The European Parliament's decision to support negotiations on a free trade agreement with New Zealand has been welcomed by Trade Minister Todd McClay.

"The European Union is the notable missing link in our network of FTAs with our major trading partners and it is a big missing link, with total GDP of more than $20 trillion," said Mr McClay, who last month travelled to Europe to meet with counterparts and push for an agreement.

New Zealand has for years attempted to improve trade conditions in what is a market of 500 million consumers.

Current settings are about 30 years old and many New Zealand exporters have become steadily disadvantaged as FTAs and preferential deals have been done with other countries.

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"The importance of completing an FTA with the EU cannot be understated. It has progressively expanded its own FTA network and our exporters have become increasingly disadvantaged -- for example, manufactured products face tariffs of up to 39 per cent," Mr McClay said.

"And our agricultural exporters face average tariff rates into the EU of 31.3 per cent. Competitors from countries like Chile, Singapore, South Africa, Argentina, Vietnam and Korea enter the EU tariff-free."