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NEW YORK — The S&P 500 and the Dow eased on Friday after a steep drop in oil prices pressured energy stocks, but losses were limited by gains in chipmakers and retail stocks.

US crude tumbled 4 per cent to settle at $67.88 a barrel after Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed prices to their highest since 2014.

The S&P energy index slid 2.6 per cent and registered its biggest daily percentage drop since early February, while Chevron dropped 3.5 per cent and Exxon Mobil fell 1.9 per cent and were among the biggest drags on the Dow and S&P 500.

“It’s been a very rough week for oil, and that has weighed” on energy names, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. At the same time, the continued pullback in yields has pressured financials, he said. 

The S&P 500 banks index fell 0.4 per cent after US Treasury yields hit their lowest in three weeks.

Stock markets this week also have been roiled by trade tensions with China, a US threat of imposing tariffs on imported cars and uncertainty over a US-North Korea summit. 

President Donald Trump said on Friday the summit with North Korean leader Kim Jong-un could still take place on June 12 as originally planned, a day after canceling it.

The Dow Jones Industrial Average fell 58.67 points, or 0.24 per cent, to 24,753.09, the S&P 500 lost 6.43 points, or 0.24 per cent, to 2,721.33 and the Nasdaq Composite added 9.43 points, or 0.13 percent, to 7,433.85.

For the week, the Dow was up 0.2 per cent, the S&P 500 was up 0.3 per cent and the Nasdaq gained 1.1 per cent.

The Nasdaq was boosted by chipmakers, including Broadcom, which rose 2.7 per cent. Intel climbed 1.3 per cent.

A 20.2 per cent surge in shares of Foot Locker boosted the S&P consumer discretionary index, which rose 0.2 per cent, after the company reported a better-than-expected quarterly profit and helped shares edge higher in Nike, which has a partnership with the footwear retailer.

The S&P retail index rose 0.2 per cent.

Trading volume was lighter than usual ahead of the long weekend, with markets shut on Monday for the Memorial Day holiday.

About 5.8 billion shares changed hands on US exchanges. That compares with the 6.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favoured advancers.

The S&P 500 posted 20 new 52-week highs and one new low; the Nasdaq Composite recorded 104 new highs and 36 new lows.

SAINT PETERSBURG — Amid sanctions, countersanctions and trade wars, Western firms gathered at the Saint Petersburg economic forum that kicked off Thursday will need to tread nimbly with a Russia keen to attract foreign investment.

The annual event, often called the Russian Davos, used to serve as a window on a booming economy, but over the past five years has been a soap box allowing the Kremlin to let the world know it is open to investors despite tense relations with the West.

This year, French President Emmanuel Macron and Japanese Prime Minister Shinzo Abe will make an appearance at the three-day event.

This year’s forum comes at a critical moment for Russia, which is just overcoming a recession triggered by US sanctions and a drop in oil prices in 2014.

Putin, who was re-elected in March, has put the development of the economy at the heart his fourth term in office, and aims to catapult the nation into the fifth-largest economy spot, from its current position in 12th place. 

Russia will need to boost its growth rate to six per cent from year, from the lethargic 1.1 per cent it registered last year, to meet that goal, former finance minister Alexei Kudrin said on Thursday.

Tens of billions of dollars in investment will be needed, and despite rising oil prices Russia will not be able to muster that without foreign firms and investors.

The head of Russia’s central bank, Elvira Nabiullina, said “direct investments should become one of the main sources of Russian growth” and that the country would need to increase its transparency to attract foreign capital.

International Monetary Fund (IMF) Chief Christine Lagarde praised Russia for its stable finances and low inflation.

But she noted the rapid growth it had previously enjoyed was gone and that according to the IMF’s estimates was growing at a rate of 1.5 to 1.7 per cent.

Lagarde said the low growth was not only due to foreign sanctions or low oil prices, but Russia’s falling population, which means it needs to implement reforms to boost productivity.

During the discussion Finance Minister Anton Siluanov announced that the government would create a fund to spend up to 3 per cent of annual economic into public infrastructure in an effort to boost growth.

Open for business 

Russia’s hopes to attract foreign firms and investment have been received a cold shower from the latest US sanctions, and the Kremlin’s promises are viewed somewhat sceptically as Putin has several times set the goal of becoming a top five economy during his 18 years in power.

