The United States and the European Union agreed on Wednesday to push for the launch by the end of June of talks to create the world's biggest free trade alliance, which could be a benchmark for global competitors to follow.
Such a deal would be most ambitious attempted since the founding of the World Trade Organisation (WTO) in 1995, encompassing half the world's economic output and a third of global trade flows.
"These negotiations will set a standard, not only for our future bilateral trade and investment, including regulatory issues, but also for the development of global trade rules," European Commission President Jose Manuel Barroso told a news conference.
Speaking after the release of a joint U.S./EU report recommending the start of talks, Barroso said the two were expected to launch negotiations in the first half of the year.
The report sees a deal boosting the EU's economy by around 0.5 percent and the U.S. economy by around 0.4 percent by 2027, with 86 billion euros ($115.80 billion) of added annual income for the former and 65 billion euros for the latter.
The report's release comes a day after U.S. President Barack Obama threw his weight behind a potential deal in his state of the union address, saying it would support millions of good-paying American jobs.
Jobs and growth provide the rationale for an alliance, given both economies are struggling to break free from almost five years of downturns and stunted recovery as well as rising competition from China and other emerging economies.
EU Trade Commissioner Karel De Gucht has warned that the talks will be tough, with no "low-hanging fruit". Import tariffs between the two are already low - at an average of 4 percent.
Negotiations will focus on harmonizing standards, from car seat belts to household cleaning products, and regulations governing services.
Ideally, De Gucht said, the negotiations should be wrapped up in two years.
Before talks can start, the U.S. Congress must be notified and the European Commission needs approval from EU member states. It will present draft negotiating directives in March, no doubt prompting debate.
EU trade ministers took four months to overcome resistance from the car industry to start negotiations to create a free-trade pact with Japan.
One of the key sticking points is likely to be agriculture. When a transatlantic trade deal was suggested in 1998, it was shot down by France, which feared the European Union could be forced into concessions on farm trade.