The European Union and the U.S. will begin formal talks on a free-trade agreement, paving the way for the biggest trade deal in history, according to BBC News.

European Commission President Jose Manuel Barroso made the joint announcement following President Barack Obama's State of the Union address.

A deal would bring down trading barriers between the two biggest economies in the world.EU-U.S. trade is worth around 455bn euros ($613bn) a year.