New Zealand today (7 April) became the first developed country to sign a free trade agreement (FTA) with China, giving exporters of products like wool increased access to the world's fastest-growing major economy.

Under the agreement, which comes into effect from 1 October 2008, China will gradually reduce tariffs on 96% of current exports from New Zealand by 2016.

In return, tariffs of up to 14% on imports of Chinese-made textiles, clothing and footwear will decline to zero over the next nine years.

China is already New Zealand's most important single country market for wool exports, and the new trade pact provides certainty of access for wool shipments.

The FTA provides for a Country-Specific Tariff Quota (CSTQ) of 25,000 tonnes of clean wool to be imported from New Zealand.

This will increase by 5% each year until 2017, creating an eventual country-specific tariff quota of almost 37,000 tonnes.

For exports outside the CSTQ, New Zealand exporters will still be able to access China's global wool quota.