The European Union and the US will begin formal talks on a free-trade agreement, which will be the biggest trade deal in history.
European Commission President Jose Manuel Barroso made the announcement after President Barack Obama's State of the Union address.
According to the BBC, the US said that 'everything is on the table' in the talks.
If the deal is finalized, it would bring down trading barriers between the two biggest economies in the world.
Trade between the EU and the US is worth around 455 billion euros a year.
Speaking in Brussels, Barroso said that a future deal between the world's two most important economic powers will be a game-changer, giving a strong boost to both the countries economies.
The EU estimates that a 'comprehensive and ambitious agreement' will boost annual GDP growth by 0.5 percent.
According to the report, Obama, during his annual address to the US Congress, had announced the country's support for talks, saying a free-trade deal would 'boost American exports, support American jobs and level the playing field in the growing markets of Asia'.
One aim of the free-trade agreement would be to eliminate or reduce tariffs, taxes that apply to imported goods.
Beyond that, the negotiations would try to reduce regulatory barriers to trade. That is more complex, but the experience of Europe's internal market shows it is sometimes possible.
The US trade representative, Ron Kirk, said that even sensitive issues such as agricultural subsidies will be up for discussion.
EU Trade Commissioner Karel De Gucht told the BBC that free trade between the US and the EU had been under discussion for several years, and said he hoped talks would begin in the summer, the report said.
But he admitted that the negotiations would be 'difficult and complex'.
The EU says the deal will focus on bringing down remaining tariffs and other barriers to trade, and standardise technical regulations and certifications, it added. (ANI)