The Egyptian government has embarrassed the United States by withdrawing its name from a World Trade Organisation complaint against the European Union's de facto moratorium on the import of genetically modified foodstuffs.

The decision - which follows intense EU pressure - is particularly galling for Washington, given President Bush's claim that European opposition to GM technology was worsening famine in Africa and the fact that Egypt had been the only African country to back the USA's case at the WTO.

To punish Egypt, the US has frozen talks on establishing a free trade agreement, however, the Financial Times has reported that the Egyptians were more worried about upsetting Brussels, with officials highlighting the 40% of Egypt's exports that are sold into the EU.