The United States and the European Union have signed a draft pact on sharing passenger data for flights between the two continents, which both sides have welcomed as a significant step forward.

The agreement, which must be adopted by the European Council and parliament, aims to combat transnational crime and terrorism while improving data protection, according to a European Union statement.

Cecilia Malmstrom, the EU commissioner for home affairs, said Monday that the deal "contains robust safeguards for European citizens' privacy, without undermining the effectiveness of the agreement in terms of EU and U.S. security."

At the conclusion of talks with U.S. Homeland Security Secretary Janet Napolitano and Attorney General Eric Holder, Malmstrom told AFP that the two sides had "identified areas where we can cooperate, by sharing experience."

In a statement, Napolitano hailed the "significant progress" made on the passenger data sharing agreement, noting that the deal -- which replaces an existing agreement from 2007 -- had been initialed last week.

She and Holder "highlighted the United States' continued commitment and efforts to work with EU counterparts towards an umbrella agreement," the statement said.

The U.S.-EU talks on justice and home affairs -- which take place twice a year in the United States and Europe -- also focused on cybercrime, the fight on terror and border security.

"The United States is strongly committed to working with our European partners to combat threats to our mutual security and economic stability," Napolitano said.

"Together, we will continue joint efforts to enhance information sharing, strengthen cybersecurity and ensure the security and resilience of our global supply chain systems against terrorism and transnational crime."