They are our greatest rivals – and our closest friends – and one thing transcends all the disputed territory (pavlova, Crowded House, Phar Lap, Russell Crowe, the Bledisoloe Cup): the Australian-New Zealand trade corridor.
In 2017, two-way trade amounted to NZ$24.64 billion. In 2019 that figure rose to NZ$27.09 billion – a 9.9 per cent increase in just 2 years, according to Stats NZ – and a trend that looks set to continue year on year, as it has done for the last 40.
When it comes to doing business, the two countries' economic and trading relationship is recognised as one of the closest and most compatible in the world – a closeness reflected in the world of commercial banking. HSBC's teams on either side of the Tasman are fully geared up to support companies looking to strengthen their business through the important Australia-New Zealand corridor.
Much of the reason for this highly beneficial commercial relationship is the two countries' free trade agreement, known as CER (Closer Economic Relations), which first came into force in January 1983.
Under CER, all trade tariffs and quotas between the two countries were eliminated and common rules for food standards introduced. Most services can be traded across the Tasman free of restriction; goods that can be legally sold over here can also be legally sold over there and vice versa.
In addition, New Zealand and Australia have committed to a process called the Single Economic Market (SEM), designed to lower business costs further, open up new opportunities to trade and create a seamless transtasman business environment.
"The barriers are well and truly down," says Monique Dalton, HSBC NZ's Head of Global Trade and Receivables Finance. "To us, transtasman feels more like a domestic corridor.
We work closely with our team in Australia to offer bespoke solutions for our clients and, with transactions between the two countries treated almost as local, given the current climate we're a no-brainer for businesses looking to keep their costs to a minimum."
CER has proved a resounding success. Since 1983, trade between New Zealand and Australia has increased steadily to NZ$27.09 billion as at March 2019, amounting to over 16 per cent of New Zealand's total trade.
For New Zealand, this makes Australia the country's second most important trading partner just behind China (NZ$30 billion), while New Zealand itself is Australia's sixth most important – ahead of the UK. Last year, Australia also maintained its position as New Zealand's number one services trading partner by a significant margin, according to Austrade's official figures.
The potential for Kiwi businesses looking to expand into Australia is clear: Australia's economy has grown by 26 per cent in the last 10 years and recently completed 28 years of continuous growth – no mean feat considering the global financial crisis.
What's more, last year saw 12 out of 19 major industry sectors in Australia expand by at least 3 per cent, according to Austrade, with technology, financial services and health care the leading lights. Add to this the International Monetary Fund's prediction that the Australian economy will continue to grow faster than that of any other G7 country (except the US) over the next two years, and you begin to see the bigger picture.
As a full service international bank in New Zealand, HSBC is perfectly poised to help Kiwi businesses capitalise both domestically and inbound from overseas. In the last two years the bank has significantly built upon its transtasman capabilities, as exemplified by its central technology platform, HSBCnet, that provides clients with a single consolidated interface to manage liquidity, trade and supply chain needs. In short, a seamless process for trade both ways.
The bank's huge global presence and in-country banking expertise provides a real competitive advantage for those with grander plans.
Customers also benefit from access to all the resources of the HSBC Group, through a trusted New Zealand-based relationship manager who provides in-depth, dedicated coverage across everything from funding and supply chain management to corporate investment and payroll solutions.
With many companies in New Zealand also operating in Australia – and vice versa – the business opportunities of teaming up with a renowned global banking partner are clear.
That's something Kiwis and Australians can agree upon.
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