The United States says it will suspend temporarily its right to impose sanctions on EU goods in a trade dispute over biotech crops.
Activists in Europe continue to protest against GM produce
The EU missed a World Trade Organisation (WTO) deadline on Friday to end restrictions on imports of some genetically modified (GM) products.
US trade spokeswoman Gretchen Hamel said the EU would be given the chance to show "meaningful progress".
She said the US remained very concerned with EU treatment of biotech products.
"We are taking steps necessary under WTO rules to preserve our right in the WTO to suspend trade concessions," she said, adding that the Bush administration would assess EU policy periodically.
The case was also brought by Argentina and Canada with all three countries arguing their farmers lost money because of GM bans.
Ms Hamel said that genetically engineered crops now accounted for a substantial share of US farm production and exports.
The EU has difficulty complying with the ruling, chiefly because of a ban on GM products by Austria.
But the US trade spokeswoman singled out France for most criticism, following its decision to extend a ban on the only GM crop currently grown there.
In December, Paris imposed a temporary ban on the commercial sale of a genetically modified crop (MON 810) developed by the US biotech company, Monsanto.
"It is hard to overstate our disappointment," Ms Hamel said.
In 1998, the EU introduced a moratorium on new biotech authorisations that lasted six years.
The three countries behind the complaint to the WTO argued that the ban was about protectionism rather than science.
Biotech crops, including corn and soybeans that have been genetically modified to resist insects or disease, have been widely grown in the US for years.