Moreover, Putin kept in place his team in the new government appointed after the election, dashing hopes for the appointment of reformers.

“There is clear caution, even reluctance to get involved from the British, the Americans,” said Charles Robertson, an analyst at Renaissance Capital, although he noted there many French firms at the forum due to Macron’s presence.

He also downplayed Russia’s growth rate, saying it is better than it appears on the surface as the declining population means it is a bigger gain in per capita terms.

With wages now lower than in China and a highly-educated workforce, Robertson said Russia would remain attractive to many firms.

Despite the strained international situation, the Saint Petersburg forum has still attracted more than 1,400 foreign companies from 70 countries.

Even if most US multinationals are staying away, others are showing their commitment to a nation of more than 140 million people into which foreign firms have poured billions in investment since the collapse of the Soviet Union in 1991.

The chief executives of US aircraft maker Boeing, as well as the oil companies BP, Shell and Total are also attending.

Macron is also expected to send the message that not only political dialogue should continue, but business ties as well within the framework of sanctions.

“So far Putin and his team have been clear, they want to be as open [as] the world will allow them...” Robertson told AFP.

ISTANBUL — Turkey’s central bank on Wednesday announced a sharp hike in interest rates to boost the embattled lira, prompting the currency to rally strongly after haemorrhaging value against the dollar in the last days just ahead of elections.

The bank said after an emergency meeting of its monetary policy committee it was raising the late liquidity window lending rate from 13.5 per cent to 16.5 per cent.

The lira had earlier lost over 3.5 per cent in value against the dollar but sharply gained in value after the bank’s announcement, gaining 1.1 per cent in value on the day to trade at 4.62 lira to the dollar.

“Current elevated levels of inflation and inflation expectations continue to pose risks on pricing behaviour,” the bank said in a statement.

“Accordingly, the committee decided to implement a strong monetary tightening to support price stability,” it added.

Turkish inflation reached 10.85 per cent in April from the same month the year earlier and the economy has been plagued by fears of overheating despite impressive growth.

The central bank’s statement ended days of suspense on the markets over whether it would implement a rate hike after President Recep Tayyip Erdogan pressed for lower rates to boost growth.

The next scheduled meeting of Turkey’s central bank had not been due until June 7 but economists had said an emergency — and substantial — rate hike by the central bank is not only on the cards, but essential.

‘Maintain tight stance’ 

The 300 basis points hike was largely in line with what economists said was needed and, in a hawkish statement, the central bank said it would continue to use “all instruments” to achieve price stability.

“A tight stance in monetary policy will be maintained decisively until the inflation outlook displays a significant improvement,” it added.

The sharp fall in the currency’s value has come at a hugely sensitive time as Turkey heads to June 24 presidential and parliamentary elections where Erdogan is seeking a new mandate and a thumping parliamentary majority.

Until the bank’s move, the lira has lost over 18 per cent in value against the dollar as fears grow over the health of the Turkish economy.

Its performance has been even worse than the Argentinian peso which has also suffered severe turbulence over the last month.

“The decision will ease investors’ fears that the central bank is unwilling or unable to tighten policy ahead of elections scheduled for June,” said Jason Tuvey, emerging markets economist at London-based Capital Economics.

The situation had not been helped by Erdogan himself who has consistently pressured the central bank to keep rates down to boost growth.

He hurt the lira last week by saying he plans a greater say in monetary policy if he wins the elections, which markets saw as a slap in the face of the nominally independent central bank.

He has also made statements that fly in the face of economic orthodoxy, describing interest rates as the “mother and father of all evil” and saying low interest rates help keep down inflation.

‘Short-lived relief?’ 

The Istanbul bourse earlier said it was taking measures to convert its foreign exchange assets to lira to “fight speculative actions aimed at creating a negative image of Turkey”, but it was unclear if this would have any impact on the currency.

An AFP photographer in Istanbul’s Grand Bazaar said currency traders were refusing to sell dollars to limit their own losses amid the currency slide.

The economy has generally been a trump card for Erdogan in his 15 years in power, with the Turkish strongman crediting himself with ending chaos that brought the country to near financial meltdown in the 2000-2001 crisis.

