David Cameron today hailed the launch of negotiations of a "landmark deal" that would be worth around £100 billion to the European Union economy.
The Prime Minister said talks to break down trade barriers between the EU and the United States could create two million extra jobs and would help to "fire up" global economies.
President Obama said the trade relationship between the EU and US was the largest in the world and announced America would host the first round of negotiations for the "potentially groundbreaking partnership" next month.
Speaking at a press conference in Lough Erne at the G8, Mr Cameron said the deal would be the biggest in history and was a "once in a generation prize" he was determined to seize.
"There is no more powerful way to achieve that than by boosting trade and there's no better way than by launching these negotiations on a landmark deal between the European Union and the United States of America, a deal that could add as much as £100 billion to the EU economy, £80 billion to the US economy and as much as £85 billion to the rest of the world.
He added: "We are talking about what could be the biggest bilateral trade deal in history. A deal that will have a greater impact than all the other trade deals on the table put together."
President Obama said securing a US-EU tradel deal would be a "priority" for his administration. But he warned against "downgrading ambition" in a rush to strike an agreement.
"I am hopeful we can achieve the kind of high standards comprehensive agreement that the global trading system is looking to us to develop," he said.
"America and Europe have done extraordinary things together before and I believe we can forge an economic alliance as strong as our diplomatic and security alliances."
President Obama said it was important that the US and EU "get it right".
"That means resisting the tempation to downgrade our ambition or avoid tough issues just for the sake of getting a deal."
The president said the leaders would be giving a "mandate" to their negotiators, but added that it was likely they would have to step in personally to resolve particularly difficult issues.
Thrashing out the details of the agreement could take up to two years to finalise and is expected to be "challenging".
European Commission president Jose Manuel Barroso insisted "we intend to move forward fast".
He said: "We can say neither of us will give up content for the sake of speed but we intend to make rapid progress."
Mr Barroso said "huge benefits" were expected from reducing red tape between the two nations.
He added: "Integrating two of the most developed, most sophisticated and certainly the largest economies in the world can never be an easy task but we'll find convincing answers to legitimate concerns, we'll find solutions to thorny issues, we'll keep our eyes on the prize and we will succeed."