U.K. Prime Minister David Cameron has billed it as potentially the "biggest bilateral trade deal in history", but the U.S.-EU trade talks have suddenly entered tricky waters.
Recent claims that the U.S. National Security Agency (NSA) bugged EU offices and hacked into its computer network have complicated the first round of negotiations over the Transatlantic Trade & Investment Partnership (TTIP), which is set to get underway on Monday. France called for discussions to be halted for two weeks, but many in the EU feel that a compromise should be reached due to the economic benefits the deal can bring to the 28 member bloc.
The EU and US account for nearly half the world's gross domestic product (GDP), and both sides are hoping the deal will create a massive trading bloc able to compete with China.
Elmar Brok, a German member of European Parliament (MEP) said that while there is a "lack of confidence" after the spying allegations, "the deal is of common interest and we should overcome these problems to find a win-win situation for both sides."
(Read More: US Spying a 'Slap in the Face': EU Lawmaker)
According to the Centre for Economic Policy Research (CEPR), a U.S.-EU free trade agreement could boost the U.S. economy by an estimated 95 billion euros ($123 billion) a year and the EU economy by around 119 billion euros ($154 billion). It could also increase GDP in the rest of the world by almost 100 billion euros ($129 billion).
Under a deal, the U.S. and EU would get greater access to each other's markets by removing tariffs, opening up the services sector, and improving investment with the aim of kick-starting growth.
"A deal will open up the agricultural markets and certain elements of public services across the Atlantic, which could add a significant amount of jobs across the EU. And given that we have such a sluggish economy at the moment, even half a per cent of growth will be massive," David Martin, a Scottish MEP on the international trade committee of the European Parliament, told CNBC.
Harmonizing standards and regulations is seen as a vital part of the deal that will benefit industries on both sides of the Atlantic.
"Synchronization of regulations will be key. It should be a benefit to EU and U.S. firms and companies. If there is a race to the top, it is good for the environment and workers," said Robert Elliot, a professor at the University of Birmingham's Department of Economics.
Overall, EU exports to the U.S. are expected to rise 28 percent, equivalent to an additional 187 billion euros ($241 billion) per year. EU and U.S. trade with the rest of the world would also increase by over 33 billion euros ($43 billion) a year.
Several industries will benefit from the freer movement of goods and coordinated standards.
European car companies will be able to export more vehicles to the U.S. and even start manufacturing cars there. EU exports of motor vehicles to the U.S. are expected to increase by 149 per cent, while the EU auto industry's output is expected to rise by 1.5 percent. Aligning safety and environmental standards will cut out the red tape surrounding exports.
The chemical industry would also be a winner as importing products across the Atlantic would become cheaper. Pharmaceutical companies would find it easier to market products in the EU or US, creating more competition and pushing prices of drugs down.
Jeffries Briginshaw, managing director of British American Business, a lobby group, hopes it will encourage the movement of capital and boost the financial services sector.
"Nobody is trying to renegotiate the EU or U.S. finance rules, they are just asking what would happen when we put all the rules together," he said. "As the U.S. regulatory system and EU system becomes clearer together, we would like to see conversation between regulators about how you pass products through the system."
But there are also concerns on both sides that the deal could stumble on some key areas.
Professor Elliot said the labor would be anxious about lower labor standards. "Labor regulations are weaker in some respect in America, so European workers could worry that there would be a race to the bottom for lower labor regulations in Europe which would have a negative effect."
The powerful trade unions in the U.S. car industry may oppose the deal for fear lower tariffs could lead to a shift in American jobs to Europe.
Scottish MEP Martin hopes the EU will learn from past mistakes and not include an investor-state dispute mechanism in the trade deal, which would allow a U.S. company to sue the EU in a private tribunal if it feels that European regulations have disadvantaged it.
"This is not in the deal, and I don't want it in the deal, but the U.S. has done this with Canada," Martin added.
The U.S. and EU hope to push the trade deal through within 18 months, though judging on past EU trade agreements, this seems unlikely.