Tuvey said investors will still be waiting to see signs that Turkey is serious about tackling its high inflation and high current account deficit, and not loosen fiscal policy ahead of the election.

“The central bank has hiked interest rates several times over the past few years to shore up the currency. But the relief has often proved short-lived,” he said.

US stocks rose on Tuesday, adding to gains from a day earlier, as the United States and China made progress on reducing trade tensions after agreeing to put their differences on hold.

Washington neared a deal to lift its ban on US firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday, while Beijing said it will steeply cut import tariffs for automobiles and car parts.

Shares of Ford, General Motors, as well as the US-listed shares of Fiat, were up between 1 per cent and 2.4 per cent.

"The market is taking very well to what appears to be the fact that Trump is able to manoeuvre the trade talks in our favour," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. "We're seeing a continuation of that positive momentum this morning."

Micron jumped 6.9 per cent after announcing a $10 billion share buyback following a raised quarterly forecast on Monday, helping the technology index rise 0.3 per cent.

A 4.2 per cent gain in Lowe's Cos after the home improvement chain named J.C. Penney's Chief Executive Officer Marvin Ellison to the top position boosted consumer discretionary stocks. 

J.C. Penney's tumbled 4.2 per cent.

At 9:59 am ET, the Dow Jones Industrial Average was up 12.78 points, or 0.05 per cent, at 25,026.07 and the S&P 500 was up 5.81 points, or 0.21 per cent, at 2,738.82. The Nasdaq Composite was up 19.98 points, or 0.27 per cent, at 7,414.01.

Declines in Caterpillar and Boeing, which drove gains on Monday, weighed on the blue-chip Dow.

Toll Brothers declined 7.3 per cent after disappointing second-quarter profit and weighed on other homebuilders. Lennar dipped 1.7 per cent, while PulteGroup slid 2 per cent.

The possibility of a ZTE reprieve helped shares of optical component makers. Acacia Communications, which got 30 per cent of its 2017 revenue from ZTE, rose 1.4 per cent, while Oclaro gained 1.1 per cent.

Advancing issues outnumbered decliners by a 1.41-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and no new lows, while the Nasdaq recorded 90 new highs and 9 new lows.

SOUTHERN BADIA, Iraq — On a former battlefield of the 1991 Gulf War, deep in Iraq's southern desert, a Kuwaiti investor is looking to grow 100,000 date palms and build a nature reserve complete with ostriches and deer.

Few Kuwaiti firms have returned to do business in Iraq since Saddam Hussein's 1990 invasion of its smaller neighbour and its UN-led liberation a year later.

But businessman Abdul-Aziz Al Babtain is pouring $58 million into a date farm project in southern Badia, some 150km from the port city of Basra, officials said.

"We hope to have 100,000 [trees] in the next five to six years," said Diyah Sharadeh, Babtain's representative in Iraq, adding that the dates would first be sold in Iraq and later exported.

So far 5,000 date trees have been planted.

Iraq once produced three-quarters of the world's output of dates, but now accounts for 5 per cent after decades of conflict, despite being home to around 350 types of date tree.

Babtain had begun the farm in the 1980s, a sign at his office shows.

But Iraq seized it after the 1990 invasion, and due to its proximity to the Kuwaiti border, it turned the area into a military zone, digging trenches for heavy guns.

These were then bombed in air strikes as part of Kuwait's liberation campaign, but authorities never cleaned up the trenches, leaving bullets and parts of tank turrets rusting away just outside the field.

In a bid to turn a new leaf, Iraq returned the farm to Babtain and granted his business tax exemptions.

"This will be the first private [date] investment project in Iraq," said Ali Ghasseb, head of the Basra Investment Commission. "It was a farm, then became a battlefield and is now again a farm".

The farm has created some 50 jobs in this desolate area and will need up to 500 workers once the trees begin producing.

In a second step, Babtain plans to set up a natural reserve for which ostriches and deer will be imported, Sharadeh said.

Thaw

Ties between Kuwait and Iraq remained strained even after Saddam was toppled in a US-led invasion in 2003, but they have improved since, with the Gulf state hosting in February a donor conference to rebuild Iraq.

But Kuwaiti firms have been reluctant to return, demanding guarantees that their business will not be taken away again. There is only one other Kuwaiti investor in Basra, involved in a shopping mall, Ghasseb said.

