The pact, secured after 10 months of tough negotiations amid sporadically violent protests, is "a strong deal for both Korea and the United States," Deputy US Trade Representative Karan Bhatia told a press conference.

South Korean Trade Minister Kim Hyun-Chong called it a "win-win" agreement. His country won its battle to exclude the politically sensitive rice crop from the deal.

The US is counting on the agreement, which needs legislative approval in both countries, to shrink its trade deficit with South Korea which amounted to 16 billion dollars in 2005.

South Korea will gain a major advantage in the US market over competitors Japan, Taiwan and China.

President Roh Moo-Hyun called the deal a "stepping stone for another economic leap forward in the nation's push to join the ranks of advanced countries."

In the auto sector, responsible for more than 80 percent of the US bilateral trade deficit, South Korea agreed to change its tax system on autos based on engine size which makes US models more expensive.

The two sides agreed immediately to scrap tariffs -- 8.0 percent in Korea, 2.5 percent in the US -- on all cars of less than 3,000cc and auto parts. Tariffs on larger models will be phased out later.

Overall nearly 90 percent of each side's tariffs on industrial goods will be scrapped immediately, said South Korea's chief negotiator Kim Jong-Hoon.

After a tense final negotiating session lasting some 26 hours, the pact was approved just before a deadline of midnight Sunday Washington time.

Japan cautious over new deal
Another report from Tokyo adds:

A Japanese official voiced caution Monday over the landmark free-trade deal between Seoul and Washington, which would give South Korean products an edge in the world's biggest consumer market.

"If the accord is launched, naturally we will face different tariffs in the US market and it will impact on Japanese industries," said Takao Kitabata, vice minister of economy, trade and industry.

"We have to see what kind of effect it will have in Japan," he told a regular press conference.

Japan and South Korea both built themselves into prosperity on the back of high-end exports of products such as electronics and automobiles, particularly to the United States.