US president Barack Obama and European Union leaders will promise to remove all tariffs on bilateral trade at their summit on March 26th, an ambitious step towards the world's largest free-trade deal, according to a draft statement seen by Reuters.

The joint declaration seeks to overcome tensions following Washington’s offer to cut its duties by less than the Europeans had hoped for and after Brussels pledged to remove almost all of its own tariffs.

"The EU and the United States are firmly committed to concluding a comprehensive and ambitious Transatlantic Trade and Investment Partnership," the draft statement reads, referring to US-EU free-trade talks by their official name.

“Those goals include eliminating all duties on bilateral goods trade,” says the statement, which will be delivered at the end of the day-long summit in Brussels.

Tariffs between the United States and the European Union are already low, and Brussels and Washington see the greatest economic benefits of a transatlantic accord coming from dropping barriers to business.

But in a marketplace of 815 million people, all moves to lower the cost of trade are seen as beneficial for companies, particularly automakers such as Ford, General Motors and Volkswagen, with US and European plants.

EU cars imported into the United States are charged a 2 per cent duty, while the EU sets a 10 per cent duty on US cars. Including even higher duties for trucks and commercial vans, the burden for automakers amounts to about $1 billion every year. (Reuters)