EU-US trade ties high on German presidency agenda

"At the forthcoming EU-US summit we want to talk about ever-closer economic co-operation. Our economic systems are based on the same values," she said ahead of a meeting with US president George W. Bush scheduled on Thursday.

Ms Merkel indicated that closer ties with Washington should be forged through regulatory co-ordination in concrete areas such as patents and financial markets.

"For example, it causes unnecessary friction for patent rules in the US to be structured differently from those in the EU," 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."

The German leader argued that closer ties between Brussels and Washington are necessary in the face of growing competition from Asia and Latin America - but she added that "this partnership is not directed against anyone."

Free trade zone

Regulatory convergence across the Atlantic is seen by some circles in Ms Merkel's Christian Democratic party as the first step towards the more ambitious goal of a transatlantic free trade zone – possibly by 2015.

Ms Merkel said however "I do not want to mention a specific date. But we have accumulated a certain expertise about single markets in Europe, which we can apply on the transatlantic level."

The idea of a free trade zone has also been mooted by other EU leaders, with Denmark's prime minister last June suggesting the creation of a "transatlantic marketplace without barriers to trade and investment."

Spain's last prime minister Jose Maria Aznar, a conservative, also called for a free trade zone in 2004 but these ideas were not taken up concretely on an EU-wide level.

Constitution, Russia

Meanwhile, Ms Merkel's fresh transatlantic drive adds up to an already full agenda of the German EU presidency which sees the revival of the EU constitution and improving relations with Russia as key priorities.

In the Financial Times interview, she reiterated that Berlin rejects a "minimalist position" on the shelved EU constitution, reacting to ideas by French presidential hopeful Nicolas Sarkozy to have the constitutional text replaced by a "mini treaty."

On Russia, she denied divisions within the German government on how tough a stance to take towards Moscow on human rights, amid reports that she is in favour of stronger criticism than her foreign minister Frank-Walter Steinmeier.

But she expressed "concern" about press freedom and the situation of non-governmental organisations in Russia.