Defence aid also on the agenda

While the focus will be on free trade, New Zealand's defence commitments to South Korea are also likely to be on the table when Prime Minister John Key meets South Korean President Park Geun-hye today.

Mr Key arrived in Seoul last night, several hours after a party of New Zealand Korean War veterans visited the demilitarised zone (DMZ) that separates North and South Korea.

Ahead of Mr Key's arrival, New Zealand's military attache to South Korea, Colonel Jeremy Ramsden, told reporters visiting the DMZ with the veterans: "The Government's next month reviewing the mandate of our contribution here."

Despite having just three New Zealand defence personnel stationed at the DMZ, "we are a significant contributor", Colonel Ramsden said.

That contribution was "hugely appreciated" by the United States, which had almost 30,000 personnel stationed in South Korea, but there were options to increase New Zealand's involvement beyond the UN monitoring of the armistice and DMZ.

However, NZ First leader and former Foreign Minister Winston Peters - who in 2007 made a rare visit by a Western politician to North Korea - believes New Zealand could help ease tensions on the peninsula by better exploiting its diplomatic ties with the communist country.

But Mr Peters' predecessor as Foreign Minister, Phil Goff, under whom diplomatic relations were established in 2001, is vehemently opposed to anything except narrowly focused engagement on the nuclear issue.