BRUSSELS (AP) -- The European Union agreed Thursday to a free trade pact with South Korea that will slash billions of dollars in industrial and agricultural duties, despite some countries' worries that the auto industry could be hurt by a flood of cheaper cars.
The deal -- the first such pact between the EU and an Asian trading partner -- will be signed at an EU-South Korea summit on Oct. 6 and come into force on July 1, 2011, said Belgian Foreign Minister Steven van Ackere, whose country holds the union's rotating presidency.
The EU is South Korea's second-largest export destination, and South Korea is the bloc's eighth largest trade partner, according to figures from the European Commission. EU trade with South Korea exceeded €65 billion ($84 billion) in 2008.
Van Ackere called the deal "a very big step in opening markets in Asia" to European businesses. "This will create prosperity and jobs across in Korea but also in Europe."
The deal was initialed last year, but fears that it could hurt Europe's auto industry by opening the door to more and cheaper South Korean cars delayed the signing. Italy, home to automaker Fiat, long opposed the deal.
South Korea exported 303,205 vehicles to the EU in 2009, according to the Korea Automobile Manufacturers Association. EU automakers, meanwhile, exported 40,097 vehicles to South Korea.
The European Commission estimates the deal will see the elimination of €1.6 billion ($2.1 billion) worth of industrial and agricultural duties for European exporters to South Korea. The EU will cut some €1.1 billion of duties for Korean importers.
The two sides took a little over two years to strike the deal amid strong opposition from Europe's automakers angry over the continent's huge deficit in vehicle trade with South Korea, home to Hyundai Motor and Kia Motors.
In a statement, the EU called the agreement its "most ambitious trade agreement ever" that will likely lead to a doubling of trade with South Korea.
"The FTA is our first deal with an Asian partner," the statement said. "It is a signal that the EU is open for business."