Australia targets NZ weaknesses

The knowledge wave offers transtasman opportunities, says GREG ANSLEY in Canberra.

Australia intends catching New Zealand's knowledge wave, targeting key areas of new and emerging technologies in a renewed transtasman drive on the eve of the 20th anniversary of the Closer Economic Relations agreement.

Already running a healthy A$2.5 billion ($3 billion) trade surplus with New Zealand, Canberra believes its companies can capitalise on the weaknesses of what officials regard as an economy overly dependent on agriculture and short of skills and investment.

The latest Trade Outlook and Objectives Statement - Australia's annual statement of trade policy - adds weight to Finance Minister Michael Cullen's confidence in a new bout of life for CER negotiations after his recent transtasman talks.

The statement said a range of tangible improvements had been made last year, including the open skies agreement, progress in cooperation on regulation, science, technology and innovation, and proposals for a joint attack on world plantation softwood markets.

This year's programme includes "triangular" taxation, further coordination of business law and the continued development of a joint therapeutic goods regulatory agency, similar to the Australia New Zealand Food Authority.

For corporate Australia, trade policymakers have identified new potential in what is the nation's fifth-largest export market.

Last year, sales to New Zealand increased from A$6.6 billion to A$7.2 billion.

Imports from New Zealand last year rose 5.7 per cent to A$4.7 billion.

Canberra believes Wellington's emphasis on new and emerging technologies offers even greater potential for its companies through investment, strategic alliances, and bigger sales of goods and services.

The trade statement points out that more than 60 per cent of New Zealand's merchandise exports are in agricultural and forest products, and dairying alone is responsible for 20 per cent of exports and 8 per cent of GDP.

That heavy reliance on farming, it says, together with a lack of investment and a shortage of skills, had kept the nation below other OECD growth levels and widened the economic gap with Australia.

More than half of Australia's merchandise exports to New Zealand are elaborately transformed manufactures, including computer parts, electrical machinery and appliances.

Even against tough international competition in information and communications technology, Canberra believes New Zealand's push to boost its high-tech capabilities could open new doors to Australian companies.

The statement says there are also opportunities for partnerships and strategic alliances in biotechnology, especially in the agricultural, human and animal biomedical, bioequipment and related service sectors.

It points to the Government's knowledge wave priorities and its approval last year of field trials of genetically modified crops, a decision which Australian policymakers believe will have important flow-ons for foreign investment and research and development in New Zealand.

Potential growth is identified in a wide range of specialist areas in 0 infrastructure projects in the Auckland region, from power stations to motorways and wastewater construction projects.

Other areas include a buoyant New Zealand building and construction sector, urban capital investment flowing from a good year for farmers and agribusiness, the country's A$9 billion food and beverage industry, and the food service and hospitality sector.

These sectors will be targeted in May and June by major grocery and "taste of Australia" promotions.

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