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New Zealand and Russia have agreed to begin laying the groundwork for formal discussions on Free Trade Agreement (FTA) negotiations.

The announcement followed a meeting between Trade Minister Tim Groser and his Russian counterpart, Elvira Nabiullina, Russian Minister of Economic Development, in Moscow.

“Russia has agreed to proceed towards a formal trade agreement with New Zealand, subject to a satisfactory outcome of scoping discussions.

“This is a significant step which in the long term could have significant potential for New Zealand businesses looking to expand into the broader European market,” Groser said in a press release.

With food imports totalling US$30 billion (NZ$44.15 billion) in 2008, Russia is the world’s fifth-largest food import market and is among the world’s largest importers of meat and dairy products.

Opportunities also exist in the wider agritech sector and in services where tourism and education are growing areas of interest.

“While there is much water to go under the bridge yet, an FTA with Russia and its Customs Union partners of Belarus and Kazakhstan could present a unique opportunity for New Zealand to future-proof its relationship with an emerging economic powerhouse.

“New Zealand’s current exports to Russia totalled NZ$187 million in 2009, which is relatively modest, but there is high potential and the trajectory is positive,” Grocer added.

New Zealand’s exports to Russia grew 267% from NZ$51.0 million in 2000 to NZ$187 million in 2009.

“An FTA could provide a boost to the trade relationship, and provide New Zealand with a significant ‘first-mover’ advantage, which would improve our position in the market relative to our trading competitors,” Groser said.

Officials will now take forward the scoping phase and report back to Ministers within the coming months.

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