Korea has initiated a free trade agreement (FTA) with China. The two countries have agreed to work for the official signing of the pact within the first half of the year, said Deputy Trade Minister Woo Tae-hee on Wednesday.

Following the deal, Korea will eliminate tariffs on 92 percent of imported items from China within the next 20 years. China will scrap tariffs on 91 percent of items imported from Korea, within the same period.

The deal makes Korea the only major economy to sign an FTA with the world's three biggest economies ― the U.S., China and the EU.

The government said that the deal would help Korea secure a foothold in a huge market whose GDP had been growing by more than 7 percent a year. Korean goods make up 9.7 percent of China's import market, followed by Japan at 8.3 percent and the U.S. at 7.8 percent.

The Ministry of Trade, Industry and Energy said that just as China's joining of the World Trade Organization (WTO) turned out to be the best opportunity for Korea's economic development, the Korea-China FTA will become a second such opportunity for them.

The FTA also includes 310 items made in the inter-Korean Gaesong Industrial Complex (GIC) in North Korea. They will enjoy a tariff reduction or elimination the same as products "made in Korea" when exported to China. This compares with free trade deals Korea had signed with ASEAN, where only 100 items from the GIC were given such privileges.

The government said that sales of fashion and consumer electronic products, petrochemical, steel and machinery would get more opportunities to grow in the Chinese market.

While the government is trying to highlight the deal's positive side, small- and medium-sized enterprises (SMEs) that have focused on selling goods in the domestic market are expected to get a blow from Chinese competitors, as tariffs were lifted on most of the textiles and daily goods categories.

According to a Korea Small Business Institute report, SMEs making textiles, furniture and other daily goods are expected to suffer. The SMEs want government measures to support them.