OTTAWA — German Chancellor Angela Merkel will make her first bilateral visit to Canada on Wednesday and Thursday for talks with Prime Minister Stephen Harper, as Canada and the EU barrel toward a free trade pact.
"It is the thorniest of all trade deals with the EU," a source close to Merkel said, speaking on condition of anonymity. Started in 2009, the two sides aim to wrap up free trade negotiations by year's end.
The German official said the biggest stumbling blocks in the talks involve intellectual property, public procurement and aspects of the services sector.
"These are areas where Canada has got to budge and I imagine Merkel will mention them," the aide said.
Merkel's host, Harper, appears ready for the discussion. "As Canada and the European Union work to conclude free trade negotiations, I look forward to a wide-ranging discussion with Chancellor Merkel on the challenges facing the global economy," he said in a statement announcing the visit.
As for procurement, it is mostly Canada's provinces and municipalities that have expressed concerns about losing their ability to promote local economies by giving preference to local suppliers.
A deal with the 27-nation EU would be Canada's second-largest free trade pact, after the 1994 North American Free Trade Agreement with the United States and Mexico, and the first to include access to municipal procurements.
Environmentalists, farmers, auto workers and others have also rallied against the deal.
Harper is the second-longest serving leader of the G8 countries, after Merkel.
The chancellor was last in Canada to attend the June 2010 G8 Muskoka and G20 Toronto summits. According to one of her senior aides, Merkel and Harper "speak on the phone regularly and have a close, trusting relationship."
However Canada and Germany are split on how to tackle the European debt crisis. Their respective positions are "not as close as they could be," said Georg Juergens, deputy ambassador at the German embassy in Ottawa.
But most agree that Merkel is unlikely to sway Harper during this trip.
Frederic Merand, a politics professor at the University of Montreal, affirmed that while Germany and Canada may look alike in that their economies rely largely on trade and their respective banks weathered the financial crisis better than most, they are far apart on ways to solve Europe's debt woes.
While Germany has been relied upon to backstop struggling eurozone nations, Canada and the United States were the only G8 nations to not contribute to a bailout fund through the International Monetary Fund. Merand also noted that Ottawa was the most vocally opposed.
Germany may wish Ottawa to do more.
But Merkel herself is also facing internal dissent and mounting pressure to take a harder line against struggling Greece, Spain and Italy as the debt crisis enters a dangerous new phase, Merand said.
"Every country must simply decide for itself" whether it chooses to contribute, a German government source told AFP.
In terms of trade, Germany is Canada's eighth-largest export market and ranks fifth among Canada's suppliers. Bilateral trade has grown significantly over the past decade with imports from Germany rising to Can$12.8 billion in 2011 and Canadian exports reaching Can$4.0 billion last year, according Canadian trade figures.
Certain to be discussed by the leaders over dinner Wednesday evening are Canada's raw materials, including vast natural gas and oil reserves, as well as Syria, Afghanistan and Iran.
Following a press conference and a luncheon on Thursday with a delegation of German businessmen accompanying Merkel, the chancellor will travel to Halifax in easternmost Canada to discuss oceanography with scientists at Dalhousie University's Marine Research Institute.
"Chancellor Merkel is a scientist... and she finds refreshing from time to time to talk a little bit and to be amongst scientists," said Juergens.
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