China and South Korea on Monday formally signed a free trade agreement (FTA) that would remove most tariffs between Asia's largest and fourth-largest economies, whose trade is already worth more than $200 billion.

The pact -- largely agreed in November and signed by the two nations' trade ministers on Monday -- aims to gradually remove tariffs on more than 90 percent of traded goods within 20 years.

China is the South's top trading partner as well as the biggest export market, and two-way trade stood at around $235.3 billion in 2014, according to state data in Seoul.

South Korea is also one of the biggest foreign investors in China, pumping in some $1.6 billion in the first quarter of this year.

South Korean President Park Geun-Hye, in a letter to Chinese leader Xi Jinping, called the accord a "historic milestone" that would further cement relations.

"The Korea-China FTA will ... take the bilateral ties that had been built over the years to a whole new level," Park said in the letter delivered to the visiting Chinese trade minister Gao Hucheng.

Pending mandatory parliamentary approval, the FTA will allow small and medium-sized South Korean firms greater access to China's vast consumer market and help create more than 50,000 jobs in the South, Seoul's trade ministry said.

"In particular, exports of consumer goods in fashion, cosmetics, home appliances and high-end food products will increase greatly," it said in a statement.

The agreement will remove tariffs on 71 percent of South Korean exports to China in 10 years and 91 percent in 20 years.

Seoul will in return remove tariffs on 79 percent of Chinese imports in 10 years and 92 percent in 20 years.

Negotiations for the agreement, which began in May 2012, have often been marred by angry protests by South Korean farmers who feared an influx of cheap Chinese imports.

The final pact excluded many of South Korea's major farming and fisheries goods like rice, beef, pork, pepper and squid.

By the same token, China excluded or delayed the opening of its relatively less-developed manufacturing segments such as the auto sector and display panel production.

Kim Hyuung-Joo, an analyst at the LG Economic Research Institute, said the arrangement may eventually bring more harm than gain to the South.

"I don't think South Korea's well-protected agriculture sector will be able to improve competitiveness in 10 or 20 years," Kim said.

"But the sectors China managed to protect like LCD (liquid crystal display) panels or carmaking will surely improve their productivity and competitiveness," he added.