[A thread] Prior to 1973, NZ was heavily dependent on the UK market for almost all its exports of lamb, wool and butter. NZ farms effectively fed the growing population of London for generations. NZ was often referred to as London's farm. #auspol 1/13

This meant there was little incentive for NZ to diversify its industry. NZ also got good prices for its products and it was an efficient producer. In 1970 NZ had the highest per capita GDP in the world and the NZD was worth USD1.40. #auspol 2/13

In 1973 the UK joined the EEC, the forerunner to the EU, this committed it to buying lamb and butter from Europe (France in particular). NZ lost almost all its market overnight. In desperation at one stage, NZ even tried to join the EEC itself. #auspol 3/13

This has eerie similarity to Australia and its dependence on exports of iron ore, coal and wine to China. If China continues to boycott Australian products, Australia will find itself in the same situation as NZ in 1973. #auspol 4/13

The loss of the UK market triggered a severe decades long recession in NZ. It is only in the early 2000s that NZ truly recovered. This period of paucity on the back of a century of economic growth had profound effects. #auspol 5/13

NZ was forced to find new markets for its products. It sold lamb to Middle East (most NZ abattoirs - freezing works - are halal certified as a result). It sold its butter to Russia (the NZ Dairy Board became a Lada car importer in exchange for butter). #auspol 6/13

NZ also diversified its industry. If learned to farm other products with high value niche products such as Venison and Kiwifruit (a re-brand of "Chinese Gooseberries"). It also developed a knowledge based industry pioneering biotechnology, tourism and IT. #auspol 7/13

The IT industry has been a particular success with spin-offs into movie special effects - the world now beats a path to NZ's door for its CGI expertise built on the back of Xena Warrior Princess and Lord of the Rings franchises. #auspol 8/13

But perhaps most importantly, the recession affected how Kiwis interacted with each other. As a small country a long way from anywhere, Kiwis were heavily dependent on each other - they learned to look out for each other. There was more respectful political debate. #auspol 9/13

Culturally it became more progressive, more accepting and more "Team NZ" focused. Kiwis celebrated team victories. There was a resurgence in Maori culture, and NZ businesses developed a global perspective with long term strategies. #auspol 10/13

NZ also developed a more independent defence policy that saw it effectively dissolve ANZUS for years over US nuclear weapons. Its went toe to toe with the French over nuclear testing in French Polynesia. NZ now even launches its own rockets into orbit from Mahia. #auspol 11/13

There are lessons for Australia to learn from the NZ experience.... but does it have the capacity to do so? It would seem doubtful under the current Morrison regime - it is essentially reactive with little long-term thinking. #auspol 12/13

The degeneration of Australia's relationship with China could be a spark for its industry to diversify its product and service offerings and find new markets. I fear though that Australians lack the capacity to innovate the way Kiwis do. It could be a rough ride. #auspol 13/13