The European Union and the US have decided to launch negotiations on a transatlantic trade and investment partnership, which will create the world's largest free trade zone.
The two sides have initiated the procedures to start the negotiations after several failed attempts earlier with the aim of working out a "ground-breaking free trade agreement in trade and investment partnership" across the Atlantic, European Commission President Jose Manuel Barroso said.
"It will be biggest bilateral trade deal ever negotiated," he told a news conference in Brussels on Wednesday.
Barroso made the announcement shortly after US President Barack Obama expressed his support for a EU-US free trade agreement in his state of the union address to Congress on Tuesday.
The President said a transatlantic FTA would ‘boost American exports, support American jobs and level the playing field in the growing markets of Asia’.
"The future deal between the world's two most important economies will be a game-changer," Barroso said, adding "Together, we will form the largest free trade zone in the world."
The negotiations on a EU-US FTA will set the standards not only for the future transatlantic trade and investment, including regulatory issues, but also for the development of global trade rules, according to the commission president.
The proposed free trade deal will give a strong boost to the economies on both sides of the Atlantic, which are struggling with slow growth, high unemployment and high levels of debt.
"It will be a comprehensive agreement going beyond tariffs, internal markets and barriers," Barroso said.
In a joint statement issued simultaneously in Washington and in Brussels, President Obama, Barroso and European council President Herman Van Rompuy said that a free trade agreement between the EU and the US will not only expand trade and investment across the Atlantic, but will also contribute ‘to the development of global rules that can strengthen the multilateral trading system’.
"It is estimated that when the agreement is up and running, the European economy will get a stimulus of 0.5 per cent of the GDP, which translates into tens of billions of euros of income every year and tens of thousands of new jobs every year, Barroso said.
The exchange of goods and services between the EU and the US is estimated to be more than 450 billion euros a year.