's second largest export market after China, and South Korea is the EU's fourth largest non-European trade partner.
For the European Union, the deal with South Korea would be its first such pact with an Asian economy.
The agreement, if reached, would need the approval of the South Korean assembly and the European Parliament but not of the EU's 27 individual member states. (Reporting by Jack Kim; Editing by Jonathan Hopfner)