South Korea said its free trade agreement with the EU would swell commerce by billions of dollars, cut living costs and make the nation's industry more competitive.
The deal signed on Oct. 15 in Brussels is the first between the world's largest single trading bloc and an Asian nation. Seoul officials hope it will spur the U.S. Congress to ratify a similar agreement.
The EU is South Korea's second largest trading partner after China. The bloc's exports to the country, Asia's fourth largest economy, were worth $40 billion last year while imports reached $58.4 billion.
According to Seoul, the two sides will phase out tariffs on 96% of EU goods and 99% of South Korean exports within three years.
The Ministry of Knowledge Economy said exports of Korean cars, ships and home appliances would get a boost although agriculture would suffer. "The EU is the most attractive market for us, which brings us the largest trade surplus," the ministry said.
When the pact takes effect bilateral trade is expected to increase by $4.7 billion every year, it said.
The ministry in an earlier statement said the deal will become "the driving force to enhance the competitiveness of our industry" and bolster the country's international credibility.
The finance ministry has said the FTA will cut living costs, widen choice for Korean consumers and raise living standards.
The European carmakers' trade association, ACEA, has slammed the deal for allegedly allowing unfair competition, and says it will only add to Europe's trade deficit with South Korea.
The pact must be ratified by South Korean legislators and all 27 EU member nations plus the European Parliament. The knowledge economy ministry said it hopes the deal can go into force next July.
The Korea Institute for International Economic Policy has estimated it will eventually increase trade by up to 20%.
Copyright Agence France-Presse, 2009