Under the deal, EFTA member nations, which includes Iceland, Norway, Switzerland and Liechtenstein, will immediately terminate tariffs on all imports from Korea, while Seoul will eliminate tariffs on 99.1 percent of imports from EFTA countries over the next 10 years.

The agreement, which covers industrial and agricultural goods, services and intellectual property, is expected to take effect in July 2006. It is anticipated that the deal will serve as a major boost for Korean exporters of cars, electronics, textiles and white goods, and for Swiss exporters of machine tools, precision instruments, chemical and pharmaceutical products.

The agreement also recognises products made at the Kaesong Industrial Complex, a special industrial zone in North Korea housing South Korean companies' factories - only the second such agreement to include the Kaesong Complex after Singapore signed a free trade deal with South Korea in August which included products made at the North Korean site.

The free trade accord is the fourth that EFTA has signed with countries outside Europe and the Mediterranean region after those with Mexico, Singapore, and Chile.

Commenting on the agreement, Mr Deiss stated that Switzerland remains committed to the WTO's ideal of multilateralism.

"What we are doing is more the result of our contacts inside the WTO," he stated.

"When it comes to such treaties, we go beyond the WTO. As a result, this approach is complementary," Mr Deiss added.