The Labour Party says John Key needs to assert the rights of Kiwi exporters when he meets Australian Prime Minister Tony Abbot this week as a vigorous "Buy Australia" campaign threatens their livelihoods.
Two major Australian supermarket chains, Coles and Woolworths, have decided to stop selling New Zealand goods, primarily vegetables, as they opt for an "Australian made" focus by solely contracting domestic suppliers.
Mr Key has expressed concern about the campaign and has said he would raise it with Mr Abbott on his three day visit to Australia, which begins today.
Labour's trade spokesman Phil Goff accused Australia of breaching its obligations under the Closer Economic Relations (CER) free trade agreement and said the campaign was a "fundamental threat" to New Zealand's exporters.
"With the two companies [Coles and Woolworths] having a retail share of 80 per cent of the Australian market this substantially stops New Zealand exporters from getting vegetables to the Australian consumer.
"That affects exports worth over $400 million a year and the implications for this spreading to other goods are hugely serious."
Mr Key must tell his Australian counterpart to end these actions, Mr Goff said.
"A soft approach by John Key isn't good enough. It is hypocrisy for the Australian Government to preach a single economic market and allow this situation to continue. It fundamentally undermines CER."
Mr Key departed for Australia today, along with a sizeable New Zealand delegation.
"The joint meeting of cabinet ministers is a good opportunity to set the agenda for the trans-Tasman relationship and allows ministers to engage directly with their counterparts on a range of issues and identify areas where we can build on our close relationship," Mr Key said in a statement.
"Their participation recognises the important role two-way trade and investment plays in the relationship between our countries and the integrated nature of our economies under the CER agreement."
The prime ministers are also expected to discuss possible measures to address concerns the Australian Government is too harsh in denying social funding to New Zealanders working and living in Australia, among other issues.