A population of four million people isn’t a very big city by international standards and makes us a very small country.
When we’re so small we need good mates, and no relationship is more important for New Zealand than that with our closest and biggest neighbour, Australia.
The joint statement from Prime Ministers John Key and Kevin Rudd commits to strengthening trans-Tasman economic integration; streamlining travel and trade between the two countries,;co-operation between our Productivity Commissions,;collaboration on the design, implementation and a linking of emissions trading schemes; and continuing very close defence relationships.
Both countries have a lot to gain from all of these but I am not convinced we should go as far as a common currency.
Using euros in several countries makes travelling in Europe much easier for tourists. But locals gave us the impression that the countries with stronger currencies had benefitted more and those with weaker ones had found it costlier. If that is so it might not be as good for us as Australia.
(That is based on anecdote, you’ll get a more scientific analysis at The Visible Hand where Matt Nolan has the pros and cons of a common currency).
While holding hands across the Tasman has benefits for both of us, the sporting rivalry will always remain. Both Prime Ministers have an extra reason to hope their team wins the rugby tomorrow because they’ve agreed the one whose team loses will wear the other team’s tie on Monday.