"I think the answer is yes," he responded. "We already do a bit of stuff together ... one of the reasons it can work is because for a lot of countries, actually doing these negotiations ties up a lot of time.
"My view is, the issue isn't whether Australia beats New Zealand or New Zealand beats Australia, it is about whether Australasia can have a bigger share of the world.
"I think the issue there is sometimes we have different interests ... but I think there are more things we can do together."
Before the question and answer session, Mr Key used his speech to call for the establishment of an elite agricultural university in Australasia.
He said he did not want his comments to be taken as a dig against existing institutions, but the idea had merit.
"I've kind of long held the view that somewhere along the line we should be having between Australia and New Zealand the kind of Harvard of agriculture. I mean we are just the best in the world at producing this stuff.
"I just can't see why we wouldn't want to attract the very best brains, the very best research, the very best technology, the very best young people from around the world, basically studying at the university of choice."
Mr Key said his son Max, 20, had asked whether it would be worthwhile attending Harvard to study towards an MBA.
"And I go, yeah, mate, at some point you should. If you want to go, we'll pay. Why? Because you are paying a lot of money but you are sort of guaranteeing a CV that at some point looks pretty good.
"I'm not taking away from the universities, I'm just simply saying if you had the most elite university for agriculture in the world in Australasia, it is hard to believe that people from Ireland, and Europe and the rest of the world wouldn't come."
