"We have been dismayed at a variety of suggestions where we see climate or the environment being used as an excuse to close markets," Schwab said after talks with EU Trade Commissioner Peter Mandelson.

She said it was "imperative" to "work with our colleagues in the environmental area to use trade as a positive contributor to environmental causes ... but also to avoid using climate ... as an excuse for trade protectionism."

Washington and Brussels have frequently clashed over environmentally related issues ranging from hormones in US beef to proposed EU quotas on air transport emissions.

Adding fuel to the fire, French President Nicolas Sarkozy called in October for a European levy on imports from countries outside the Kyoto Protocol, which include the United States.

Speaking alongside Schwab, Mandelson said: "I don't believe that trade restrictions are the way forward for combatting climate change," adding that they "carry a risk of retaliation" and would ultimately drive up costs.

"The course we need to take is that of international negotiations," Mandelson said.

"My view is that even anticipating the possibility of trade measures or border adjustment measures would be a disincentive to those negotiations and would not assist their positive conclusion," he added.

Among the recent environmental thorns in their trade relations, the EU and the United states are struggling to overcome differences over genetically modified organisms.

While the United States has suspended its World Trade Organisation right to retaliate in a WTO case against the EU over GMOs, Schwab attacked European resistance to such products as being scientifically unfounded.

"Using bad science to make trade policy decisions is certainly a practice that would come back to haunt all of us in other countries," she said.

"We all have responsibility for the health and safety of our citizens, and clearly that is the first priority for all of us, but in the case of biotech there is clear scientific evidence that this is not bad," she added.

Schwab also attacked a recent decision by Sarkozy to ban a contested strain of GM maize amid wide public opposition in France to GMOs.

She insisted that there was a body of scientific evidence that the strain in question "is safe for cultivation, safe for consumption."

"Therefore, we are very concerned that consumers are not being given an opportunity to choose but rather that governments are making non-scientific decisions to keep products out," she added.

Mandelson said: "We will guide the member states to what we think is the appropriate scientific based conclusion which is in conformity with the EU's own legal framework."

However, Mandelson pointed out that Europe also had concerns about environmental policies in the United States in relation in particular to government support for the booming US biofuel industry.

"We are likely to receive a complaint from the European industry on this and we will certainly investigate and take any action on and pursue it if we find the complaint is substantiated," he said.

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