SEOUL, Oct 20: South Korea's finance minister called on Friday for an early free trade agreement with the United States to lessen the economic impact of North Korea's nuclear test, as negotiators prepared for another round of talks.

"A free trade agreement can lead to improvements in production, but it has taken on more importance because it could act as an effective counterbalance to uncertainties deriving from the North Korean nuclear issue," said Kwon O-Kyu.

The govt is closely monitoring downside risks to the economy following the Oct 9 test, he said.

The fourth round of five-day talks starts on Monday on the southern holiday island of Jeju, after relatively little progress in the first three sessions.

The South's desire to protect its farmers from cheap imports is one of the main obstacles to reaching a deal before President George W. Bush's Trade Promotion Authority -- allowing him to fast-track accords through Congress -- expires next June.

Kwon has warned that the government may have to cut its growth target for next year, partly due to the test which sparked worldwide shock.

Meeting local business people Friday, the finance minister said the government may need to front-load its budget spending next year since economic conditions are likely to worsen.

He said the economy probably grew 4.6 per cent in the third quarter, and the growth rate is expected to slow to four per cent in October-December.

"It will likely be necessary to advance budget spending next year since the South Korean economy is likely to face a more difficult situation early next year," Yonhap news agency quoted him as saying.—AFP