The European Union (EU) approved a free trade agreement with South Korea, clearing the way for the accord to be signed in the near future, diplomats have said in Brussels.

Foreign ministers from the 27-member bloc agreed to allow the trade pact to take provisional effect on July 1st, 2011, as Italy dropped its veto in return for a six-month delay to the treaty’s start.

South Korea and the EU are expected to sign the pact at a summit in Brussels on 6th October.

The treaty will come into full effect once EU member states, the European Parliament and South Korea have ratified it.

The two sides initialed the free trade deal in September last year, three months after concluding negotiations.

Last month, South Korea’s Cabinet approved the accord.

The pact must be ratified by South Korea’s parliament, EU member states and the European Parliament.

Under the accord, Seoul and Brussels will eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord is put into effect.

They have also agreed to abolish tariffs on most industrial goods within five years after the deal goes into effect.

The accord permits duty drawbacks, which allow refunds for tariffs levied on parts used by manufacturers to make products such as cars when the final product is exported.

But the deal also includes a provision that caps refundable tariffs should there be “dramatic changes in foreign outsourcing” within five years of the accord taking effect.

On the issue of the rules of origin, both sides agreed to limit the amount of foreign products at 45 percent of total goods.

In the case of auto parts and others, the level is set at 50 percent.