New Zealand's prime minister Helen Clark and China's premier Wen Jiabao have signed a free trade agreement (FTA) between their two countries. It is the first FTA to be signed between China and a developed country.

Eventually the agreement will result in the elimination of tariffs on 96% of New Zealand’s exports to China, and it is estimated to increase New Zealand’s export revenue from China by between US$180mn to US$280mn every year.

"The signing of this agreement is a very significant achievement for New Zealand. It opens up new opportunities for businesses looking to engage with, or grow their existing links with, China. It will facilitate goods and services trade, and investment,” comments Clark.

“Overall, the FTA reduces barriers to our trade with China. It promotes co-operation in a broad range of economic areas, and also provides a platform for further engagement at the governmental, cultural, and people-to-people levels,” she adds.

In time with the signing of the agreement, New Zealand’s trade minister Phil Goff led a trade mission to the Chinese city of Hangzhou on April 7.