The European Union and the United States announced they're launching talks on a free-trade agreement, which if hammered out, would become the biggest bilateral trade deal ever negotiated.

"A future deal between the world's two most important economic powers will be a game-changer," boasted Jose Manuel Barroso, president of the European Commission, during a press conference in Brussels on Wednesday.  

Trade between the EU and the US is worth some $613 billion a year. A free-trade deal will be aimed at bringing down the barriers between the two and reducing import taxes in particular. The current average tariff stands at 4% and a further reduction could mean additional trade volume. Getting rid of approval processes that businesses have to go through in order to sell products on both sides of the Atlantic, can help create new jobs on both sides.

"It will be a comprehensive agreement going beyond tariffs by integrating markets and removing barriers. It is estimated that when this agreement is up and running the European economy will get a stimulus of half a per cent of our GDP which translates into tens of billions of Euros every year and tens of thousands of new jobs," Mr. Barroso added.

US President Barack Obama hailed the talks in his annual address to Congress on Tuesday, saying a free-trade deal would "boost American exports, support American jobs and level the playing field in the growing markets of Asia".

EU Trade Commissioner Karel De De Gucht said De Gucht said initial talks should start by summer. 

"Ideally, we'd like to complete this work in about two years if possible before the end of the mandate of this commission, but more paramount than speed is achieving an ambitious deal," De Gucht said.  

The negotiations will cover a huge array of commercial and agricultural areas, however, some areas of trade are likely to remain outside the negotiations. Genetically modified food and raw meat fromhormone-treated cattle could be a stumbling block as the European Union isn't likely to allow these imports within its zone. 

The idea of a transatlantic free trade deal has been under discussion for years and was finally shaped following the formation of a working group in 2011.

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