New Zealand is to start trade negotiations with Taiwan.
If successful, they would eliminate trade barriers in New Zealand's eighth largest export market.
Trade Minister Tim Groser says agricultural exports to Taiwan currently face high tariffs.
Sheepmeat exports pay 15% tariffs, costing the industry $20 million last year.
Fonterra says tariffs on dairy products there are relatively low.
But head of trade policy Ken Geard says the deal helps build momentum for a free trade area covering the Pacific Rim and including New Zealand.