The dairy industry hopes an upgrade to New Zealand's free trade agreement with China will free up millions of dollars for exporters.
At last weekend's Asia-Pacific Economic Cooperation (APEC) meeting Prime Minister John Key announced discussions around our trade deal with China will take place early next year.
Dairy Companies of New Zealand executive director Kimberly Crewther says about $100 million is lost in tariffs every year.
"The removal of those tariffs will mean that Chinese consumers benefit, through the reduction and the costs on the products that they are purchasing. New Zealand exporters will also benefit by having an improved competitive position.
"It's the largest market for New Zealand dairy products and we're exporting around 2.7 billion products there per annum.
"Around about a quarter of New Zealand's dairy trade receives preference under the FTA negotiation. What we're hoping is that the upgrade process will expand coverage across all of New Zealand's dairy imports."
The move toward China is expected to fill any void left by a US withdrawal from the Trans-Pacific Partnership, which would result in that agreement not proceeding in its current form.
The negotiations will look to improve or enhance the broad range of areas already covered by the FTA, Mr Key says.
The re-negotiations will include technical barriers to trade, customs procedures, cooperation and trade facilitation, rules of origin, services, and environmental cooperation. It will also address a number of newer areas such as competition policy and e-commerce.