But trade has picked up in recent years as foreign firms use Kuwait's port to ship goods to Iraq due to its better security. Up to 200 vehicles cross the border at the Safwan post every day, an Iraqi officer said.

Kuwaiti visitors are also trickling back to the Shiite Muslim holy cities of Najaf and Kerbela. A third of Kuwaitis are Shi'ites.

In the other direction there is little private traffic as Kuwait rarely grants visitor visas for Iraqis for security reasons.

"I come twice a year. There are no problems for Kuwaitis now," said a Kuwaiti who gave his name as Mohamed after crossing the border to make a pilgrimage to Najaf.

WASHINGTON/KABUL — US President Donald Trump's decision to pull out of the Iran nuclear accord and re-impose sanctions on Tehran threatens to derail a project to help build Afghanistan's economy, endangering a key goal of the US strategy to end America's longest war.

The Indian-backed Chabahar Port complex in Iran is being developed as part of a new transportation corridor for land-locked Afghanistan that could potentially open the way for millions of dollars in trade and cut its dependence on Pakistan, its sometimes-hostile neighbour.

Building Afghanistan's economy would also slash Kabul's dependence on foreign aid and put a major dent in the illicit opium trade, the Taliban's main revenue source.

But Trump's decision to re-impose sanctions on Iran and penalise financial institutions for doing business with Tehran is clouding Chabahar's viability as banks, nervous they could be hit with crippling penalties, pull back from financing.

"President Trump's decision has brought us back to the drawing board and we will have to renegotiate terms and conditions on using Chabahar," a senior Indian diplomat said. "It is a route that can change the way India-Iran-Afghanistan do business, but for now everything is in a state of uncertainty."

The White House did not respond to requests for comment.

Launched in 2016, the joint Iran-India-Afghanistan Chabahar project already was facing holdups. It has yet to see significant traffic apart from some containers of donated wheat from India, and the first shipments of Afghan dried fruit to India are not expected before July.

At least three contracts to build infrastructure at the port now have been delayed, with two Chinese companies and a Finnish group left hanging while bankers seek clarity from Washington before approving guarantees, a person close to the project said.

In addition, Afghan traders, who were hoping for an alternative to Pakistan's port of Karachi, now find themselves cut off from funding and forced to rely on the traditional hawala money transfer system, which is insufficient on its own to transform an economy. Hawala is a trust-based system commonly used in Afghanistan that involves the movement of funds between agents in different countries. 

"We know our correspondent banks would not let us pay for imports coming through that port," said a senior executive at one major Afghan lender.

Chabahar is among a number of projects of transport and energy networks projects designed to boost Afghanistan's trade and lay the foundations for a mining industry capable of exploiting its billions of dollars in untapped mineral reserves.

Bypassing the border with Pakistan, which last year was closed for some 50 days over various disputes, Chabahar is seen as a way for Afghanistan to consolidate its relationships with India and other regional powers.

"The only way to get India more involved" in Afghanistan's economic development "is through Chabahar", said Barnett Rubin, an expert with New York University's Center for International Cooperation and a former adviser to the State Department and the United Nations. "Our Iran policy is headed for a train wreck with our Afghanistan policy."

Foreign aid

Some 17 years after the US-led invasion to oust the Taliban from power, Afghanistan remains one of the world's poorest countries, highly dependent on foreign aid.

Apart from illegal opium exports estimated at some $2 billion by the International Monetary Fund, its main products are dried and fresh fruits, and carpets, none of which amount to more than a fraction of the value of the drugs trade.

Initially Afghanistan would export agricultural produce — such as pomegranates and grapes — through Chabahar, utilising a section of a road India paid for and then an extension to the Iranian border that New Delhi built, experts said.

Eventually, those exports could expand to mineral resources, something Trump has expressed an interest in gaining for US firms. For India, this would mean using a planned railroad to Chabahar to export iron ore from two tracts at the Hajigak iron mine in central Afghanistan that it won the rights to exploit, the experts said.

"The economic piece is really important to get a glimmer of hope for Afghanistan to move beyond a land-locked, poppy-based economy. We are now shooting that in the head," said Thomas Lynch, a National Defense University expert and a former US army officer who advised the chairman of the Joint Chiefs of Staff on South Asia policy.

