South Korea said on Monday it had “effectively settled” terms on a trade pact with China, and expected to confirm outstanding technical and legal details by the end of this year.

The announcement on a deal to liberalise one of Asia’s largest bilateral trading relationships came after a meeting between President Park Geun-hye and her Chinese counterpart Xi Jinping at the Asia-Pacific Economic Cooperation summit in Beijing. It will bring sweeping cuts to tariffs on manufactured goods but there were large exemptions for agricultural products after Seoul came under pressure from farming lobbies.

Trade talks between Seoul and Beijing, under way since May 2012, are approaching conclusion amid jostling between the US and China to spearhead competing trade zones in the region. Against that backdrop, South Korea wants to avoid aligning itself with either China – by far its largest trading partner – or the US, on which it relies for protection from nuclear-armed North Korea.