Merkel heads to Vietnam, Mongolia to boost economic ties

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German Chancellor Angela Merkel will next week set off on a four-day trip to Vietnam and Mongolia in a bid to step up ties between Europe's top economy and the two fast-growing Asian countries.

Merkel will push for the conclusion of a free-trade accord between the EU and Vietnam and an agreement on precious "rare earth" raw materials with Mongolia, a German government source said on Friday.

She will be accompanied by business leaders who are eying up opportunities in the two Asian economies. Vietnam "has a very dynamic growth rate, which is of great interest to German firms," said the source.

Germany "is a very strong supporter" of a free-trade deal between Vietnam and the EU, the source said, noting also that the state there still plays a major role in the economy and that inflation is high.

Nevertheless, Merkel would also not shy away from tackling what the source described as a "deficit" in Vietnam's human rights record.

The European Union has frequently chided Vietnam for its record of upholding freedom of expression and in August called for the release of a French-Vietnamese blogger, who is an EU citizen.

Germany and Vietnam have long enjoyed close relations, stemming from the days before the fall of the Berlin Wall, when young Vietnamese came to study or work in the former communist east.

"Germany's interest in Vietnam is much greater than in the other countries in the region," the source said.

After her trip to Vietnam, Merkel will travel to Mongolia, the first German leader to do so.

German firms have said they are keen to conclude agreements on rare earths in Mongolia.

Rare earth elements are a collection of 17 substances that are not in fact rare but which are rarely found in quantities that make mining economically advantageous.

They are nonetheless critical for the manufacturing of items like iPods, low-emission cars, wind turbines and missiles.

© 2011 AFP

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