South Korea and Colombia on Monday concluded a bilateral free trade agreement, which calls for elimination of tariffs on major trading goods within 10 years.

The trade ministers of the two countries signed the deal in Bogota on the sidelines of the discussions between President Lee Myung-bak and his Colombian counterpart Juan Manuel Santos.

If the agreement is ratified, Colombia would become the third free trade partner in Latin America. Korea’s FTAs with Chile and Peru took effect in 2004 and 2011, respectively.

“We announced the official conclusion of the Korea-Colombia FTA negotiations, recognizing that all the remaining issues of the negotiations have been successfully resolved between the negotiating teams of the two countries,” Korean Trade Minister Bark Tae-ho and his Colombian counterpart Sergio Diaz-Granados said in a joint statement, wrapping up about 30 months of negotiations.

They said the “comprehensive and high-quality” agreement consists of 22 chapters on trade in goods, services, customs procedures and trade facilitation and technical barriers to trade, trade remedies and intellectual properties, along with other matters.

Once the pact takes effect, tariffs on virtually all items traded between the two countries will be torn down over the next decade.

The agreement calls on Colombia to scrap the current 35-percent tariffs on passenger cars with 1,500-2,500 cc engines within 10 years and duties on diesel cars within nine years, the Trade Ministry said.

“The South Korea-Colombia FTA will contribute to further cementing the ‘strategic cooperative partnership’ the two countries established last year, expanding our firms’ exports and investment, secure a bridgehead for them to advance into the Latin American market and deepen resource cooperation,” Seoul’s Ministry of Foreign Affairs and Trade said in a press release.

Both sides will be examining the final text in the “legal scrubbing” process which officials say means editing grammatical errors and typos, and cleaning up the language before translating it into the countries’ languages.

After this and other necessary procedures including the domestic parliamentary ratification process, the FTA is expected to take effect early next year at the earliest, officials said.

The conclusion of the negotiations came after the leaders of the two countries held summit talks to discuss ways to deepen bilateral cooperation in a variety of areas including economy, and bilateral and broader issues.

The two countries launched official negotiations on the FTA in December 2009 after conducting civilian-led joint research on its feasibility between March and September in the same year.

After the bilateral FTA talks began, trade volume between the two countries increased to some $1.82 billion in 2010 from $922 million recorded the previous year, according to data from the Korea International Trade Association. The volume was tallied at $1.99 billion last year.

Lee said that the FTA would increase the two countries’ bilateral trade volume fivefold over the next five years.

“Should the South Korea-Colombia FTA be struck, it will be a win-win opportunity for both countries,” Lee said in an interview with Colombia’s major El Tiempo newspaper published Sunday.

“I expect trade volume between the two to expand more than fivefold and mutual investment in each other to greatly increase.”

With their ties forged during the 1950-53 Korean War, deepened economic ties between the countries will further enhance their relationship, observers said. Korea and Colombia mark the 50th anniversary of their diplomatic ties this year.

The FTA with South Korea will help Colombia establish a foothold to advance into the Korean market, which will also help its economy grow at a faster pace, Lee said in the interview.

“With the FTA going into effect, South Korean firms’ investment into Colombia will increase. This investment, in turn, is expected to make it possible (for the firms) to transfer technology to Colombia,” Lee said.

“Korea can regard Colombia as a bridgehead to advance into Latin America while Colombia could use Korea as a point to move into the Asian market.”

Colombia is the fourth largest economy in Latin America after Brazil, Mexico and Argentina. As of 2010, its gross domestic product was recorded at $272.6 billion. The country has a population of 48 million.

Colombia is rich in natural resources including oil, natural gas, coal and nickel. Its daily crude oil output is around 680,000 barrels, putting it in fourth place among Latin American oil producers.

Colombia is the only Latin American country among the 16 states that sent combat troops to fight in support of South Korea during the first major armed conflict of the Cold War era.

It dispatched some 5,100 troops and a frigate-level warship. Of them, 163 were killed in action while 448 were wounded with 28 listed as prisoners of war, according to government data.

After touching down in Bogota, Lee met with Colombian war veterans and expressed gratitude for their sacrifice to help defend South Korea during the war that broke out after the North invaded the South across the 38th Parallel, a line drawn by the two major Cold War foes in 1945.

Lee also visited a Korean War memorial to pay respect to the fallen soldiers.

As of June, South Korea has in place free trade pacts with 45 countries including the U.S., Chile, Singapore, Peru and India.

Seoul is in FTA negotiations with 10 countries including Colombia, New Zealand, Australia, Canada and Mexico.

Lee is on a tour of four Latin American nations including Mexico for the Group of 20 summit and Brazil for the U.N. Conference on Sustainable Development. He also visited Chile before arriving in Colombia. He is to return to Seoul on Wednesday.

By Song Sang-ho (sshluck@heraldcorp.com)