The EU on Thursday defended its push to reform the European defense industry in a retort to US accusations that the overhaul would shut out allies such as Washington from European projects.

The skirmish over military spending comes as transatlantic ties are at a long-time low with fears running high that cooperation at NATO could be endangered.

In a letter seen by AFP, two senior officials said that the European Union "remains fully committed to working with the US as a core partner in security and defense matters" despite the planned changes.

However, the EU officials also insisted that the mooted reforms are merely a reflection of rules already imposed by the US.

"The transatlantic trade balance is resolutely in favour of the US," they insisted.

The US concerns, set out in a letter on May 1 from two of President Donald Trump's top defence officials, focused on the European Defence Fund (EDF), a seven-year 13-billion euro ($14.6 billion) pot approved by the European Parliament last month, and a key new EU defence cooperation pact known as PESCO.

Washington warned the proposed rules "would not only damage the constructive NATO-EU relationship we have built together over the past several years but could potentially turn the clock back to the sometimes divisive discussions about EU defence initiatives that dominated our exchanges 15 years ago."

Along with the warnings, the US officials also make a veiled threat to hit back, saying the EU would object to similar US restrictions "and we would not relish having to consider them in the future".

EU countries launched PESCO in late 2017 to try to harmonise a highly fragmented approach to defence spending.

Under the pact, countries cooperate on projects to develop new military equipment and on support systems such as military hospitals and training centres.

The US letter chimed with bitter divisions within the bloc on what rules to set for non-EU allies such as the US, Norway -- and for Britain after Brexit -- who want to contribute to future defence projects.

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