New Zealand is poised to sign its first free trade agreement in more than three years, with an announcement of a deal with Taiwan expected in the coming months.
Sources say negotiations have been progressing smoothly and the most complicated issues, including the vexed issue of Taiwan's complicated relationship with mainland China, are already largely resolved.
Assuming it is completed, it would be the first deal concluded since a closer economic partnership was announced with Hong Kong in March 2010.
While New Zealand does not officially recognise Taiwan as a country, it is our 12th largest trading partner, having spent years in the top 10.
The island nation of 23 million people imported more than $800 million worth of products from New Zealand in the year to June 2012, and was the source of more than 18,000 tourists.
The deal could be worth ''tens of millions'' a source estimated, with the biggest winners likely to be producers of dairy products, meat, kiwifruit and in particular apples, where a drop in tariff could be ''transformational''.
Despite the lengthy trade relations, exporters often face tariffs of around 20 per cent in Taiwan.
Factors said to have complicated the passing of the deal are both New Zealand's relations with China, where trade has soared since a free trade agreement was reached, and Taiwan's own trade negotiations with mainland China.
Officially, both Taiwan and China claim sovereignty over the other, a situation which has maintained since the Communist Party took control of mainland China and established the People's Republic of China in 1949.
China makes adhering to a One-China policy a pre-condition of diplomatic relations.
New Zealand's relations with Taiwan are now maintained through an office of the Wellington Employers Chamber of Commerce of Taipei.
Sources say the issue of free trade with Taiwan was raised when Prime Minister John Key led a major trade delegation to China in April, as part of an established ''no surprises'' policy of keeping Beijing informed of our relations with China.
Trade Minister Tim Groser declined to comment.
- © Fairfax NZ News
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