Trade Minister Tim Groser yesterday announced that New Zealand was joining an initiative to create a huge free trade region.

If the agreement succeeds it would cover an area with more than three billion people, 43 per cent of the world's population.

Mr Groser has been in Cambodia this week for trade meetings hosted by Asean, the Association of Southeast Asian Nations.

The countries which have agreed to the initiative are the 10 Asean countries - Indonesia, Malaysia, Singapore, Brunei, Myanmar, Thailand, Cambodia, Laos, Vietnam and the Philippines - and six countries with which Asean has existing free trade agreements: China, India, Korea, Japan, Australia and New Zealand.


The final go-ahead will be given by leaders at a summit in Cambodia in November which Prime Minister John Key is expected to attend.

New Zealand is already deeply involved in Trans Pacific Partnership negotiations which would be an FTA among 11 countries, including the United States.

That is expected to be concluded next year if US President Barack Obama is re-elected. If Republican Mitt Romney wins the election it would likely be delayed by a year.

Meanwhile, Finance Minister Bill English was in Moscow yesterday after meeting other finance and economic ministers from Pacific Rim Apec countries. He also met Russian Finance Minister Anton Siluanov about a free trade agreement between their countries. Mr English said there was still political will in Russia to conclude the deal.

Asked about the concerns of the finance ministers about Europe, Mr English invoked a famous line from former US Defence Secretary Donald Rumsfeld: "To use a dreadful term, I think it has become a known unknown.

"There isn't the fear there used to be of some kind of meltdown."