(CNN) -- The U.S. and European Union will begin talks later this year on a multi-trillion dollar free-trade pact to boost economic growth.
President Barack Obama and EU leaders are hoping agreement to reduce trade barriers will support millions of jobs on both sides of the Atlantic.
Speaking at a press conference in Brussels, Trade Commissioner Karel De Gucht said the EU and the U.S. would strive to open negotiations by the end of June.
"This undertaking won't be easy. Ideally, we'd like to complete this work in about two years from now," De Gucht said.
If finalized, the deal -- dubbed the Transatlantic Trade and Investment Partnership -- would be the biggest bilateral trade agreement ever negotiated.
As two of the world's most important trade partners, business between the U.S. and the EU already exceeds $2 billion a day and $5 trillion annually. This accounts for one third of global trade flows, according to the EU and the U.S. chamber of commerce.
The negotiations come as governments seek new ways to rekindle growth without adding to already inflated national debts while central banks have pumped trillions of dollars into the global economy.
Commission President Jose Manuel Barroso described the pact as a "game changer" and said it "is a boost to our economies that does not cost a cent of taxpayer money."
The EU estimates the partnership could increase the 27-nation bloc's annual economic output by 0.5%.
US President Barack Obama announced the launch of talks in his State of the Union address yesterday. He said of the partnership: "Trade that is free and fair across the Atlantic supports millions of good-paying American jobs."
Obama added: "It is our generation's task, then, to reignite the true engine of America's economic growth -- a rising, thriving middle class."
The U.S. and EU have been focusing on bilateral deals with trading partners as it became clear that talks at the World Trade Organization on a global deal -- the Doha round -- were making little progress.
De Gucht said the deal would center on dismantling any remaining trade tariffs while tackling regulatory and certification barriers.
The US Chamber of Commerce has calculated that the removal of all tariffs could add $180 billion to combined EU-U.S. gross domestic product over five years. Eliminating half the non-tariff barriers to trade could add a further 3% to GDP for both the EU and the U.S.
Barroso added that tariffs must be cut wherever it makes sense and is possible. He said: ""For these negotiations to succeed, we need -- above all -- political will: a desire to make our rules and regulations compatible."