Getting Iraq back on its feet will be a major task

The European Commission has been examining whether contracts awarded by the US government conform with an agreement signed by 25 World Trade Organisation (WTO) members.

There have been suggestions that the US is excluding other countries by awarding the main contracts to its own companies.

"We are continuing our examination but for the moment we have not found any flaw in the system," a spokeswoman for the Commission said.

"In any case for the time being no European enterprise has complained of discrimination when the US administration has awarded these contracts."

Under scrutiny

The aim of the WTO agreement is make sure there is international competition for tenders launched by the governments and public bodies of members states.

But it provides for exceptions, for example in matters of national security or public health.

The Commission had said earlier it intended to take a close look at the awarding of a huge reconstruction contract in Iraq to the California based company Bechtel.

The US government has said that as far as the rebuilding of Iraq is concerned "prime contracts will be awarded to US firms through the competitive procurement process", although subcontracting firms from other countries may be given some work.