Beijing: South Korea says it has agreed to sign a free trade deal with China that will remove tariffs on more than 90 per cent of goods over two decades.
The announcement from South Korea's presidential office today came after South Korean President ParSk Geun-hye met with Chinese President Xi Jinping at the Asia Pacific Economic Cooperation (APEC) summit being held in Beijing.
Negotiators held a 14th round of trade talks before Xi and Park met but failed to resolved outstanding issues.
A statement from South Korea's presidential office said Xi and Park declared that the agreement was now "virtually" reached. Xi said negotiations had made "significant progress."
The trade deal is expected to give South Korean automakers broader access to consumers in the world's most populous country than their Japanese rivals.
China will likely boost its exports of agricultural products to South Korea. Two-way trade between China and South Korea was USD 229 billion in 2013.
The deal covers 22 areas including finance and online commerce. South Korea said it was the first time for China to include finance, telecommunications and e-commerce industries in a free trade deal.
South Korea's rice industry will not be included in the trade deal but trade in 70 percent of agricultural goods will be liberalized.
Ahn Jong-beom, Park's top economic adviser, told reporters that the two parties have no outstanding "sensitive issues" and will finalize the agreement's wording.
The China-South Korea trade deal will be formally signed early next year. South Korea's government will seek parliamentary approval in the following months.
China and South Korea began the trade negotiations in May 2012.
Jee Mansoo, an economist at the Korea Institute of Finance, said the impact of the trade pact is unclear because the economic situation has changed since negotiations began.
Some South Korea industries that were expected to benefit from increased exports to China, such as steelmaking, are no longer likely to benefit because China has made strides in improving its domestic industries, he said.