Tensions over trade between the European Union and the United States escalated yesterday with the decision of the Bush administration to bring a case against the EU over Brussels's five-year ban on imports of genetically modified food. Conor O'Clery reports from  New York.

The decision to file the complaint to the World Trade Organisation (WTO) in Geneva was announced by US trade representative Mr Robert Zoellick, who said that Argentina, Canada and Egypt would join the US in the WTO suit.

The EU, in a statement from its Washington office, said it "regrets this move as legally unwarranted, economically unfounded and politically unhelpful". Last week Brussels raised the stakes in the transatlantic row with an ultimatum to the US that it would begin imposing $4 billion (3.46 billion) in sanctions if the US Congress did not repeal a foreign sales provision that illegally benefits large American exporters.

House Speaker Mr Dennis Hastert has been pressing for years to get the US to file a case to the WTO case on the grounds that US farmers are suffering an estimated $300 million loss in cancelled export sales.

The EU imposed a moratorium on imports of genetically modified foods in 1998 in response to popular fears about health risks among European consumers.

"The EU's moratorium violates WTO rules," said Mr Zoellick. "People around the world have been eating biotech food for years. Biotech food helps nourish the world's hungry population, offers tremendous opportunities for better health and nutrition and protects the environment by reducing soil erosion and pesticide use."

EU trade commissioner Mr Pascal Lamy replied: "The EU's regulatory system for GMOs' authorisation is in line with WTO rules: it is clear, transparent and non-discriminatory. There is therefore no issue that the WTO needs to examine. The US claim that there is a so-called "moratorium" but the fact is that the EU has authorised GM varieties in the past and is currently processing applications. So what is the real US motive in bringing a case?"

There are also deep divisions in the current Doha round of trade talks, with the US taking aim at the EU's system of farm support.