Australia has sealed a free trade agreement (FTA) with South Korea that will eliminate tariffs of up to 300 percent on Australia's major exports, notably agricultural products and resources, Prime Minister Tony Abbott said on Thursday.

South Korea is Australia's third biggest export market and fourth biggest trading partner, with two-way trade totalling A$31.9 billion ($28.76 billion) in 2012, and Australian exports to Korea accounting for A$21.6 billion.

While the agreement will boost Australian farm exports, Abbott said in a statement that some Australian industries, such as cars and automotive parts, may face increased competition from Korean imports.

"The FTA secures Australia's position in a major market where competitors like the United States, European Union and ASEAN countries are already benefiting from preferential access," Abbott said in a statement.

The pact with Korea is the first such deal secured by Abbott's government following its September election victory, but it wants more with Asian trading partners that buy most of its resources and raw materials, notably Japan and China.

The FTA, concluded earlier this week, will come into effect after completing the approval processes in both countries.

While Abbott stressed the benefits to all markets, including investment and services, analysts said the greatest rewards would be seen in agriculture.

Korea is the third largest buyer of Australian beef and veal, figures from the Australian Department of Agriculture show, and it is expected to import 142,000 tonnes during the 2013/14 season, a rise of 3 percent from the previous season.

Before the trade agreement was settled, Australia's beef farmers had become increasingly concerned about losing market share to the United States.

"The deal is significant for beef," said Matt Linnegar, chief executive officer of the Australian National Farmers Federation told Reuters from Indonesia. "The differential between Australia and the U.S. stands at about 5 percent... but it would have been 8 percent next year without the deal so we would have been at an increasing disadvantage."

The U.S.-Korean FTA came into force last year, which offered a 5.3 percent lower tariff than Australian beef and veal. The tariff on U.S. beef would be eliminated over 15 years.

The tariff on Australian beef will also be removed in 15 years. Until then Australian beef will face a higher tariff than shipments from the United States, but farmers said they will remain competitive.

Under the terms of the agreement, several commodities will see an immediate removal of tariffs, including wheat and raw sugar, opening up an already key market.

Australia is the world's second largest wheat exporter, and during the 2012/13 season Korea was its second largest customer, figures from the Australian Department of Agriculture show.

Korea is the largest customer for Australian sugar, buying A$495 million worth of the commodity, data from the Department of Agriculture showed.

Australia is the world's third largest raw sugar exporter.

($1 = 1.1092 Australian dollars) (Reporting by Maggie Lu Yueyang; Editing by Simon Cameron-Moore)