WELLINGTON - The New Zealand government and exporters said on Monday negotiations to upgrade the free trade agreement (FTA) with China could open up new areas of trade.

The two governments announced at the APEC Summit in Peru that negotiations to upgrade the bilateral FTA would begin in the first half of next year.

The announcement followed a meeting of New Zealand Trade Minister Todd McClay and Chinese Commerce Minister Gao Hucheng in Lima, while New Zealand Prime Minister John Key and Chinese President Xi Jinping welcomed the commitment to an upgrade at the APEC Leaders retreat.

"It has been eight years since our FTA with China came into force and it has exceeded all expectations. It has an enviable record and showcases to the world the importance of trade liberalization," Key said in a statement from his office.

"The upgrade will be an opportunity to deepen and broaden our comprehensive strategic partnership," he said.

"It will ensure that our FTA continues to drive our relationship forward and takes into account the FTAs that China has negotiated with other trading partners since 2008."

The negotiations would look to improve or enhance the broad range of areas already covered by the FTA.

This gave either party the ability to raise issues of importance to them, and included technical barriers to trade, Customs procedures, cooperation and trade facilitation, rules of origin, services, and environmental cooperation.

It would also address newer areas such as competition policy and e-commerce.

The Export New Zealand lobby group said the New Zealand-China FTA had been hugely successful, but both nations had negotiated other agreements since it came into force.

"The negotiation on the upgrade offers the opportunity to ensure that the China-New Zealand FTA remains as up-to-date as possible and remains one of the highest standard FTAs ever negotiated," executive director Catherine Beard said in a statement.

"While the existing FTA has largely removed tariff barriers between China and New Zealand, areas that could be improved include dairy volumes, chilled meat exports, processed wood products and SPS (sanitary and phytosanitary ) agreements for horticultural access," said Beard.

"The other focus is a number of technical barriers and trade and services barriers that still cause difficulties for New Zealand exporters. Likewise, since the original FTA was signed, e-commerce has grown in importance for bilateral trade. It is important that the regulations around e-commerce facilitate the expansion of this trade."

China is New Zealand's second-largest goods and services export market and its largest export destination for goods.

In the year ending June 2016, the value of New Zealand goods and services exports to China totalled NZ$12.2 billion ($8.56 billion).

Since the FTA, goods exports to China have quadrupled, reaching NZ$9.2 billion ($6.46 billion), and services exports have tripled to NZ$3 billion ($2.1 billion).