WELLINGTON (REUTERS) - Taiwan and New Zealand signed a free trade agreement on Wednesday, the first trade deal signed by Taiwan and a developed country.

Under the agreement which takes effect in January, Taiwan will abolish tariffs and quotas on New Zealand dairy exports by 2026, enabling the world's largest dairy exporting nation to ship more products to Taiwan.

Tariffs on New Zealand beef products, the country's No. 2 export to Taiwan, will be removed by 2016.

New Zealand will abolish tariffs on most industrial products, including machinery and vehicle parts, which is currently set at 5 per cent. It will also abolish a 5 per cent tariff placed on semiconductors, electronic components and plastic products.

The latest agreement was reached between Taiwan and the New Zealand Commerce and Industry Office, which conducted the negotiations on behalf of the government as it does not have diplomatic relations with Taiwan.

Taiwan is currently New Zealand's eighth largest export market, with shipments totalling NZ$850 million (S$860 million) in the year to May, out of total exports of NZ$46 billion.

Taiwan is set to sign a free trade agreement with Singapore soon.