Biden, Merkel stress friendship while agreeing to disagree on pipeline

3/3 © Reuters. FILE PHOTO: German Chancellor Angela Merkel attends the weekly cabinet meeting at the Chancellery in Berlin, Germany, July 14, 2021. REUTERS/Annegret Hilse/Pool 2/3

By Jeff Mason and Andrea Shalal

WASHINGTON (Reuters) -U.S. President Joe Biden and German Chancellor Angela Merkel agreed to disagree on Thursday about a Russian pipeline project that Washington opposes, while vowing to stand together against aggression from Moscow and anti-democratic action from Beijing.

At what is likely to be the German leader's final visit to the White House before she retires from politics, Biden praised Merkel's "exemplary life of groundbreaking service to Germany and ... to the world".

Transatlantic ties suffered under the tenure of former President Donald Trump, and both Merkel and Biden were eager to show the relationship was on the mend during their time together.

"I value the friendship," Merkel said in the Oval Office, mentioning America's role in building a free and democratic Germany after World War Two. Merkel is the first European leader to visit Biden at the White House since his inauguration in January.

Despite the cordiality, some disagreements were apparent. Biden reiterated his concerns about the Nord Stream 2 pipeline being built under the Baltic Sea from Russia to Germany; the United States fears Moscow will use it as a cudgel against Ukraine. The $11 billion project, which is expected to be finished in September, will bypass Ukraine, potentially depriving it of transit fees.

The president reiterated that he decided against sanctioning the company behind the pipeline because the project was near completion, a decision that drew criticism from Democrats and Republicans alike. But Biden said he and Merkel were united in their belief that Russia should not use energy as a geopolitical weapon.

"Good friends can disagree," he said about the pipeline during a joint news conference.

"We stand together and will continue to stand together to defend our eastern-flank allies at NATO against Russian aggression."

Merkel noted the differences of opinion but emphasized points of unity between the two countries. "We all share the same values; we all share the same determination to tackle the challenges of our times," she said.

Biden pledged to have a decision soon on whether to lift a pandemic-related ban on Europeans traveling to the United States that has irked Germany and other allies.

VIEWS ON CHINA

Washington and Berlin also have differing views on doing business with China, which Germany has wooed for trade.

"There is a lot of common understanding that China, in many

areas, is our competitor; that trade with China needs to rest on the assumption that we have a level playing field," Merkel said.

But both leaders said they would stand up for democratic principles and universal rights when they saw China or any other country working to undermine them.

"We are united, united in our commitment to addressing democratic backsliding, corruption, phony populism in the European Union or among candidates for the EU membership, or anywhere we find it in the world," Biden said.

Biden, 78, and Merkel, 66, do not have much time to strengthen ties between the world's largest and fourth-largest economies.

Merkel, chancellor since 2005, plans to exit Germany's government after national elections in September. Polling shows her Christian Democrats are poised to take the lead in forming a government after the election, but it remains unclear which parties would be included in a coalition.

Biden's Democratic Party has tenuous majorities in the U.S. Congress that could evaporate in the 2022 congressional elections.

John Emerson (NYSE:EMR), who served as ambassador to Germany under former President Barack Obama, said the relationship remains "indispensable" for Washington given Germany's role as the largest economy in Europe and a NATO ally, as well as its importance as a bridge builder in dealing with Russia, the Middle East and North Africa.

Germany hosts some 36,000 U.S. troops on its soil.

The White House feted Merkel after the working visit between the two leaders.

She and her husband attended a dinner hosted by the Bidens with guests that included U.S. lawmakers, former secretaries of state Colin Powell and Hillary Clinton and the Republican leaders of the U.S. House of Representatives and Senate.

The White House said the menu included grilled peaches, crispy sea bass, and vanilla ice cream.