Israel will sign a free trade agreement with South Korea this week, marking the first such arrangement with an Asian market, the Economy Ministry said Sunday.
The agreement is also South Korea's first with a country in the Middle East.
The deal, meant to bolster bilateral trade by cutting out customs duties and offering safety nets on investments, will be signed this week in Seoul during a visit by Foreign Minister Gabi Ashkenazi and Economy Minister Amir Peretz.
More than 95% of Israeli exports to South Korea will be customs-free, the ministry said. Israel is working on similar deals with China, Vietnam and India, it added.
Ashkenazi and Peretz were to participate in a signing ceremony with senior Korean government officials during their official three-day visit. They were also to meet with leading members of the Korean business world, including executives from Samsung and Hyundai.
Ashkenazi said in a statement that the FTA is expected to significantly increase trade between Israel and South Korea, provide Israeli industry with a competitive advantage, and reduce the cost of imported Korean products.
Regarding imports from South Korea, tariffs are expected to drop to 7% on vehicles, vehicle parts, refrigerators, medical equipment, electronic components, toys, games, plastic products as well as chemicals.
The two countries have reportedly been in discussions about an FTA for at least a decade, but Korean concerns about how such a move would play out in the Arab world precluded its signing.
Peretz said that "the increase and expansion of exports are the engines of growth in the Israeli economy, the latter will help our country to emerge from the coronavirus crisis."
"I also hope that our citizens will benefit from lower prices on cars, mobile phones and other products from South Korea," he said.
The two sides will also sign an agreement to double the budget of KORIL-RDF, a joint research and innovation fund for Israeli and South Korean companies.
South Korea is the world's 12th economic power and Israel's third-largest trading partner in Asia, after China and India.
i24NEWS contributed to this report