The free trade agreement signed between New Zealand and the ten-member Association of Southeast Asian Nations (ASEAN) has been warmly welcomed by New Zealand's largest dairy exporter, Fonterra.

The deal, which was signed today (2 March) in Thailand, was described as a "significant step" for New Zealand exporters, particularly the dairy industry.

Members of ASEAN, including Indonesia, Malaysia and Thailand, accounted for about 25% of Fonterra's exports last year, valued at NZ$2.2bn (US$1.09bn).

The agreement opens up markets with a total population of 566m.

"Dairy tariffs into our key ASEAN markets typically range up to 10%. This agreement will eliminate tariffs on almost all of our dairy trade into the region and the risk that trade barriers could be introduced in the future," Fonterra CEO Andrew Ferrier said.

"ASEAN should be applauded for the commitment they are making to free trade. In an environment where many countries have resorted to protectionist policies, ASEAN has had the foresight to see greater benefits in developing strong regional trade relations."

Fonterra said that the trade deal would allow the company to further grow its dairy supply in a prosperous region with "huge" potential for growth in demand.

The deal follows the signing of a similar deal with China last year and now means New Zealand will ultimately have tariff free dairy access to all of Southeast Asia and China.