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* Trade on Trump's mind as he meets leaders at G20
* China calls for multilateralism, warns against protectionism
* Modi seeks WTO reform, Putin defends Geneva-based body
* Washington seeks to cut U.S. trade deficit with Japan (Adds fresh PM Abe comment, stock market stumble)
OSAKA, June 28 (Reuters) - U.S. President Donald Trump made clear on Friday that trade was his top priority at a summit of leaders of Group of 20 nations, as China's Xi Jinping warned against rising protectionism and India, Japan and Russia defended multilateral trade rules.
Trump, who is holding a series of meetings on the sidelines with world leaders, including Japan's Shinzo Abe and India's Narendra Modi, said he saw U.S. trade prospects improving, days after criticising the U.S.-Japan security treaty and demanding that New Delhi withdraw retaliatory tariffs.
"I think were going to have some very big things to announce. Very big trade deal. Were doing some very big things with India in terms of trade, in terms of manufacturing," Trump said at the start of talks with the Indian prime minister.
Trump, set to hold a high-profile meeting on trade with Chinese President Xi Jinping on Saturday, also made a push to discuss U.S. concerns about Chinese telecoms equipment maker Huawei at his meetings.
Washington has pressed its allies to shun Huawei in their fifth generation, or 5G, networks on security grounds, and has also suggested it could be a factor in a trade deal with Xi.
"We actually sell Huawei many of its parts," Trump said at his meeting with Modi. "So were going to be discussing that and also how India fits in. And well be discussing Huawei."
Asian shares stumbled during the day amid rising doubts that the highly anticipated meeting between Trump and Xi would ease trade tension.
European Commission President Jean-Claude Junker flagged the shadow cast by the U.S.-China trade feud.
"The trade relations between China and the United States are difficult, they are contributing to the slowdown of the global economy," he told a news conference.
Xi also warned about the protectionist steps he said some developed countries were taking.
"All this is destroying the global trade order... This also impacts common interests of our countries, overshadows the peace and stability world wide," Xi told a gathering of leaders of the BRICS grouping of nations on the sidelines of the G20 meet.
DEFENDING WORLD TRADE RULES
Modi at the same meeting called for a focus on reforming the World Trade Organization and Russian President Vladimir Putin decried what he called efforts to destroy the Geneva-based body.
"We consider counter-productive any attempts to destroy WTO or to lower its role," Putin said.
The situation of the global economy was worrying as global trade was feeling the effect of "protectionism (and) politically motivated restrictions," he added.
Trump, who often castigates trading partners on Twitter and in his raucous political rallies, put a positive spin on trade developments with Japan.
"I appreciate the fact that you're sending many automobile companies into Michigan and Ohio and Pennsylvania and North Carolina," Trump told Japanese Prime Minister Abe, referring to U.S. states critical to his effort to win re-election next year.
Trump said the two leaders would also discuss Japanese purchases of U.S. military equipment, although a Japanese official said later the topic did not come up.
Tokyo and Washington are engaged in difficult trade talks as Trump's administration seeks to lower the U.S. trade deficit.
Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer were to meet later in Osaka.
Abe welcomed Trump's visit, calling their frequent meetings "proof of the strong U.S.-Japan alliance".
He later urged G20 leaders to send a strong message in support of free and fair trade, warning that trade and geopolitical tensions were rising and downside risks to the global economy prevailed.
"Today, I want to discuss with leaders measures to further enhance momentum towards reform in WTO," he told them ahead of a working lunch.
Trump renewed his criticism of the U.S.-Japan security alliance this week as unbalanced.
"We will go in and we will protect them and we will fight with our lives and with our treasure," he said in an interview on Wednesday with Fox television.
"We will fight at all costs, right? But if were attacked, Japan doesnt have to help us at all. They can watch it on a Sony television, the attack."
Under the decades-old U.S.-Japan security treaty, the United States has committed to defending Japan, which renounced the right to wage war after its defeat in World War Two.
Japan in return provides military bases that Washington uses to project power deep into Asia.
After the Trump-Abe talks, a Japanese official told reporters the leaders had agreed to accelerate trade talks and had agreed the alliance was stronger than ever. (Additional reporting by Leika Kihara, Kiyoshi Takenaka and Katya Golubkova; Writing by Linda Sieg in Tokyo; Editing by Paul Tait and Clarence Fernandez)