Wellington - New Zealand and Malaysia are to resume negotiations on a free trade pact, which were suspended in deadlock two and a half years ago, Prime Minister Helen Clark said Monday.

She told a press conference that her cabinet approved the resumption of talks after a boom in trade between the countries.

The latest New Zealand figures showed that Malaysia was New Zealand's ninth-biggest market in the 12 months through July with exports increasing by 50 per cent on the previous year to 876 million New Zealand dollars (596 million US dollars).

New Zealand's imports from Malaysia doubled in the previous 12 months to 1.83 billion New Zealand dollars.

Clark said negotiations that began in March 2005 were "long and hard" before they were suspended 13 months later "because we had run into a range of issues and also Malaysia was negotiating with the US at that time and it was giving some priority to that as I recall."

She made it clear that New Zealand, which this year became the first developed country to sign a free trade pact with China, would be seeking to strike a hard bargain with Malaysia.

Clark said the deal signed with China was "more comprehensive and far-reaching" than a free trade pact that New Zealand and Australia recently completed with the 
10-member Association of South-East Asian Nations (ASEAN), of which Malaysia is a member.

"It would be expected that if you could reach conclusion on the Malaysian one, it would be likely to be more comprehensive than the ASEAN one," she said.

Indonesia, Vietnam and the Philippines, all big importers of New Zealand milk products and meat, held up final agreement on the ASEAN pact. New Zealand's biggest export to Malaysia is milk powder.

China also fought to maintain duties on New Zealand milk products to protect its dairy industry, but Clark's negotiators insisted on a final phase-out date, even though they conceded a long period of transition.

"We always go into these negotiations looking for the elimination over time of tariffs on our goods, and we look for as broad an agreement as we can," Clark said. (dpa)