"There is no other legitimate and reliable way to do that. You can't do it by air, you can't do it through Pakistan because they just extort for everything they do," said Lynch. "The lifeline runs through Chabahar."

In addition, by hindering the development of Chabahar, the United States will leave Afghanistan dependent on Pakistan, historically its main trade partner and outlet to the world.

That would undermine another Trump goal of pressuring Islamabad to shutter Afghan insurgent sanctuaries on its side of the border and force the militants into peace talks.

Afghan officials have lobbied hard for exemptions to the sanctions for Afghan companies operating though Chabahar without success and are waiting for clarity from Washington.

"Now the uncertainty is that we don't know what's going to happen with Chabahar," said Atiqullah Nusrat, chief executive of the Afghanistan Chamber of Commerce and Industry. "We haven't heard anything so we have to wait and see what happens." 

NEW YORK —  The dollar rose to a five-month high against a basket of major currencies on Friday, helped by weakness in the euro as investors fretted about political uncertainty in Italy.

The dollar index has climbed for five straight sessions, posting a 1.2 per cent weekly gain. It has risen 5 per cent since mid-February, with investors betting US interest rates will need to rise further to curb inflation.

However, Shaun Osborne, chief FX strategist at Scotiabank in Toronto said the dollar's rally was more about extreme short positioning that needed to unwind.

"We continue to view dollar gains as a temporary issue, reflecting excessive short positioning and concerns European growth momentum has slowed and may impair the ECB's [European Central Bank] willingness to move away from quantitative easing later this year," Osborne said. 

The euro on Friday tracked its fifth successive weekly decline versus the dollar, its first such fall since 2015. Europe's single currency has dropped about seven cents in three weeks amid a sharp dollar rally. 

Concerns have also mounted about the agreement between Italy's far-right League and 5-Star Movement on a governing accord that would slash taxes and ramp up welfare spending.

In late trading, the euro fell to a five-month low of $1.1753. It has declined nearly 1.2 per cent versus the dollar this week.

The dollar index, meanwhile, rose to 93.83 on Friday, the highest since mid-March.

Piotr Matys, FX strategist at Rabobank in London, said based on technical analysis, it is possible that the dollar index had a "valid bullish breakout".

"It is reasonable to assume that the US dollar index is likely to revisit the next important tops at 94.219 and 95.149 in the coming weeks," Matys said. "A close above these levels would strengthen the upside bias."

On Friday, the dollar set a fresh four-month high against the yen but was last flat at 0.1 per cent, supported overall by a further rise in US Treasury yields that suggests an upbeat outlook for the world's largest economy. 

In a note to clients, however, strategists at Citibank said the dollar rally would not last long, citing the US budget deficit, which is projected to balloon to more than $1 trillion in 2019. That would contribute to a 5 per cent drop in the dollar index over the next 12 months.

In the week ahead, investors are looking to Wednesday's release of minutes from the Federal Reserve's latest monetary policy meeting for clues about the pace of the current tightening cycle.

ZURICH — Switzerland's government has requested a report into the risks and opportunities of launching its own cryptocurrency, a so-called "e-franc" that would use technology similar to privately-launched coins like bitcoin but have backing of the state.

The lower house of the Swiss parliament must now decide whether to back the federal council's request for a study into the subject that has already been discussed in Sweden.

Cryptocurrencies have drawn scrutiny from lawmakers and international governing bodies coming to grips with the technology's rapid ascent. The coins use encryption and a blockchain transaction database designed to enable anonymous transactions which do not require centralised processing.

Several countries have begun evaluating the viability of introducing their own state-backed digital currency, with Sweden's Riksbank saying an e-crown might help counteract issues arising from declining cash use and help make payment systems more robust. 

But existing digital currencies such as bitcoin have been hampered by extreme volatility, high-profile hacks and doubts about long-term viability. Venezuela has issued a state-backed coin, but major developed economies have so far steered clear.

The Bank of International Settlement in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies. 

In Switzerland, if the proposal is approved, a study will be produced by the Swiss finance ministry. No timing has been given on when it would be published should the go-ahead be given.

Swiss lawmaker Cedric Wermuth, vice president of the Social Democratic Party, called for the study. In its response on Thursday, the Swiss government, or federal council, backed the proposal to look into it, although it said there were hurdles.

