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Key talks trade with Saudis in New York

NZ Newswire logoNZ Newswire 19/09/2016

Prime Minister John Key is optimistic a long sought-after free trade agreement with Arab states could be signed next year.

He's in New York for UN meetings and has held talks with Saudi Arabia's Deputy Prime Minister Muhammad bin Nayef bin Al Saud on the sidelines.

After the meeting Mr Key told reporters progress had been made and it was possible a FTA could be signed next year.

"I think it's making progress, I'm quite optimistic about it," he said.

Trade Minister Todd McClay will travel to the Saudi capital Riyadh next week for further talks.

If the FTA is achieved it will cover all the Gulf states, but Saudi Arabia must agree to it before that can happen.

Talks began in 2009 but ran into trouble over New Zealand's ban on the export of live sheep for slaughter.

Saudi Arabia effectively froze the negotiations, which only began to thaw after the government struck a deal to put more than $11 million into an agricultural hub on a desert farm owned by wealthy Saudi businessman Hmood Al Khalaf.

Opposition parties called it a bribe and the auditor-general is investigating.

New Zealand's exports to the Gulf states are worth about $2 billion a year and reducing tariffs would deliver significant benefits.

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