UPDATE 1-EU, South Korea aiming for trade deal this year

(adds details from news conferences)

By William Schomberg

BRUSSELS, May 15 (Reuters) - The European Union and South Korea will speed up their free trade negotiations in the hope of striking a deal this year, negotiators said on Thursday, but the two sides were far apart on the core issue of cars.

Brussels and Seoul, hoping to boost their $100 billion trade flows, launched the negotiations a year ago, shortly after the United States clinched a free trade deal with South Korea.

For the EU, an agreement to lower barriers to trade and investment with South Korea would be its first such pact in Asia and a boost for EU Trade Commissioner Peter Mandelson as he tries to hammer out deals before his term ends next year.

"Both sides are convinced that on the basis of the progress made during this round that it is feasible and desirable to conclude the EU-Korea FTA negotiations during the course of 2008," EU lead negotiator Ignacio Garcia Bercero said.

"Both sides agree to accelerate the process so as to reach agreement as early as possible," he said at the end of a four-day negotiating session, the seventh since the talks began.

EU officials have previously shied away from talking about possible end-dates for the talks. But Garcia Bercero stressed Brussels would not dilute its demands just to get a deal done before the Commission's term ends in 2009.

His Korean counterpart said there was a risk of failure despite progress in several areas.

LAND OR CRASH?

"We have identified the landing zones. Whether to land or crash is a different matter but we will try to do it within this year," Hye-Min Lee told a news conference.

The next negotiating round will only be scheduled when both sides feel it could yield a final agreement, officials said.

On automotives, "the gap in the respective positions remains. However both sides recognise the need to come to a common understanding", the EU said in a statement.

European carmakers worry that Brussels might cut its import tariffs on South Korean cars without Seoul agreeing in return to clear the array of local standards that they say effectively sideline them from the market.

Lee said South Korea was holding out against the EU's demands on automobile standards because it wanted the bloc to move more quickly on eliminating its car import tariffs, something Brussels has said it can do only over seven years.