New Zealand could sign a free trade agreement (FTA) with South Korea within a year, Prime Minister John Key says, as he warned talks needed to be treated with urgency.
South Korean President Park Geun Hye this week told Key that the country was prepared to resume FTA talks - which stalled in 2010 - with discussions starting as soon as October.
Today Key told the Kiwi Chamber - a Seoul business group - that progressing the talks needed to be treated with "urgency".
Both countries had signed FTAs with other countries, and needed to ensure that the stiff tariffs imposed by South Korea did not hurt the relationship.
"We need to get our deal done to ensure that the bilateral trade relationship keeps pace with the trade relationships we have with other countries."
Earlier he told reporters that he believed the deal could potentially be signed within a year, and the odds of an agreement within three years was 65 per cent.
"There are always potentially sticking points and in the end it can come down to quality of the agreement but I'd have to say, on balance, I'm better than 50:50 we'll get there," Key said, with confidence based on the feedback he had had while in South Korea.
It was possible a deal could be struck within a year he said.
The talks this year would flush out whether South Korea was genuine in its desire for an agreement.
A free trade deal with South Korea would be worth "billions", Key said. The country had a population of 50 million, their wealth per capita was similar to New Zealand's and they were destined to become wealthier.
"I don't think there's any question these are consumers with money, they've got the appetite for what we want to sell. Great opportunity."
Sir Graeme Harrison, the founder of meat processing company ANZCO and chairman of the NZ International Business Forum, said New Zealand had only limited product to sell to the world, but a deal with Korea would help spread risk.
"This is about a balance of risk, because clearly we don't want to put all our eggs in one basket."
Harrison said business with South Korea was already being eroded by its agreements with other countries. Exports of beef were being hurt by the US FTA with South Korea while kiwifruit exports to were being hit by Chile's agreement with Seoul.
Meanwhile, New Zealand's tariffs on product to China, Hong Kong and Taiwan - which for the purpose of the free trade deal is with Chinese Taipei - would be eliminated by 2016.
"Bit by bit the tariffs on other countries disappear, and we're still sitting at 40 per cent, which we don't have to face elsewhere."