|The revised deal will give US automakers greater access to the South Korean market [AFP]
South Korea and the United States have resolved the differences which stalled a free trade agreement between the two nations for three years.
The two allies signed the deal - which they said would bosts US exports to South Korea by $11bn and create 70,000 US jobs - on June 30, 2007, but ratification had been delayed due to sticking points over the US auto industry and the opening of the South Korean beef market.
But trade negotiators for Seoul and Washington reported back to their respective presidents after four days of talks in the US capital that the final hurdles had been cleared.
"This agreement is meaningful in that it reflects both countries' interests in a balanced way and lays the foundation for a reciprocal win-win," Lee Myung-bak, the south Korean president, said in a statement on Saturday.
"It will also be an opportunity for the South Korea-USA alliance to make a leap by one notch. Our economy will face an opportunity to make a jump again in terms of quality."
Lee urged the South Korean parliament and the US Congress to approve the deal as soon as possible.
The agreement lifts tariffs on 95 per cent of goods between the countries within five years, in what would be the largest US trade pact since the North American Free Trade Agreement with Canada and Mexico in 1994.
The deal was completed after Seoul said it would allow the US to move more slowly on lifting the 2.5 per cent tariff on imported South Korean vehicles.
Barack Obama, the US president, said US car and lorry manufacturers would gain more access to the Korean market "and a level playing field to take advantage of that access" now the trade pact had been finalised.
"We are strengthening our ability to create and defend manufacturing jobs in the United States, increasing exports of agricultural products for American farmers and ranchers and opening Korea's services market to American companies," he said.
The revisions also allow 25,000 cars per US automaker to qualify for entry into the South Korean market, about four times more than under the deal struck in 2007, based on US safety standards rather than more stringent Korean standards.
Alan Mulally, the chief executive of Ford Motor which had led opposition to the deal, hailed the Obama team's "tireless efforts" efforts
He said the new version of the pact offered "greater confidence that we will be able to better serve our Korean customers".
For its part, South Korea is no longer required to eliminate immediately its eight percent tariff on US auto imports, but will reduce it to four percent for four years before removing it. It will, however, still immediately eliminate a 10 per cent tariff on US lorries.
Obama faces a battle to get congressional approval for the pact as much of the opposition has been voiced by his own Democratic party, however many Republicans have been broadly supportive of the deal.
The revision to the pact did not deal with the issue of US beef, despite Washington pushing Seoul to accept older cattle.
The issue was especially sensitive for Lee, who has faced major street protests by Koreans concerned about mad cow disease in US cattle.
US officials said beef exports have already grown and would rise further with tariff restrictions, but they conceded that South Korea had not made concessions on the cattle age.