UPDATE 1-Canada, EU finalize trade deal text; 2016 implementation eyed

Tue Aug 5, 2014 4:49pm EDT

(Recasts with government confirmation; adds timeline, details on talks)

OTTAWA Aug 5 (Reuters) - Canada and the European Union have finalized the text of a proposed free trade deal after months of disagreements, but implementation is still about two years away, Canadian officials said on Tuesday.

The two sides initialized a deal in principle last October, but the talks then ran into trouble over issues ranging from financial services and investor protections to how beef and cheese quotas are shared out.

The deal would make Canada the world's only major economy with preferential access to the world's two largest economies, the EU and the United States.

For Europe, the accord is meant to be a template for its trade negotiations with the United States, which would encompass a third of world trade and almost half the global economy.

A Canadian government official, briefing reporters on condition of anonymity, said the final outstanding issues were technical in nature and did not require leaders to go back to the negotiating table.

Provisions for resolving investor-state disputes were settled several months ago, the official said. Germany said last week it has not yet decided whether to agree to the draft amid concerns over the provisions.

Issues around financial services, such as ensuring governments have flexibility to take steps when a bank is in trouble, were among the last to be settled.

The draft text of the treaty will now undergo a legal review and translation, before it is sent to Canada's 10 provinces and the EU's 28 member states for their comments and final ratification. That process looks to wrap up around mid-2016, the Canadian official said.

Canadian International Trade Minister Ed Fast and Prime Minister Stephen Harper will lead a trade mission early next month to the United Kingdom, the Trade Ministry added in a statement.

Canada and the European Union are also making preparations for a summit next month in Canada, it said. (Reporting by David Ljunggren in Ottawa and Rod Nickel in Winnipeg, editing by G Crosse)

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