SYDNEY - German Chancellor Angela Merkel said on Monday that China's free trade agreement (FTA) with Australia has become a shining example for European nations to pursue similar trade deals.

Speaking in Sydney after attending the G20 leaders' summit in Brisbane over the weekend, Merkel highlighted Australia's recent trade agreements with China, South Korea and Japan.

She said these events triggered Germany and other European nations to speed up their own trade deals.

"If I look at the long drawn out and arduous process on the negotiations of the Trans-Atlantic trade agreement, looking at what you're doing here encourages me to speed this up, because otherwise we will be cut off from developments in the rest of the world," Merkel said.

Merkel also said climate change had "devastating consequences for all of us" and all countries should reveal their greenhouse emission reduction targets in the first quarter of 2015.

"Climate change is no borders. It will not stop before the Pacific islands and the whole of the international community here has to shoulder a responsibility to bring about a sustainable development," Merkel said.

The European Union last month agreed on a target to cut greenhouse gas emissions by at least 40 percent of 1990 levels by 2030, however the German government conceded it would fall short of its own target to slice 1990-level emissions by 40 percent by 2020, saying that a 33 percent reduction was more likely.

Merkel addressed many issues including the civil war in eastern Ukraine, "the terrible disease" of Ebola, and China's rise that was "peaceful and without any ruptures".

Following her Sydney speech, Merkel attended a German- Australian business function where she met representatives from German companies, such as SAP, Airbus and Siemens.

In an effort to boost Australia-Germany trade, Australian Prime Minister Tony Abbott and Merkel have established a joint working group to foster a deeper relationship and see how the two nations could cooperate in the Indo-Pacific region.

In the 2012/13 financial year, Germany was Australia's 10th- largest merchandise trading partner, with trade topping 13 billion U.S. dollars. Of that figure though, $11 billion was for imports. For the same period, Australia's investment in Germany was valued at nearly $49 billion.

There are more than 700 German-owned businesses and subsidiaries operating in Australia, in the automotive, advanced manufacturing and clean energy sectors.