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Merkel touches down in Canada for bilateral visit

German Chancellor Angela Merkel has touched down in Canada for her first-ever bilateral visit. The trip is marred by eurozone debt woes and Canada's refusal to prop up European banks.

Canada's Prime Minister Stephen Harper (L) talks with Germany's Chancellor Angela Merkel at Harrington Lake, Harper's official country retreat, in Gatineau Park, Quebec August 15, 2012. Merkel is on an official visit to Canada from August 15-16. REUTERS/Chris Wattie (CANADA - Tags: POLITICS)

Merkel in Kanada

German Chancellor Angela Merkel arrived on Canadian soil late Wednesday (local time) for her first bilateral visit to Canada.

She was greeted at the airport by the country's Foreign Affairs Minister John Baird and was immediately whisked off to a private informal dinner with Prime Minister Stephen Harper (pictured left above).

Merkel arrived with five economists who will attend talks with counterparts from five Canadian firms during a business luncheon on Thursday. Their meeting is expected to focus on the debt crisis and efforts to reach an EU-Canada free trade pact.

Germany and Canada are both members of NATO as well as the G8 and the two nations traditionally have a close ties. "The two leaders have a close, trusting relationship," a senior Merkel aide said.

Debt woes

The two countries remain divided though on how best to tackle the eurozone debt crisis.

Germany has loaned money to struggling countries within the eurozone. Canada, along with the United States, are the only G8 member states to not contribute to the International Monetary Fund bailout pool.

Prior to Merkel's visit, Canadian Finance Minister Jim Flaherty said the country would not review its decision not to contribute to the fund to help ailing EU countries, namely Greece, Spain and Italy.

"It is not necessary for Canada to use Canadian resources to help solve the European problem, given that the European countries are among the wealthiest in the world," he told reporters.

"Not enough has been done. They need to do more."

"Continuing economic headwinds from outside the country could easily throw us off course," said Flaherty, alluding to Europe's debt crisis.

Trade relations

Germany ranks as Canada's eighth-largest export market.

Thursday's talks between Merkel and Harper are hoped to grow bilateral trade through a Canada-EU free trade pact scheduled to be finalized at the end of the year.

Discussions are also expected to center around several stumbling blocks, especially intellectual property, public procurement and aspects of the services sector.

Canada has also raised concerns about the restrictions such an agreement would have on their ability to extend preference to local suppliers.

Securing a pact with the 27-nation union would be the second-largest free trade agreement for Canada after a 1994 agreement with the United States.

jlw/mz, ipj (AFP, Reuters, dpa)