New Zealand is to resume free trade talks with South Korea, possibly as early as October.
The surprisingly strong announcement was made by Prime Minister John Key this evening, following a meeting with new President Park Geun-hye at the spectacular Blue House, South Korea's presidential palace.
Free trade talks kicked off between the two countries in 2009 but foundered a year later. Mr Key has made no secret of his hope that this week's visit, which coincides with the 60-year anniversary of the ceasefire in the Korean War, would lead to talks being restarted.
Ahead of the trip he had been coy about the prospects, and said even an informal signal that talks could resume would make the visit a success.
But Mr Key emerged from the meeting beaming, saying an agreement had been reached to resume the talks.
"Officials still need to belt out the details and that is always a long and drawn out process, but it's good news."
South Korea is New Zealand's fifth largest trading partner, the source of $1.55 billion in exports in 2012, while we imported $1.8bn in goods from South Korea.
However there is a clear disparity in tariffs.
New Zealand companies paid around $195 million in tariffs in 2012, while Korean companies paid only around $5m.
Speaking at a meeting with Kiwi veterans of the Korean War in Seoul today, Mr Key said he did not believe the situation was "right or fair" given the contribution New Zealand had made.
It was the first time Mr Key had linked New Zealand's assistance to the South Koreans during the war to hopes for a trade deal.
After the meeting Mr Key said he had made it clear to President Park that he did not believe the situation was fair, and she had acknowledged this.
He declined to give any indication about when a free trade deal would be signed, but indicated that he would prefer negotiations took longer if it meant a more comprehensive deal was concluded.
"It doesn't mean a deal absolutely will be committed but it's the very best we could have hoped for given the circumstances," Mr Key said.
Earlier he took part in a wreath laying ceremony at Korea's National Cemetery, accompanied by the 30 New Zealand veterans in Korea to mark the armistice.
On Saturday Mr Key will address an estimated 4000 people at the official Armistice celebrations, where he is speaking on behalf of the nations which contributed to the United Nations forces defending South Korea from the communist north.
- Fairfax Media
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