South Korea and China officially signed their bilateral free trade agreement Monday, taking a step closer to implementing what officials here call a mutually beneficial and significant trade pact.

The agreement was signed by South Korean Trade Minister Yoon Sang-jick and his Chinese counterpart Gao Hucheng in Seoul, about six months after the two countries declared the conclusion of their negotiations that began in May 2012. The bilateral trade pact was initialed in Beijing on Feb. 25.

The countries now only need approval from their respective legislatures before implementing the deal, which they plan to do before the end of the year, according to trade officials here.

"The Korea-China FTA will not only help expand the countries' bilateral trade and investment, but also become a platform for mutual cooperation through which the countries' governments and businesses will seek new and joint growth engines," the trade ministers said, according to Seoul's Ministry of Trade, Industry and Energy.

The FTA will be one of the largest and most significant free trade deals signed by South Korea as China is already, by far, the world's single largest importer of South Korean goods, accounting for more than one-fourth of South Korea's overall exports in 2014.

Immediately following its implementation, the Korea-China FTA will help expand South Korea's trade territory, represented by the combined gross domestic product of countries with which South Korea has an FTA, from the current 61 percent to 73 percent of global GDP.

It is also expected to help boost the countries' annual bilateral trade to more than $300 billion, a 39.5 percent hike from $215.1 billion in 2012, Seoul's trade ministry said.

In the 10 years following its implementation, the free trade deal is expected to boost South Korea's real GDP by 0.96 percent while creating some 53,800 new jobs.

For China, too, the FTA will be significant and meaningful.

A ministry official noted the Korea-China FTA will equally help expand China's economy and trade.

However, benefits of the free trade pact will be more political than economic, said the official while speaking on condition of anonymity.

The Korea-China FTA comes as Beijing is moving to create an economic bloc in Northeast Asia, apparently as part of efforts to strengthen its leadership while also countering the U.S. presence in the region.

"Through the Korea-China FTA, China may have sought to embrace South Korea while competing for economic and political leadership in Northeast Asia," the official said.

China is currently seeking to sign a three-way FTA with South Korea and Japan while also pushing for a regional FTA, known as the Regional Comprehensive Economic Partnership, that again involves South Korea and Japan, along with 13 other countries, including Australia, India and New Zealand.

In a letter to South Korean President Park Geun-hye, Chinese President Xi Jinping noted the agreement will greatly contribute to economic integration in East Asia.

"Signing an FTA between South Korea and China, major economic players in East Asia and the Asia-Pacific region, is a monumental event. This will not only lead to a new leap in trade relations between the two countries but also bring practical benefits to the people of both countries," Xi said in his letter released by Seoul's trade ministry.

Park agreed the bilateral FTA will mutually benefit both countries.

"The Korea-China FTA will bring a wide range of opportunities and benefits to the people and businesses of both countries, and become a historical milestone in the countries' efforts to deepen their strategic cooperative partnership," she said in her reply to her Chinese counterpart.

Trade officials here also said the Korea-China FTA is the first of its kind ever signed by Beijing that has separate chapters on electronic trade, finance and communications.

"To China, this means it has accepted and opened its market to international norms, which means it can be on the offensive side while negotiating for future FTAs with other countries," the official said.

Under the Korea-China FTA, Seoul will eliminate its import tariffs on 79 percent of all products, or 9,690 goods, from China within 10 years following its implementation.

Beijing will do the same on 71 percent of all products, or 5,846 items, from South Korea over the cited period.

In the 20 years after the FTA goes into effect, South Korea will have eliminated its tariffs on 92 percent of all products from China with China eliminating its tariffs on 91 percent of all products from South Korea. (Yonhap)