Brussels  - The European Union on Thursday reached a 19- billion-euro (28.3-billion-dollar) free trade agreement (FTA) with South Korea, its biggest ever with a non-EU country.

The deal, initialled in Brussels by EU Trade Commissioner Catherine Ashton and Korean Trade Minister Kim Jong-hoon, aims to remove most tariffs and non-tariff barriers between the two economies.

"This is the first 21st-century free trade agreement for the EU, creating deep economic ties with another developed economy," Ashton said.

"This agreement is particularly important in the current economic climate, helping to fight the economic downturn and create new jobs," the commissioner said.

The deal eliminates 1.6 billion euros of duties for European exporters and addresses barriers to trade in a number of industries, including the automotive, pharmaceutical and consumer electronics industries.

Officials in Brussels say the FTA also commits South Korea to liberalize service sectors, including telecommunications, finance and shipping.

The FTA is expected to come into force during the second half of next year.

The trade in goods between the EU and Korea was estimated at 65 billion euros in 2008. (dpa)