G8: Negotiations on new US/EU trade agreement to get underway after summit
Taoiseach Enda Kenny and the Irish presidency of the EU - which is now in its final months - had highlighted the mooted agreement as a priority for the country's six month term as head of the European council.
EU commission president Jose Manuel Barroso this afternoon said all EU member states had agreed a "broad mandate" to start negotiations.
"The European Commission will negotiate on behalf of all our 28 Member States. Our Partnership will be a true game changer for the global economy."
Bitish Prime Minister David Cameron said the deal had the potential to be "the biggest bilateral trade deal in history".
Mr Obama said it would help spur growth and create jobs, and thanked EU leaders including Mr Kenny - who attended the press conference announcing the start of negotiations - for their efforts.
Mr Obama called the deal a "potentially ground breaking partnership" which would help millions of jobs. He also said it would be "warmly received" in the US Congress and business circles.
"I believe we can forge an economic alliance as strong as our diplomatic and security alliance,” he added.