The European Union's executive arm said that since the United States along with Argentina and Canada filed the case in 2003, the EU had changed the way it approved GM foods for market and therefore the ruling was already dated.

"For the moment, we see no consequences for our legislation which we consider to be toughest in the world," commission spokeswoman for environment issues Barbara Helfferich said.

A WTO dispute settlement panel backed the complaint that charged that a European moratorium on imports of GMOs, in place since 1998, reflected business protectionism rather than concerns about the health of consumers or the environment, according to diplomats in Geneva.

They accused Brussels of foot-dragging on approving new GM products and abusing a WTO agreement that enables members to restrict imports on health grounds.

"The panel found that were delays in approving products that might constitute a de facto moratorium during that period," an EU official said speaking on condition of anonymity.

"We dispute that a moratorium existed and we contest the claim that delays in the past were excessive," he added, stressing that "the panel has clearly said that no moratorium currently exists."

He said that since May 2004, the European Commission had approved nine GM products to be brought to EU markets, proving that its approval "system is working, the science is sound, products are being processed and approved."

Other EU officials said it was too early to say whether or not they would appeal against the ruling as they were still digesting the panel's 1,050-page report on what has been seen as one of the most technical cases ever handled by the decade-old WTO.

US deputy trade representative Susan Schwab said that Washington now expected a change in the EU's attitude towards GM products which would be demonstrated by more imports.

"What will be the impact of the report on behaviour? Proof will be in trade flows, in the transparency of the approval process," she told a briefing during a visit to Brussels.

"If you are a producer or an exporter, the proof of the pudding is in trade flows," she said.

While the European Commission played down the WTO decision, European environmentalists were outraged.

"By ruling against the EU, the WTOs dispute panel has effectively forced open our markets -- that is, our grocers' shelves -- to GM imports from the US," said Caroline Lucas, a Green member of the European Parliament.

"But perhaps worse, it has ruled that free trade should take precedence over the precautionary principle and the democratic right to regulate for the protection of either health or the environment," she added.

Greenpeace dismissed the ruling and remained convinced that it would not hasten the spread of GM crops.

"US agro-chemical giants will not sell a bushel more of their GM grain as a result of the WTO ruling," said Greenpeace trade expert Daniel Mittler.

"European consumers, farmers and a growing number of governments remain opposed to GMOs, and this will not change -- in Europe or globally," he added.

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