South Korea and Israel have formally signed a bilateral free trade agreement(FTA), allowing Korean automobiles, auto parts and other goods to be shipped to Israel tariff-free once it takes effect.

Trade Minister Yoo Myung-hee and Israel's Economy Minister Amir Peretz signed the deal at a Seoul hotel on Wednesday.

South Korea is the first Asian country to have an FTA with Israel. The two sides declared the launch of negotiations in May 2016, and held six official rounds of talks before concluding the deal in August 2019.

Minister Yoo expressed hope that Israel's source technologies and South Korea's strong manufacturing can produce a synergy effect.

Tariffs will be lifted on over 95 percent of imports on both sides. Those on cars and auto parts, which accounted for 47 percent of all South Korean exports to Israel last year, will be lifted immediately. 

Korean vehicles are the leader in Israel's imported car market with a share of 17-point-six percent as of 2019.