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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.

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

โ€œThis 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,โ€ Groser said in a press release.

With food imports totalling US$30 billion (NZ$44.15 billion) in 2008, Russia is the worldโ€™s fifth-largest food import market and is among the worldโ€™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.

โ€œWhile 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.

โ€œNew Zealandโ€™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,โ€ Grocer added.

New Zealandโ€™s exports to Russia grew 267% from NZ$51.0 million in 2000 to NZ$187 million in 2009.

โ€œAn FTA could provide a boost to the trade relationship, and provide New Zealand with a significant โ€˜first-moverโ€™ advantage, which would improve our position in the market relative to our trading competitors,โ€ Groser said.

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

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