South Korea and the United States, kicked off a second round of talks on a free trade pact on Monday with differences on contentious issues such as agriculture that have sparked mass protests in Seoul.
After a weekend of protests, thousands of demonstrators, shouting "down with the FTA", gathered in the rain again and scuffled with riot police outside the venue in the South Korean capital, where teams of negotiators from the two sides were holding talks.
The round is due to continue until Friday.
Protesters say they will try to get 100,000 demonstrators on to the capital's streets on Wednesday.
About 270 South Korean and 80 U.S. officials will focus on areas including textiles, agriculture and automobiles, officials said.
Dubbed KORUS, the pact would be the biggest U.S. free-trade deal since NAFTA, the North American Free Trade Agreement, which took effect in 1994.
South Korea was the world's 11th-largest economy in 2005, according to the World Bank, and seventh-largest U.S. trading partner. Two-way trade in goods last year totalled about $72 billion.
Both sides said they had made good progress in their first round of talks last month in Washington.
But chief U.S. negotiator Wendy Cutler said the two countries still had difficult issues to resolve, including trade restrictions in politically sensitive sectors such as rice for South Korea and automobiles for the United States.
"But I do not envision any deal breakers," Cutler said at a briefing with reporters.
"I remain optimistic about our prospects for success for the KORUS FTA," she said.
Another area of contention is the status of goods produced by South Korean firms at an industrial park in the North Korean border city of Kaesong.
Seoul, which sees the park as a model of economic integration between the two Koreas, wants goods from the park to be included in the deal while U.S. negotiators say they see the goods as originating in North Korea and thus not subject to the bilateral trade pact.
South Korean farm and labour activists are protesting over the deal, saying opening of the market to more goods and services by tearing down high tariffs and other barriers would endanger the livelihood of millions of South Korean workers and farmers.
"We shouldn't let these concerns and anxieties expressed by certain groups deter our work or derail our efforts," Cutler said.
Negotiators are pushing for a deal by January so the U.S. Congress can vote on it before the expiry of White House authority to negotiate trade agreements that cannot be amended. That authority runs out in mid-2007. (With additional reporting by Doug Palmer in Washington and Jack Kim in Seoul.)
