The United States and South Korea on Saturday signed a free trade agreement, the biggest such U.S. deal since the North America Free Trade Agreement 15 years ago.
Under the agreement, tariffs on nearly 95 percent of trade in consumer and industrial products between the United States and South Korea, its seventh-largest trading partner, will be phased out within three years.
Meanwhile, almost two-thirds of U.S. farm exports will be immediately duty-free when the agreement is implemented, said U.S. Commerce Secretary Carlos Gutierrez said in a statement.
The deal also expends business opportunities for U.S. service providers in sectors ranging from banking to telecommunications to express delivery.
"This is the most commercially significant trade agreement for the United States in nearly 15 years and is another step toward fulfilling President Bush's trade agenda to promote U.S. exports, promote economic growth and raise living standards," Gutierrez said.
The two-way trade between the United States and South Korea topped 75 billion dollars in 2006, according to the Commerce Department.
The agreement, which was inked by U.S. Trade Representative Susan Schwab and her South Korean counterpart Kim Hyun-chong, came hours before U.S. President George W. Bush's trade promotion authority (TPA) expires at midnight Saturday.
The deal could face strong opposition in the Democratic-controlled U.S. Congress, according to analysts.
Democrats complain that the agreement opens the U.S. market to more South Korean cars while failing to tear down non-tariff trade barriers that they blame for a huge imbalance in automotive trade between the two countries, news reports said.
TPA, known as "fast-track" authority, allows the administration to negotiate free trade agreements which only can be approved or rejected by Congress, but not amended. The legislation expires on June 30 after five years in force.
On Friday, Schwab, Gutierrez and other senior officials from the Bush administration urged Congress to renew TPA so the country can negotiate more trade deals with the rest of the world.
House of Representatives Speaker Nancy Pelosi and other leading Democrats, however, said that "our legislative priorities do not include the renewal of fast-track authority."