New difficulties in talks between the European Union and the US on the EU's controversial data protection law mean no agreement is likely in time for the EUUS summit on June 21st, officials in Brussels said yesterday.

Negotiations last week between Mr John Mogg, the Commission's director-general for the internal market, and Mr David Aaron, US under-secretary of commerce, revealed the two sides were still far from settling a dispute that could disrupt the transfer of personal data.

The negotiators made considerable progress on two elements of critical importance for the EU, the rights of people to gain access to information held on them and the introduction of some form of independent arbitration in disputes.

But concerns arose that the US self-regulatory system would not be able to match the standards of the directive, including a fear by the US that companies would refuse to sign up to the voluntary "safe harbours" it has proposed. This would propose a set of principles to which companies would be invited to sign up. The Department of Commerce would maintain a list of organisations that had chosen to participate. The EU has no intrinsic objection to this, provided it guarantees protection for data coming from the EU. If not, there is a danger that national data protection registrars in the 15 member-states will use their rights under the directive to block the flow of personal information to third countries that do not provide "adequate" protection.