Merkel on board for EU trade deal

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Fred Chartrand / THE CANADIAN PRESS Prime Minister Stephen Harper and German Chancellor Angela Merkel answer questions on Parliament Hill Thursday. (CP)

OTTAWA -- Angela Merkel gave Stephen Harper what he wanted -- strong public support for a Canada-European Union trade deal -- but not before she gently but firmly noted "problems" with high carbon emissions from Alberta's oilsands.

Merkel's pointed observations about the need to reduce Canadian carbon emissions did not overshadow what was a genuinely warm 24-hour visit, spread over two days, in which a pair of like-minded politicians found much common ground.

But it did underscore the gap between Merkel and Harper on the key issue of the environment.

Merkel backed Harper's desire for a Canada-European Union pact by year's end, pledging to push for a "speedy conclusion" to the negotiations when she returns home. She's only one of 27 political leaders in the EU, but as its most powerful politician, her voice will be heard.

Harper and Merkel made it clear they won't play tit-for-tat when it comes to finding solutions to global economic woes, particularly in Europe.

They agreed a free-trade deal with the EU isn't dependent on Canada spending money to support a bailout by the International Monetary Fund. Canada's firm opposition to contributing to the fund had drawn the ire of some European leaders. But Merkel said it would be wrong to link the trade deal with the issues in the eurozone.

"Our experience is whenever we had trade agreements with other countries, that has given a boost to growth," said Merkel, who was making her first bilateral visit to Canada.

"We would actually be doing ourselves a very great disservice if we were thinking along those lines."

Canada estimates the comprehensive pact with Europe could boost the economy by $12 billion annually.

"We have the goal of having an ambitious agreement that will not only set a high standard for agreements between major economies going forward, but will also provide a signal to the global economy that major developed countries are able to move forward on the trade agenda," Harper said.

Merkel agreed, praising Harper's stewardship of the Canadian economy in the recent years of the recession.

"I think Canada is an example for how one can actually emerge from a crisis in a robust way," she said.

"You have a free trade system. You have a sound budgetary policy and you have quite strict rules as to the banking sector. If you look at the last economic crisis... Canada has weathered this quite well. So there's something we can learn."

When asked about her views on carbon emissions in Alberta's oilsands, Merkel chose her words carefully, but did not hold back.

She said she and Harper discussed the issue, including the EU's upcoming plan to adopt a fuel-quality directive.

Canada says the directive would unfairly label crude derived from oilsands as dirty oil and has lobbied hard for two years to block it. The European Commission is conducting an impact assessment before the matter comes to a vote next year, an assessment Merkel backed.

"We obviously think that we need to do everything we can to reduce CO2 emissions as best we can, but we are also familiar with the problems that are there with respect to the oilsands," said Merkel, a one-time environment minister and quantum chemist.

-- The Canadian Press

Germans jockey for contracts

OTTAWA -- A German defence consortium accompanying Chancellor Angela Merkel has its sights on Canada's plan to eventually replace its command destroyers and patrol frigates with a single class of modern warships, say a number of defence sources.

The head of ThyssenKrupp Marine Systems is one five German business tycoons who took part in Thursday's meeting with Canadian counterparts on Parliament Hill.

Government and industry insiders say Public Works will begin consulting with defence contractors this fall on the single-class ships.

According to defence insiders, ThyssenKrupp Marine is interested in getting in on the ground floor of the single-class design and the eventual installation of combat systems, such as radar, missiles and guns.

The consortium is also mentioned in federal briefing records as being a leading contender for the replacement of the navy's British-built submarines in a project that's anticipated after 2020.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 17, 2012 B4