"An agreement is possible," Guttenberg said at an event in Riyadh, adding both sides needed to shift some ground and that cultural differences should be taken into account.
One of the main points of contention in the negotiations is a European demand for any deal to link human rights to trade.
Saudi Finance Minister Ibrahim al-Assaf signaled he was interested in solving the disagreements but said the EU should soften its stance and show the Gulf region more respect.
"The EU sees the Gulf states only as a market," he said, adding they should take a broader view of the region.
Both ministers said they were interested in boosting their economic and political ties. Guttenberg said he hoped German firms could participate in some of Saudi's big projects.
The kingdom plans to invest $400 billion in the next four years to modernize its infrastructure. (Reuters)
