REUTERS - The European Union agreed on Thursday to sign a free-trade pact with South Korea and grant Pakistan trade concessions after floods, but a row over France's deportation of Roma migrants marred a one-day summit.
The agreement on trade issues was a boost for the EU at a meeting where leaders discussed ways to enhance the bloc's role in global affairs and in particular its relations with emerging powers such as Brazil, Russia, India and China.
But French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso clashed over the Roma migrants before the EU leaders eventually agreed on a statement that appeared intended to draw a line under the row.
Planned talks on reforms of EU budget rules were pushed into the background, EU diplomats said.
"The debate about sanctions for not respecting the Stability and Growth Pact (setting budget rules) has been slightly overshadowed by the issue of the Romas and a strong exchange that Sarkozy) and Barroso have had," said one envoy.
"Sarkozy made a strong point defending France's position. Jose Manuel Barroso stood up and said he was not happy with the current situation in France. Sarkozy replied in a sharp manner".
A row has been simmering this week over France's deportation of about 8,0000 Roma migrants to Romania and Bulgaria in a crackdown on crime.
The executive Commission has accused France of breaking EU law and threatened legal action. French leaders were angered by a statement by EU Justice Commissioner Viviane Reding, who urged France not to return Europe to the climate of World War Two.
It was not immediately clear what the leaders' statement on the Roma would say.
Any lingering tension between France, one of the biggest and most important EU member states, and the Commission could sour the atmosphere at talks on other issues and hinder efforts to reach other agreements.
The EU leaders had been expected to discuss a report by EU President Herman Van Rompuy on progress towards agreement on budget rule reform but the diplomats said little attention was paid to the issue.
Agreement on trade issues
In an early success at the meeting, member states secured Italy's backing for the free-trade pact with South Korea, reaching a compromise to delay by six months the introduction of an agreement that Rome fears could hurt its car industry.
"This is the first generation of bilateral trade agreements which will bind Europe and Asia together in an ever-closer economic bond. This is a very big step in opening markets in Asia for our companies," said Belgian Foreign Minister Steven Vanackere, whose country holds the EU presidency for six months.
The deal is due to be signed at an EU-South Korea summit in Brussels on Oct. 6 and will come into force from July 1, 2011.
EU officials say the agreement will create about 19 billion euros ($24.64 bln) of new exports for EU producers. Combined EU-South Korea trade in goods was worth about 53 billion euros in 2009, according to EU figures.
The 27 member states also agreed to grant trade concessions to Pakistan to help it overcome the impact of flooding and maintain political stability, diplomats said.
They said Pakistan would receive an immediate reduction in duties on certain imports to the EU and the European Commission would work with the World Trade Organisation to finalise how it would be implemented and ensure trade rules were not violated.
The EU agreed in May on a 1 trillion dollar rescue mechanism for indebted countries and the European Commission unveiled new moves this week to improve financial regulation.
EU finance ministers have agreed to submit budget plans for early review by the Commission and other EU governments but pressure is growing for more emphasis on controlling debt levels, particularly among the 16 countries that use the euro.