European Union countries have approved the conditions for negotiating a new and strictly limited trade deal with the United Sates.

EU headquarters said the agreement will focus on eliminating tariffs on industrial goods only, and would not include agricultural products despite US demands they be on the table.

European Commission president Jean-Claude Juncker met US President Donald Trump last July to head off a looming trans-Atlantic trade war after Mr Trump slapped tariffs on imports of EU steel and aluminium.

EU trade commissioner Cecilia Malmstrom welcomed the agreement, saying: “We are now ready to move ahead into the next phase of EU-US relations.”

Ms Malmstrom says this is separate from a previous trade negotiation, known as TTIP, which is officially “in the freezer”.