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UPDATE 1-G20 heads to stop short of denouncing protectionism in communique - Nikkei

Leika Kihara

Nikkei@

* G20 leaders to agree on need for WTO reforms - govt official

* Communique to omit language on protectionism - Nikkei

* Japan proposing line on 'free, fair, non-discriminatory' trade (Adds quotes, detail)

OSAKA, June 29 (Reuters) - Group of 20 leaders will agree to accelerate World Trade Organization (WTO) reforms but stop short of calling for the need to resist protectionism in a communique to be issued on Saturday, the Nikkei newspaper said.

The gathering of the heads of the world's biggest economies has been overshadowed by a high-stakes meeting scheduled on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping to salvage their trade talks.

In preparing the G20 communique, Japan, the chair of the meetings, has sought common ground between the United States, which opposes language denouncing protectionism, and other nations seeking a stronger warning against trade tensions.

The G20 members broadly agreed on the need to accelerate stalled WTO reforms in Friday's session on global growth and trade, a Japanese government official told reporters.

Given the raging U.S.-China trade war, however, delegates will forgo adding a line in the G20 communique calling for the need to resist protectionism, the Nikkei reported Saturday.

Instead, Japan is working with other G20 nations to urge members to promote a "free, fair and non-discriminatory" trade policy, the paper said. The proposal has been endorsed by several members already, it said without citing sources.

The G20 leaders will release the communique after they wrap up their two-day meeting on Saturday.

It will be the second straight G20 summit in which members forgo pledging the need to denounce protectionism. The language on protectionism was removed at last year's summit in Buenos Aires, nodding to a request by Washington which is sensitive to criticism of the tariffs it is slapping on some G20 members.

Widening fallout from the U.S.-China trade war has jolted markets and tested the resolve of G20 members, whose leaders are meeting in the western city of Osaka, to present a united front in averting a global recession. (Reporting by Leika Kihara Editing by Chang-Ran Kim and Tom Brown)