EU sees global trade tensions dominating G20 summit

By Jan Strupczewski

BRUSSELS (Reuters) - Trade tensions between the United States and China are likely to dominate the G20 summit of the world's 20 biggest economies next week, according to a senior European Union official who said the EU was keen to act as a bridge-builder.

The United States and China have been imposing tariffs on each others goods in an escalating dispute over market access, forced technology transfer, intellectual property rights and state subsidies to certain sectors that distort competition.

The European Union, Canada and Japan are also involved because of U.S. tariffs on steel and aluminium products imposed by Washington earlier this year.

"The success of the G20 summit this year will be measured by its capacity to de-escalate the current trade tensions," the EU official, involved in preparations for the talks, said.

The official said the EU shared many of the United States' concerns over China's trade practices, but favoured a different approach. While Washington pursued unilateral actions, the EU wants to deal with them in the World Trade Organisation.

The United States is sceptical, saying the WTO is not equipped to deal with the new trade challenges.

"The aim of the EU is to really now engage in the reform of the WTO, to provide political impetus through the G20 for the reform and get an update on progress at next year's G20 summit under the Japanese presidency," the official said.

He said G20 leaders would not negotiate the new WTO rules, but should show their ministers and negotiators the topics and direction where change was needed.

The EU will push for the G20 final communique to uphold previous commitments to keep markets open, fight protectionism and to support the multilateral trading system, the official said, adding the EU also wanted the issue of excess global steel capacity addressed.

"We (also) want to have the fight against climate change recognised in the declaration as we have done last year," he said.

"There is one particular country, the United States, which has a different approach on this. We will maintain our commitment in order to have a strong paragraph on this and an effective implementation of these agreements."

(Reporting by Jan Strupczewski; Editing by Robin Pomeroy)