European Commission President Jose Manuel Barroso announced the beginning of talks in Brussels

The European Union and the US will begin formal talks on a free-trade agreement, paving the way for the biggest trade deal in history.

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-US trade is worth around 455bn euros (£393bn; $613bn) a year.