New Zealand's stature in Australia's foreign investment picture - and, possibly, the level of investment from its own major sources - may be affected by a series of bilateral trade agreements either already completed or under way.
Although the Closer Economic Relations pact is consistently lauded as one of the
world's most open and successful free trade agreements, it does not include investment and New Zealand proposals are still subject to Foreign Investment Review Board scrutiny and approval.
Australia says this does not disadvantage New Zealand, with FIRB noting in its annual report that there are no practical impediments to transtasman investment and ongoing flows of new investment remain high.
But Australia's new free trade agreement with its major investor, the US, includes significant investment provisions, exempting the finance sector from the Foreign Acquisitions and Takeovers Act, and setting CPI-indexed screening thresholds of A$800 million ($870 million) on acquisitions in other areas.
Exceptions are made for sensitive sectors, lowering the threshold to A$50 million for media, telecommunications, transport and defence acquisitions.
Wellington, which has failed to get to the negotiating table with Washington, has expressed concern that generous investment provisions will lure capital away from the New Zealand economy and further increase US interest in Australia, where American holdings in December 2003 totalled A$70.9 billion.
Other bilateral agreements with Singapore and Thailand do not include similar investment concessions but are designed to increase the level of interest in the Australian economy.
And the biggest card on the table at present is the agreement being negotiated with China, Australia's fastest-growing trade and investment partner.
