China and Chile signed Friday in Busan a free trade agreement, the first of its kind between China and a Latin American country.

The pact was signed by Chinese Commerce Minister Bo Xilai and Chilean Foreign Minister Ignacio Walker. Chinese President Hu Jintao and his Chilean counterpart, Ricardo Lagos, attended the signing ceremony.

The Chinese and Chilean leaders are in South Korea's southeastern port city of Busan to attend the Economic Leaders' Meeting of the Asia-Pacific Economic Cooperation (APEC) forum which opens on Friday.

Both China and Chile are members of the 21-member forum.

Under the agreement, the two countries will fully launch on July 1, 2006 the tariff reduction process of goods trade.

The free trade negotiations were launched by the Chinese and Chilean presidents on Nov. 18, 2004, when Hu paid a state visit to the Latin American country.

The two countries have held five rounds of consultations involving such topics as market access, technology and trade barrier, dispute settlements and cooperation.

It is the second free trade agreement China has signed following the one between China and the Association of Southeast Asian Nations (ASEAN).

Source: Xinhua