German Chancellor Angela Merkel said in comments published yesterday the European Union and the United States should more closely harmonise their financial market regulations, patent laws and other economic mechanisms.
In an interview with the Financial Times before a trip to Washington, Ms Merkel outlined her goals for Germany's six-month rotating presidency of the European Union and its year-long presidency of the Group of Eight nations.
Ms Merkel said closer harmony between the 27-nation EU bloc and the United States would boost investment flows and trade.
"We have accumulated a certain expertise about single markets in Europe, which we can apply on the transatlantic level," she told the newspaper, according to an edited transcript of the interview published on the FT's website.
"With increasing globalisation, this can be a good basis for transatlantic cooperation."
Ms Merkel said she would touch on this topic during talks with US President George W. Bush in Washington this week.
"The EU and the US have sophisticated patent legislation. We have regulatory mechanisms governing our financial markets. We should be looking for ways to keep developing these together at a transatlantic level," she said.
"We must watch out that we do not drift apart, but instead come closer together, where there are clear advantages for both sides."
Germany's relationship with the United States cooled under previous Chancellor Gerhard Schroeder but has improved since Ms Merkel took over in 2005.
Ms Merkel dismissed concerns that countries such as China and Japan would regard a closer partnership between the United States and Europe as hostile.
"Building bulkheads against Asia would be quite senseless, and certainly not in our interest," she said.
"But no one can stop us from combining our efforts. Of course, if this works, it will make us stronger competitors. But this is certainly not about restricting trade in any way."
Ms Merkel said the development of the hedge fund sector would be discussed during Germany's presidency of the G8.
"The result does not have to be new legislation. It can be self-regulation or improved supervision," she said.
In the wide-ranging interview, Ms Merkel said she was hopeful a problem over a ban by Moscow of Polish meat imports would be solved, enabling talks between the EU and Russia on a new cooperation pact to begin.
"I am very optimistic that we will solve the problem of Polish meat exports to Russia. Then we can start the negotiations, although I am not saying they will be very easy."
Ms Merkel said Russia had the right to seek greater access to Western European markets but that European investors should be equally able to enter Russian markets.
"If obstacles are being erected to protect Russian companies from European investors, nobody should resent it if the Europeans take reciprocal action," she said.
Ms Merkel said no one should expect Germany's presidency to solve the problems in the EU over adopting a constitution but she aimed to develop a form of road map to move the process forward.