Korea and New Zealand announced Saturday they had completed a free trade agreement, boosting hopes of an uptick in trade, investment and industrial and people-to-people exchanges.

The announcement was made after a summit between President Park Geun-hye and New Zealand Prime Minister John Key on the sidelines of the Group of 20 summit in Brisbane, Australia.

Negotiations began in June 2009. The two countries are expected to sign a preliminary deal by the end of this year and an official version early next year. Its ratification requires parliamentary approval.

“The FTA will provide a foundation to further expand and develop bilateral investment and trade,” Park told a joint news conference.

With the pact, New Zealand became Korea’s 52nd free trade partner, joining a growing list of major economies, including the U.S., China, the European Union and the Association of Southeast Asian Nations.

Wellington has free trade deals with 15 other countries including China, ASEAN, Australia and Chile.

The latest agreement will also facilitate Seoul’s future participation in the U.S.-led Trans-Pacific Partnership as New Zealand is one of its 12 members, Seoul officials say. 

Though bilateral trade volume remains less than $3 billion as of 2013, Seoul officials envisage a sharp rise in demand for Korean products given that New Zealand boasts a gross domestic product per capita of nearly $42,000 but relies heavily on imports for industrial goods.

The accord will eliminate tariffs on some 96 percent of industrial and consumer goods over the next two decades.

Upon its effectuation, 92 percent of imports from Korea such as tires and washers will instantly become tariff-free and the remainder within seven years. Seoul, for its part, will immediately remove duties on 48.3 percent of imports from New Zealand and 96.5 percent of them within 20 years.

A total of 199 items are exempted from concessions, including rice, chili peppers, garlic, apples, pears and other sensitive agricultural products. Another buffer will be provided for dry milk, New Zealand’s top export, with only up to 1,957 tons of it to be freed from tariffs even after 10 years, which amounts to about 5 percent of the Korean market.

The threshold for approval requirement for Korean investors in New Zealand is set at NZ$50 million, while that for other countries hovers around NZ$20 million in general.

Both sides also agreed to expand their working holiday program to 3,000 students from 1,800 a year, under which Koreans aged between 18 and 30 can spend as long as one year studying, interning and traveling in New Zealand. A total of 200 temporary work visas will be issued for Koreans annually, and an extra 50 for training in agriculture and livestock-breeding.

The ruling Saenuri Party welcomed the deal, saying it will help invigorate the economy alongside the recently concluded free trade pacts with China, Canada and Australia.

The main opposition New Politics Alliance for Democracy, however, criticized the administration for “hastily completing” FTAs to be timed for the president’s overseas trips.

“We can’t help questioning if it regards FTAs simply as a ceremonial item for a summit,” chief spokesman Yoo Ki-hong said in a statement. “The series of FTAs is stoking anxiety among farmers, fishermen and those engaged in the livestock industry who are likely to suffer from them. We urge the government to come up with adequate countermeasures.”

Also on Saturday, Park introduced her plans to abolish “ineffective and irrelevant” regulations by 10 percent this year and 20 percent until 2017 at a retreat session, and a three-year vision for economic growth at a dinner meeting.

With a frail global recovery, she called for a “prudent” monetary policy at another session Sunday, expressing concerns over “downside risks” caused by conflicting strategies such as the U.S. Federal Reserve’s recent increase in interest rates and a fresh round of quantitative easing in Japan.

Wrapping up the two-day conference, members of the G20 unveiled a series of measures to shore up their economies by an additional 2.1 percent over five years notably through trade and infrastructure investment. 

They also pledged support for “strong and effective action” to fight climate change, despite host Canberra’s opposition to including the issue on the agenda, which stoked tension with the U.S. and European countries.

On the summit’s margins, Park held talks with Saudi Arabia’s Crown Prince Salman bin Abdulaziz Al Saudi on Sunday. She said she was considering reviving a canceled visit to Riyadh next year and hoping to step up cooperation in unconventional areas such as health care, defense, finance and renewable energy, Cheong Wa Dae said.

The Middle Eastern country is Korea’s top supplier of crude oil and its largest market for construction and engineering.

Park returns to Seoul on Monday.

By Shin Hyon-hee (heeshin@heraldcorp.com)