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AUSTRALIA has always loomed large on the horizon of New Zealand business, but lately it has come to dominate the view.
Should New Zealand businesses see Australia as an opportunity, the competition or their closest ally in trade?
With an economy 7 1/2 times the size of New Zealand's, a common language and common cultural ties, Australia has long been a vital springboard for Kiwi exporters ready to take on the world.
And now the proposed US-Australia Free Trade deal has raised the prospect that New Zealand could lose jobs and export dollars if business keen to target the gigantic US market relocated across the Tasman in Australia while increased US sales could provide funds for market research and production that would give ultra-competitive businesses like those in agriculture the edge on their Kiwi counterparts.
Others were more optimistic. "As long as the perception is that we're moving in. the same direction 1 think it's okay," Invest NZ's Sydney-based director John Crawford said. It's a question of how many investments will be made in that term."
The Australia-US deal may raise opportunities for Kiwi business, if goods and services diverted to that market leave gaps in domestic demand or elsewhere in the world.
Those producing components or raw materials that go into Australian products could benefit if they can limbo under the percentage of the product value allowed to be of non-Australian origin.
To some extent, that discussion was cast into the shade, by the commitment made by New Zealand Prime Minister Helen Clark and Australian leader John Howard to a single trans-Tasman market.
It is easy to see why business should support stripping the remaining barriers from access to the Australian economy.
A report by the New Zealand Institute of Economic Research last year conservatively estimated the benefits of moving to a borderless market at up to. $576 million, against costs of up to $128 million as some industries contract and the bureaucratic processes change.
But trans-Tasman co-operation has already been emerging in areas of business.
John Nicholson, Trade and Enterprise's Sydney-based regional manager for the Australia-Pacific region, said even in areas where the countries had traditionally competed strongly, such as the meat industry, there had been co-operation in jointly promoting Australia and New Zealand to third markets of late.
The timber and biotech industries were also increasingly forming trans-Tasman ties. "There is a growing realisation that by working together we can help each other in a number of sectors, he said. Australian Trade Commission chief economist Tim Harcourt downplayed talk that emerged last year suggesting some Australian businesses and parliamentarians had begun to see New Zealand as a competitor and not an ally.
"I would have thought people were motivated to make a quid. Diplomatic considerations don't come into it so much," he said.
New Zealand was the first jumping off point for many Australian companies and represented an important export market, particularly for manufacturing and services. There was evidence that the Closer Economic Relationship (CER) had helped nurture an export culture among small to medium sized' companies in both countries.
"There are a lot of cultural ties and there is a feeling that both countries are in a distant neighbourhood, both have to deal with," Mr Harcourt said.