The fourth round of five-day talks gets under way Monday on the southern holiday island of Jeju amid tight security and in the shadow of North Korea's first nuclear test.
Officials say a free trade agreement (FTA) will help Asia's fourth largest economy boost exports and upgrade its industrial structure.
But defiant farmers, unions and activists have vowed to stage daily protests against any market-opening measures that could endanger Korean jobs.
Finance Minister Kwon O-Kyu called on Friday for an early agreement to lessen the economic impact of the nuclear test.
"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," he said.
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.
The US side echoed Kwon.
"Recent events have demonstrated how important it is that the US-South Korea partnership remain strong," said Deputy US Trade Representative Karan Bhatia in Washington, before a visit to Seoul and Beijing.
But Kim Jin-Il, spokesman for a coalition of South Korean civic groups, sees no benefit from a deal.
Any pact opening up agriculture would force half of the nation's 3.5 million farmers to leave the land, he said.
"The deal will ruin our agricultural sector and threaten our food security. The United States may also try to change our tax and legal systems related to imports," Kim told AFP.
More than 10,000 protestors will demonstrate near the talks venue, he said. Police have deployed about 10,000 officers plus helicopters on the island.
The two sides began negotiating in June on what would be the largest such accord for the United States since the North American Free Trade Agreement.
But the South's desire to protect its farmers from cheap imports has been one of the main obstacles to reaching a deal before President George W. Bush's Trade Promotion Authority (TPA) -- allowing him to fast-track accords through Congress -- expires next June.
US chief negotiator and Assistant US Trade Representative, Wendy Cutler, said after the last round in Seattle that the fourth round would have to show more progress for any pact to be reached this year.
"There's not going to be any shortage of effort expended on our side to try and get this done in time to get it passed next year under TPA," said Bhatia.
South Korean officials concede the deadline may be missed.
"Prospects for the early settlement of contentious issues are not bright," delegation spokesman Han Dong-Man told AFP.
South Korea will not ease its stance on agriculture, automobiles, pharmaceuticals and other sensitive sectors, he said.
The United States wants South Korea to revise its new policy on drug-pricing which reimburses patients when they buy medicines on a government list. US officials believe it will discriminate against foreign products.
They also differ on Seoul's desire for Washington to treat goods produced in Kaesong, a South Korean-built industrial estate in North Korea, as South Korean-made.
Experts quoted by Yonhap news agency Sunday said this issue is almost dead after the nuclear test.
"It will be very difficult for South Korea to defend its previous position to include goods produced in Kaesong in the FTA," said Lee Sook-jong, of Sungkyunkwan University in Seoul.
South Korea is the seventh-largest trading partner and seventh-largest export market for the United States. Two-way trade was valued at 72 billion dollars in 2005, according to US figures.

Copyright AFP (Agence France-Presse), 2006