U.S, South Korea Reach Free -Trade Deal

The United States and South Korea have reached an agreement on a large free trade deal, which officials hope will create jobs and prosperity in both countries.

The agreement, which must be ratified by Congress, strengthens economic ties between Washington and Seoul at a time when the longtime U.S. ally faces an increasingly hostile northern neighbor.

If ratified, the agreement would eliminate tariffs on over 95% of industrial and consumer goods within five years.

"It is a strong, balanced package," a senior administration official said during a conference call with reporters, Friday. "It is a win-win both for Koreans and for Americans."

The U.S. International Trade Commission has estimated that the tariff cuts alone in the U.S.-Korea trade agreement will increase exports of American goods by $10 billion to $11 billion, and create tens of thousands of jobs.

Mr. President Barack Obama said he believed it could be beneficial for all involved.

"We believe that such an agreement if done right can be a win-win for our people. And it could be a win for the overall economic partnership between our two countries by bringing us closer together, allowing us to benefit from each other's innovations and ensuring strong protections for our workers rights and the environment," he said.

A spokesman for South Korean President Lee Myung-Bak said Friday he also approved of the new deal, which was reached after a three-year stalemate.

Compromises were found over issues such as keeping tariffs on imported South Korean-built cars in the United States for five more years and rules regulating exports of U.S. cars and trucks to Korea.

Business leaders in the United States have been very supportive of the efforts to reach the new trade deal with South Korea.

Lawmakers in both countries must still ratify the agreement for it to take effect.  If concluded, economists say it would be the largest trade pact for the United States since the 1994 North American Free Trade Agreement.