Mike Moore, the former head of the World Trade Organisation (WTO), has denied the threat of an all-out trade war.

In his last key ruling at the WTO's helm, Mr Moore, who stepped down on Sunday, backed a record $4bn (�2.6bn) package of EU trade sanctions against US exports.

The measure is in retaliation for large US tax subsidies benefiting American multinationals such as Boeing and Microsoft.

The decision has already been described as potentially devastating in respect to forging future world trade agreements.

But Mr Moore is convinced the decision will not inflame transatlantic relations.

"It's regrettable but it's predictable," Mr Moore said of the sanctions.

"This has happened before and I believe it is manageable," he told Radio Five Live's Wake up to Money programme.

In search of a solution

"The parties are smart enough to navigate through the difficulties," he said, having previously encouraged the two sides to work towards an "amicable and constructive solution" to the dispute.

Mr Moore has been head of the WTO for three years, and said that time had represented a "solid achievement" in the life of the international trade body.

But he admitted there was still more work to be done in explaining the role of the WTO to anti-globalisation protestors.

He was replaced on Sunday by Supachai Panitchpakdi, a former trade minister of Thailand.