TOKYO (AFP) - Japan and the European Union are to hold a summit this month to formally launch negotiations on a huge free trade deal, a report said on Sunday.

EU President Herman Van Rompuy and European Commission head Jose Manuel Barroso will visit Tokyo in the last week of March to meet Prime Minister Shinzo Abe, the Nikkei business daily reported.

The report said the two sides would reach a final accord to launch long-awaited negotiations aiming to liberalise trade and remove barriers on services and investment.

The EU and Japanese leaders also plan to begin separate talks on a "political accord" featuring cooperation on security, the environment and science and technology.

EU trade ministers agreed in November to launch free trade talks with Tokyo while pledging to safeguard Europe's struggling carmakers.

European car and car parts manufacturers fear the removal of tariffs will lead to a rise in Japanese car imports, pointing to a previous trade deal with South Korea that bumped up sales of South Korean vehicles in Europe.

EU trade ministers have pledged to safeguard struggling carmakers but auto companies have criticised the envisaged deal, with the European Automobile Manufacturers' Association calling it "a one-way street' for Japanese cars.