South Korea and Canada on Tuesday struck a free trade deal after nearly nine years of negotiations, agreeing to phase out tariffs on most imports and exports within 10 years of the deal’s effectuation.

The agreement came after President Park Geun-hye and Canadian Prime Minister Stephen Harper held a summit in Seoul to discuss an array of bilateral and global issues including security and economic cooperation.

“The South Korea-Canada FTA can be called a new rule of bilateral cooperation. We have high expectations for a deepening of economic cooperation with Canada based on the deal,” President Park said during the summit at Cheong Wa Dae.

Park also called on Harper to give Canada’s support for Korea’s participation in the Trans-Pacific Partnership, a mooted U.S.-led deal to create a free trade bloc linking Pacific Rim states.

“After the bilateral FTA, another framework with which we can strengthen bilateral trade and investment is the TPP,” she said. “With the synergistic effect of the FTA and TPP, we can further enhance our access to each other’s markets.”

Last year, Seoul expressed its intention to join the TPP.

Harper, who arrived in Seoul for a two-day visit on Monday, expressed hopes that the FTA would further deepen bilateral economic ties.

“I am accompanied by a very strong delegation of ministers and parliamentarians, along with a strong business delegation … (to) use today’s (FTA) agreement to rapidly develop economic ties between our two countries,” he said.

In their joint statement after the summit, the two leaders hailed the bilateral FTA as the “foundation for a new era of mutually beneficial bilateral relations.”

“We are committed to finalizing the legal review and required domestic procedures expeditiously with the mutual intention that the agreement will enter into force as soon as possible,” the statement said.

“Once implemented, the agreement is expected to bring significant benefits for the Canadian and Korean economies, business communities, including small and medium enterprises and customers.”

The statement also urged Pyongyang to abandon its nuclear weapons and existing nuclear and ballistic missile programs including its uranium enrichment program in a “complete, verifiable and irreversible” manner.

“Further to this, we share the vision of peaceful unification of the Korean Peninsula based on the principles of free democracy and a market economy, which will bring a better future for all Koreans,” it said.

The bilateral FTA covers virtually all sectors of bilateral trade including products, customs, investment, finance, intellectual property, services, labor, the environment and electronic commerce.

After the official signing of the FTA documentation and domestic parliamentary ratification procedures, the deal is expected to take effect sometime next year, Seoul officials presumed.

Among other sectors, Korea’s automotive industry is expected to greatly benefit from the deal, which will effectively remove Canada’s tariffs on Korean cars within two years.

The deal is likely to help Korean cars gain greater price competitiveness in Canada, the country’s fifth-largest automotive market. Last year, exports of Korean cars to Canada were estimated at $2.23 billion, nearly 43 percent of the country’s total exports to Canada.

For Korea’s textile products, Canada agreed to eliminate its tariffs within three years in most cases. The tariffs on Korean refrigerators and washing machines will also be removed in three years and immediately, respectively.

For other major Korean export items such as wireless phones, semiconductors, steel and other petroleum products, Canada already eliminated tariffs under a previous deal.

The deal is expected to have negative ramifications on local beef producers as Korea is to cut its 40 percent tariffs on Canadian beef by 2-3 percent each year and remove them completely 15 years after the implementation of the FTA.

South Korea is the first Asian country to have a bilateral FTA with Canada. Officials said the deal would help substantially increase Korea’s advance into Canada, whose economic ties have been centered on the U.S. and Mexico through the North American Free Trade Agreement.

Trade volume between the two countries reached $9.9 billion last year, compared with $10 billion in 2012, $11.5 billion in 2011 and $8.4 billion in 2010. Canada is Korea’s 23rd-largest export market and 25th largest-import market.

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