The European Commission and U.S. regulators have agreed to apply rules for trading derivatives more flexibly and make it easier for international traders to do business.

The agreement will help address a bone of contention in international trade between Europe and the U.S. as they embark on talks toward a landmark free trade agreement.

The U.S. derivatives regulator, the Commodity Futures Trading Commission, and the EU's executive, the European Commission, announced on Thursday a "path forward" on a package of measures for cross-border derivatives.

The plan will allow leeway for a New York bank, for example, to use a European exchange to buy and sell derivatives, said an official familiar with the initiative.

The CFTC may also allow foreign banks some flexibility when trading in the U.S., also making it easier to do business in that market.

"We've taken another significant step in our mutual journey to bring transparency and lower risk to the swaps market worldwide," said CFTC chairman Gary Gensler.

The CFTC and the European Commission are implementing rules drawn up in response to the 2007-09 credit meltdown, to make the $630 trillion derivatives industry safer, and prevent a repeat from costly bank bail-outs.