According to Yonhap News,

(SEJONG/SEOUL = Yonhap News) South Korea and Australia have virtually reached a bilateral free trade agreement (FTA), the South Korean government said Thursday.

"At a trade ministers' meeting held on Dec. 4 in Bali, Indonesia, South Korean Trade Minister Yoon Sang-jick and his Australian counterpart, Andrew Robb, confirmed that negotiations for the Korea-Australia FTA have virtually been concluded," South Korea's Ministry of Trade, Industry and Energy said in a press release.

The ministerial meeting came a day after the two countries held their seventh round of FTA talks also in Bali.

Ministry officials said the deal, if enacted as it is now, will greatly benefit both countries while effectively protecting some of South Korea's sensitive or vulnerable products.

"Australia has agreed to remove its tariffs on most of the products within five years while we agreed to remove tariffs on 92.4 percent of all products (from Australia) in terms of monetary value within eight years," Yoon told a press briefing.

Under the proposed deal, Australia will immediately and completely remove its 5 percent tariffs on 20 types of gasoline-powered vehicles from South Korea, which currently account for 76.6 percent of South Korea's automobile exports to Australia in terms of value, according to the ministry. Australia's import tariffs on all other types of vehicles from South Korea will be removed within three years.

Assistant Trade Minister Woo Tae-hee said such an agreement marked a concession from Australia, noting import tariffs on automobiles are usually removed within three to five years under most of other free trade pacts.

Reflecting South Korean farmers' sensitive reaction toward the liberalization of the food market, the agreement exempted South Korea from opening its markets for a number of what they called "very sensitive items," which include rice, powdered milk, potatoes and oysters.

The current agreement allows South Korea to gradually remove its import tariffs on 509 "sensitive items" including beef within 10 to 15 years following the enactment of the FTA, instead of eight years for most industrial products.

"In case of beef and dairy products, the country was able to better protect the local market with better terms than those of the Korea-U.S. FTA," Woo told reporters.

Currently, Australian beef accounts for 56.9 percent of South Korea's total beef imports, according to the ministry.

The negotiations for the Korea-Australia FTA were resumed last month after a 41-month break since May 2010 when the talks hit a deadlock over Australia's opposition to the so-called investor-state dispute (ISD) settlement system in the proposed agreement, among other issues.

The ministry said the countries have reached concessions on all previously contentious issues, including the inclusion of the ISD settlement system in the FTA, at the seventh round of negotiations held this week.

The FTA negotiations were first launched in 2009.

The two countries have agreed to hold an initialing ceremony within the first half of next year after they each make a legal review of their current agreement, the ministry said.

The text of the Korea-Australia FTA will be made public after the initialing ceremony, but the ministry said it was a comprehensive and high-level agreement consisting of 23 chapters dealing with products, customs, trade disputes, investments, and service and communications, as well as government procurement, intellectual property rights and cooperation.

Following the initialing of the proposed FTA, the countries will begin translating the agreement into Korean before the agreement can be officially signed and sent to their respective legislatures for approval, according to the ministry. Officials said Seoul hopes to put the Australia FTA into effect no later than Jan. 1, 2015.