"The federal council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc," it said. "It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc."

CARACAS — US-based cereal maker Kellogg Co. on Tuesday pulled out of Venezuela due to the country’s deep economic crisis, and an angry President Nicolas Maduro said its units would be taken over and given to workers. 

Kellogg confirmed later on Tuesday that its manufacturing plant had been seized by the leftist government, the latest company to jump ship amid Venezuela’s tough business climate.

“I’ve decided to hand the company over to the workers so that they can continue producing for the people,” Maduro said at a campaign rally ahead of Sunday’s presidential election. 

“We’ve begun judicial proceedings against the business leaders of Kellogg’s because their exit is unconstitutional,” Maduro added to cheers from red-shirted supporters.

Maduro blames Venezuela’s crisis on an “economic war” he says is waged by Washington, greedy businessmen and coup-mongers.

Kellogg announced its retreat earlier on Tuesday, making it the latest multinational to exit the oil-rich country, which is heaving under hyperinflation and strict price controls.

“The current economic and social deterioration in the country has now prompted the company to discontinue operations,” Kellogg said in a statement, noting that it had already written off the value of its Venezuela holdings.

The company’s local operations had around 400 workers, according to local media. 

Kellogg did not specify the difficulties it was facing in Venezuela, but companies have typically been struggling to find raw materials due to product shortages and currency controls that crimp imports. Maduro’s government also stops companies from raising prices to keep up with hyperinflation, sometimes forcing companies to sell below the cost of production. 

Other multinational companies that have given up on the OPEC country, abandoning assets or selling them cheap, include Clorox , Kimberly-Clark, General Mills, General Motors and Harvest Natural Resources.

Socialist Maduro has taken over the factories of some companies that have left the country. In 2014, authorities took over two plants belonging to US cleaning products maker Clorox Co. after its departure.

“This reminds me of the Clorox case,” opposition lawmaker Jose Guerra tweeted about Kellogg. “Operations halted due to lack of raw materials, the government took it over, and now it’s paralyzed.... So that means Corn Flakes are over.” 

Kellogg warned against sales of its products or brands in Venezuela. 

“Kellogg is not responsible for the unauthorized use of the commercial names and brands that are the property of the company and will exercise legal actions available as necessary,” the company said, adding it would like to return to Venezuela in the future. 

GENEVA — China accused the European Union on Tuesday of risking a return to the "law of the jungle", telling a dispute hearing at the World Trade Organisation (WTO) that it was astonished by what it called the EU's disregard for the WTO's rulebook. 

China's made its allegation during a dispute which some trade lawyers see as the most divisive piece of litigation in the WTO's 28-year-history, pitting China's claim to be treated as a market economy versus EU and US claims that it does not deserve such treatment since it does not trade fairly.

China told the confidential dispute hearing that it placed extraordinary emphasis on the case, which was of critical importance — legally, economically and politically.

Its case against the EU, and a parallel dispute against the United States, is based on a promise enshrined in China's 2001 WTO membership agreement: that after 15 years Beijing would be granted "market economy" status.

"The EU's effort to rescind the promises it made, and the legal obligations it undertook, makes one wonder, is it a real role model for the rule of law, or does it disavow its obligations when politically expedient?," China's representative asked. 

"It also makes one wonder, is the WTO really a rules-based organisation, or just a club where powerful traditional members can bend the rules?"

The dispute centres on the use of anti-dumping tariffs, which are used to punish foreign goods being sold at unfairly cheap prices.

China said it was astonished by the blunt manner in which the EU was trying to revive their discriminatory use, considering that the agreement was "recorded in black and white".

"Besides enjoying no basis whatsoever in the treaty, the EU's argument would open a Pandora's Box," China said.

"The multilateral anti-dumping disciplines that have been gradually formed and strengthened over many decades will be shattered in one single dispute. The world trading environment will return to the law of the jungle."

Although the EU might single out China for using regulatory action that "distorts" its market, all governments tried to influence economic activity, China's statement said.

"What, after all, is the purpose and function of the EU's own common agricultural policy, if not to influence — some would say distort — markets? Similarly, the US government provides substantial subsidies to the production of corn, influencing the production of downstream food products, including poultry and beef, is this not also government 'distortion'?"

The EU did not immediately make available its arguments in the hearing.