BRUSSELS (Bloomberg) -- The European Union and Canada are poised to cap the end of five years of negotiations on a free-trade accord which may see a gradual phase out of some automotive levies between the two parties.
Both sides are due to hold a summit on Friday in Ottowa, hosted by the Canadian Prime Minister Stephen Harper.
The draft agreement on a free-trade accord, the EU's most ambitious commercial pact to date, will then go through about nine months of legal checks before being put to the bloc's 28 national governments and the European parliament for final approval.
Each side will phase out some automotive levies over seven years, while Canada will do the same for "a few" ship-related duties over the same period, according to the European Commission, the EU's executive arm.
In the area of industrial tariffs, more than 99 percent will be scrapped by the EU and Canada from the pact's entry into force, says the Commission.
The deal, projected to take effect in 2016, would end 98 percent of tariffs on EU-Canada goods trade from the outset and 99 percent after seven years. Each side would dismantle all industrial tariffs and more than 90 percent of agricultural duties. Markets for services and public procurement would also be opened under the pact, the EU's first with a fellow member of the Group of Seven leading industrialized nations.
This "is a new generation agreement that will create more opportunities for our businesses, who will receive the same treatment on both sides of the Atlantic, and generate more job opportunities," Jose Barroso, president of the Commission, said in a statement on Wednesday in Brussels. "This is no small achievement between two G-7 members."
The EU is seeking to build on the draft trade agreement with Canada to push for a bigger market-opening pact with the U.S., a step that would expand what is already the world's largest economic relationship. By contrast, Canada is the EU's 12th most-important trade partner.
EU-Canada trade in merchandise was worth 58.9 billion euros ($75.4 billion) in 2013, while services commerce totaled 26.2 billion euros, according to the Commission. The market-opening accord may boost bilateral trade in goods and services by 23 percent, according to the EU.