ENNISKILLEN, Northern Ireland—The U.S. and the European Union on Monday said they would start talks to build a free-trade agreement to boost growth and create jobs across the Atlantic—a deal that officials hope will strengthen the world's biggest two-way economic relationship.

The talks' launch was announced by U.S. President Barack Obama, European Commission President José Manuel Barroso, European Council President Herman Van Rompuy and U.K. Prime Minister David Cameron, who spoke in a joint news conference ahead of a meeting here of leaders from the Group of Eight.

The first round of talks will take place next month in Washington, D.C.

EU ministers opened the way for the announcement on Friday, when they overcame differences between France and its partners over how a sweeping trade and investment pact could potentially impact subsidies for filmmakers and other artists.

Officials want the trade pact to be ambitious: They hope it will largely eliminate trade tariffs and harmonize regulations across a broad range of industries, greasing the gears of trans-Atlantic trade and investment.

But with greater ambition comes greater challenges for the talks. Besides negotiating directly with the U.S., Europe must balance the interests of 27 different member states—28 once Croatia joins the bloc this summer—and the European Parliament, while the Obama administration must deal with a restive Congress and a thicket of lobbyists from industries whose fortunes could be changed by an agreement.

"There are going to be sensitivities on both sides," Mr. Obama said. "There are going to be politics on both sides but if we can look beyond the narrow concerns to stay focused on the big picture—the economic and strategic importance of this partnership—I'm hopeful we can achieve the high-standard comprehensive agreement that the global trading system is looking to us for."

"It's important that we get it right, and resist the temptation to downsize our ambitions just to get a deal," he said.

Mr. Obama said that while a free-trade deal will be "critical," it won't be a "silver bullet" that solves all economic problems. Greater cooperation in a range of other areas is needed to boost jobs and growth, he said.

Speaking on the same platform, Mr. Cameron said that a trade deal between the U.S. and the EU would be "the biggest…in history," and could help create two million new jobs on both sides of the Atlantic.

"This is a once-in-a-generation prize and we are determined to seize it," he said.

Last week, France successfully lobbied the EU to exclude European film, music and TV industries from the trade talks. Paris has long protected its audiovisual sector under a subsidy policy known as the "cultural exception."

Some EU officials now worry that the exclusion of one industry from the talks might spark similar demands from the U.S. in other industries, such as the financial sector. Both sides will also be hard pressed to reach an accord on agriculture, an area that has long dogged EU-U.S. relations.

But Mr. Barroso said Monday the audiovisual-sector exclusion wouldn't threaten the prospects of a successful conclusion. The commission had always agreed that cultural products—such as film, TV and music—couldn't be treated like other goods, and that some form of "quotas or subsidies" would continue to be necessary to protect cultural and linguistic diversity, he said.

Monday's announcement followed an earlier meeting here in which German Chancellor Angela Merkel, French President François Hollande, Italian Prime Minister Enrico Letta and Irish Prime Minister Enda Kenny also participated.

The announcement marks a significant result for Mr. Cameron and the U.K.'s efforts to advance free trade during its yearlong presidency of the G-8—the grouping that comprises the U.S. and U.K., Japan, Germany, Russia, Canada, France and Italy. The EU also participates in the talks. The G-8 summit is also expected to focus on combating tax evasion and avoidance and increasing corporate transparency.

In the past, free-trade negotiations have been launched with similarly high hopes, but dragged on for many years, and ultimately delivered much less than their sponsors had set out to achieve. Most notably, multilateral free-trade talks launched in 2001 have failed to make any progress.

Mr. Barroso said talks between the U.S. and the EU will move more quickly toward a positive conclusion.

"We intend to move forward fast, we intend to make rapid progress," he said. "It won't be an easy task, but we will find solutions."

The U.S. and the EU were at pains to stress that their search for an agreement to remove barriers to trade and investment weren't intended to be to the detriment of other parts of the global economy.

"Everyone can benefit," Mr. Barroso said, pointing to companies outside either the EU or the U.S. that make components which are incorporated into goods that are traded between the two.

Mr. Cameron said that while a free-trade agreement could expand the EU economy by as much as