Mickey Kantor, the US trade representative, said sanctions would go ahead as scheduled tomorrow unless both sides bridged their differences over foreign access to government contracts.
Brussels has warned it would retaliate against any US trade measures against the EC.
Sir Leon Brittan, the EC commissioner for trade, was to return to Brussels last night after two days of talks, but he and Mr Kantor said at a joint press conference yesterday that they would stay in telephone contact today.
The dispute stems from conditions for awarding certain government contracts - particularly in telecommunications and energy - on both sides of the Atlantic.
In February Washington announced reprisal measures if the EC did not make it easier for US companies to bid for government contracts, but suspended implementation of the reprisals pending the talks.
The EC gives a 3 per cent price advantage to European companies in the awarding of government contracts in the EC and requires that 50 per cent of equipment used be European.
'We have not reached agreement,' Mr Kantor said. Sir Leon said: 'It would be wrong to assume it's just a case of finishing touches.
The two men reported more progress on another trade matter, saying that both sides would have a series of meetings between now and 6 July aimed at removing obstacles to successful completion of global free trade talks, known as the Uruguay round of the General Agreement on Tariffs and Trade, which have dragged on for nearly seven years.
'We hope to have significant progress by the G7 summit (on 6-8 July),' Mr Kantor said.
Mr Kantor said progress was being made in the area of market access, which covers reducing tariff barriers to the flow of manufactured goods.Reuse content