Israel and South Korea have concluded three years of negotiations on a free trade agreement, officials announced on Wednesday, paving the way for a major boost in bilateral trade.

Israeli Prime Minister Benjamin Netanyahu praised the agreement—the first with an Asian country—calling South Korea a “global leader.”

“Israel is a vibrant, advanced economy, and I think our partnership will do tremendous good for both our economies. I’m sure it will multiply our trade, which already stands at $2.5 billion. It will grow a lot,” he said during a meeting with South Korean Trade Minister Yoo Myung-hee.

Yoo Myung-hee agreed, saying that the agreement is a “significant and historic” one.

“South Korea and Israel, we have a lot of similarities, and also we have complimentary economic structure. Based on this FTA, I’m sure that it will further promote our trade and investment as well as further promote our technology cooperation,” she said.

The deal is expected to boost already increasing bilateral trade between the two countries. In 2018, trade between Israel and South Korea amounted to about $2.5 billion—an almost 15 percent increase over 2017.

According to the agreement, almost 95 percent of Israeli exports to South Korea will be exempt from customs duties, including machinery and electrical equipment, mechanical devices, fertilizer, medical equipment, cosmetics, plastics, metals, fruit juices and wine.

At the same time, customs duties will be lowered on South Korean goods imported into Israel such as automobiles and automobile parts, refrigerators, medical equipment, electronic components, toys and games, plastics and chemicals.

South Korea, which is the 11th-largest economy in the world, is a leading producers of high-tech items such as memory components and semi-conductors. It is also one of the leaders in shipbuilding and automotive manufacturing.

The Israeli government said the agreement “will provide a competitive advantage and ease activity for Israeli exporters in the South Korean market, thus strengthening Israeli exports and increasing economic growth. The annual benefit to the economy will facilitate a better jumping-off point for Israeli exports.”

Economy and Industry Minister Eli Cohen echoed his South Korean counterpart’s enthusiasm.

“South Korea is an important trade partner for the State of Israel,” he said. “The international-trade agreements are, as a rule, of strategic importance for the Israeli economy and assist in increasing exports, and lowering the cost of raw materials, which increases the competitiveness of Israeli exporters and constitute welcome news for Israeli consumers in light of the entry of a broad range of products without customs duties.”

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