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"Following a very good discussion today, we have reached an understanding that provides a pragmatic way forward in the long-running beef dispute," EU Trade Commissioner Catherine Ashton said in a statement after talks with U.S. Trade Representative RonKirk.
Ashton said the agreement was mutually beneficial and an effort will be made to quickly finalize it.
The agreement would provide additional duty-free access to the EU market for high-quality beef produced from cattle that have not been treated with growth-promoting hormones -- 20,000 tons of beef in the first three years, and increasing to 45,000 tons beginning in the fourth year.
Under the agreement, the United States will maintain existing sanctions and will not impose new sanctions on EU products during the initial three-year period, and will eliminate all sanctions during the fourth year.
The two sides will refrain from further litigation at the World Trade Organization (WTO) regarding the EU's ban on beef treated with certain growth-promoting hormones for at least 18 months.
Before the end of the four-year period, the two sides will seek to conclude a longer-term agreement.
The provisional deal still needs to be approved by EU governments and the U.S. Congress.
An EU ban on hormone-treated beef has been in effect since the early 1980s. The ban was challenged by the United States and Canada at the WTO in 1996.
The WTO ruled against the EU in 1998 and permitted the United States and Canada to impose annual sanctions on EU goods to the value of 116.8 million euros (155.6 million U.S. dollars).
The EU argued in 2003 that it had scientific grounds to ban hormone-treated beef and that trade rules allowed such restrictions. The United States and Canada rejected the argument and maintained their trade sanctions.
The WTO ruled in November that the United States and Canada should end their sanctions and called on the three parties to resolve the dispute.