John Key

By Kate Chapman of NZPA

Seoul, Korea July 5 NZPA - Trade will be top of the agenda when Prime Minister John Key meets with President Lee Myung-bak and Prime Minister Chung Un-chan in Korea later today.

Mr Key said talks over a free trade agreement (FTA) between the two countries had largely stalled since they were launched last year.

The Koreans were concerned about the influence of the New Zealand agriculture sector on domestic producers.

Competition for domestic Korean beef was likely to be a sticking point.

However, Mr Key believed New Zealand would be competing with other exporters to Korea not the domestic producers.

The European Union, United States and Australia were negotiating their own FTAs with Korea and New Zealand needed to get in first, he said.

"The reality for us is if they do complete a deal and we don't we're in a relatively worse position,"

Korea is New Zealand's second largest market, worth about $2.6 billion in two-way trade annually.

Mr Key arrived in Seoul yesterday. He will spend two more days in Korea before travelling to China and Vietnam.

Yesterday, after his official welcome, Mr Key toured the demilitarised zone -- the four kilometres separating North and South Korea -- and was briefed on security on the Korean Peninsula.

Today the focus will shift to trade when he meets with Mr Lee and Mr Chung following a wreath laying ceremony at the War Memorial.