Sarkozy, Harper and European Commission President Jose Manuel Barroso met to discuss the continued turmoil on international money markets and the problems that it is creating for economies around the world.

"I have always been a great friend of Canada," the French president said, adding there is no place for division now.

Meanwhile, Harper said Canada and France are partners. There aren't tensions between the two countries, he said, but a spirit of co-operation as they work together to help resolve global economic problems.

Harper said the three leaders agreed that closer economic co-operation is becoming more important than ever. From Canada's point of view, he said, the stakes are high, with a recent Canada-EU joint study indicating that liberalized trade in goods and services has the potential to boost Canada's economy by $12 billion within seven years of its implementation.

"Canada and the EU will prepare formal mandates with a view to launching negotiations on an economic partnership as soon as possible in 2009," Harper said. The PM said he will consult with provincial and territorial leaders as discussions move forward.

Harper and Sarkozy both spoke of the need to convene an international summit as quickly as possible to find ways to tackle the global economic crisis, with the French president saying he hopes it can be held as early as November.

Sarkozy also suggested the summit should be broadened to include not only the G8 but also China and India, two of the world's fastest growing economies.

Sarkozy and Harper both said they favoured the elimination of trade barriers as a means of improving economic opportunities.

The global economy is in trouble, Harper said, and Canada and Europe need to co-operate to work their way through the problems together.

Sarkozy thanked Harper for chairing Friday's meeting in Quebec City, noting that Canada and France share the same views about getting rid of protectionism as a way of dealing with the crisis.

Harper said Canada and Europe are members of an inter-dependent global economy that is facing a serious slowdown, and together they will help define an economic partnership agreement.

In a newspaper interview on the eve of the Quebec City summit, Sarkozy spoke of the "unique, fraternal relationship (that) exists between France and Quebec," adding "this does not exclude the profound friendship that exists between France and Canada.

"For too long, we've entertained this idea that we have to choose between one or the other, that honoring one was betraying the other," Sarkozy told Quebec newspaper La Presse.

"It's quite the contrary. The special ties that bind France and Quebec are an opportunity, a great asset, for strengthening Franco-Canadian relations."

By Geoff Matthews, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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