New Zealand, Chile and Singapore have signed a three-way free trade plan that spans the Pacific and holds significant economic and strategic advantages for each of them.
Prime Minister Helen Clark signed the deal on Saturday at the Asia Pacific Economic Co-operation (Apec) summit in Mexico.
In a separate Apec development, New Zealand and Mexico took the first steps towards talks on a trade deal by agreeing to study the potential benefits of a closer economic partnership (CEP).
Helen Clark said the NZ-Chile-Singapore plan was a bridge between Latin America, the Pacific and Asia.
"This is a win-win situation for Chile and New Zealand," she said.
"It will provide a foothold in Latin America, it will open trade and it will be a model for other agreements."
New Zealand already has a free trade agreement with Singapore, and serious talks with Chile will start in the middle of next year.
The aim is to have a comprehensive, three-nation free trade agreement signed in October 2004.
Chile President Ricardo Lagos said the agreement - which offered employment, investment and business opportunities for his country - would be achieved.
"We share the same political perspectives. This is the first time there has been an agreement between countries in South America, Asia and the Pacific," he said.
New Zealand trade with Chile is small, because both countries produce similar goods, but Helen Clark said there was huge scope for New Zealand to export services.
"As part of this we want primary industry co-operation - New Zealand has a lot of technology to offer, and Chile needs it," she said.
Helen Clark put strong emphasis on the strategic importance of forging the three-way agreement.
"This is a pacesetter, an example for Apec of what can be achieved."
She is still pushing New Zealand's case for a free trade agreement with the United States, although US officials have made it clear this country is not even on its list of possible partners.
But the Prime Minister said the three-way deal was a building block.
"Singapore hopes to conclude an agreement with the US in November, Chile has been negotiating for two years, Australia hopes to start negotiations - a number of pieces in the jigsaw are starting to come together."
Agriculture Minister Jim Sutton said a closer economic partnership with Mexico would give New Zealand significant economic benefits.
"Mexico is already our largest Latin American export market and our 14th largest market worldwide."
New Zealand exports to Mexico are worth $515 million a year and are made up mainly of dairy products, sheep meat and beef.
"Mexico is an important Asia-Pacific economy and has 31 trade agreements, including with the United States [through the North American Free Trade Agreement] and the European Union," said Mr Sutton.
"A CEP with Mexico would enable New Zealand to compete on equal terms with these other economies."
- NZPA
Clark signs three-way free trade plan
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