Free trade between the United States and China could generate annual combined economic gains of $460 billion for the two countries, according to new research from the Peterson Institute for International Economics.

The study found that if the two countries could agree on a comprehensive deal to free up trade and investment, US exports to China would double over 10 years, with particular gains in services.

China stands to gain $330 billion, or 1.9 percent of gross domestic product, while the United States would benefit to the tune of $130 billion, or 0.6 percent of GDP.

The world's two biggest economies are negotiating an investment treaty, which China's vice finance minister said last week could be concluded in two years.

Myron Brilliant, head of international affairs at the US Chamber of Commerce, said that a US-China free trade agreement was not a short-term proposition but that it was feasible that talks could start within the next 10 years.

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