Korea is one of New Zealand's most significant and promising trading partners and the signing of a free-trade agreement between the two countries is an important step in creating more opportunities for businesses.
But the news of the signing of the agreement should be taken in the historical context that it is being regarded as a ''catch-up'' trade deal, as it will take 10 to 15 years for many products to become tariff-free. New Zealand exports into Korea attract $229 million a year in duties.
Tariff reductions in the first year of the FTA alone are estimated to save $65 million.
The remaining tariffs will largely be eliminated within 15 years.
The deal's main winners will be New Zealand's dairy, red meat, kiwifruit and wine exporters.
Korea is New Zealand's sixth-largest export destination for goods and services and the eighth-largest import source.
Total two-way goods trade is an annual $4 billion.
In terms of investment, Korea is only the 16th-largest source of foreign investment in New Zealand. But recent deal activity suggests there is potential for Korean investment to increase markedly in the future.
Importantly, Korea is New Zealand's fourth-largest source of foreign students and its seventh-largest source of overseas visitors.
Both the student and overseas visitor sectors have potential to grow.
Reports on the agreement are unclear on precisely what the deal will offer New Zealand's exporters of industrial goods.
The market access concessions New Zealand has granted Korean exporters are unlikely to concern local producers as, for the most part, Korea produces a much different product mix to New Zealand.
This is an agreement that had to happen and it is a critical win for New Zealand's primary product exporters who have been struggling to compete in Korea as their main foreign competitors all benefit from earlier FTAs with Korea.
Korea has concluded FTA negotiations with Australia, Canada and China within the past year and already offers preferential treatment to Asean member states, Chile, Colombia, the European Union, India, Peru, Singapore, Turkey and the United States.
New Zealand lives on its traders and FTAs have been a lifeline to domestic exporters as they battle to get their products on to overseas shelves.
The New Zealand sheep and beef sector is worth $8.5 billion, with close to 90% exported, on which exporters paid $318 million of tariffs in 2013.
A significant proportion of those tariffs were paid in Korea where applied tariffs on New Zealand beef exports were 40%.
Korea is New Zealand's fourth-largest beef market by volume, taking nearly $125 million of beef exports last year.
But trade volumes have dropped significantly in recent years, partly due to competitors such as the US, and more recently Australia and Canada, having a tariff advantage through their FTAs with Korea.
The draft deal has already undergone legal verification in New Zealand and is now being translated into Korean.
This could take a couple of months.
Parliaments then complete their domestic ratification with the process expected to be completed in the first half of next year.
The New Zealand ratification process seems unlikely to be eventual but the Korean process may be difficult.
Korea imports more than half of its agricultural needs, yet the remaining industry is highly protected.
The FTA negotiations were stalled between 2010 and 2013 as a result of Korean concerns about the impact of New Zealand agricultural exports - notably beef - on domestic producers.
Korea's recent change of heart is almost certainly connected to its interests in joining the Trans Pacific Partnership.
Recent FTAs, particularly with China, have proved beneficial to New Zealand and it is likely the Korean one will prove just as useful.
Once the deal is finalised, New Zealand will turn its attention to concluding the TPP negotiations and potentially launching FTA negotiations with the EU and Saudi Arabia in a continuing move to open up more markets free from the restrictions of tariffs.
