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'Challenging' talks expected as Trump, other G7 leaders meet

[May 26, 2017] By Crispian Balmer and Noah Barkin

TAORMINA, Italy (Reuters) - Talks between U.S. President Donald Trump and other leaders of the world's rich nations at the G7 summit on Friday were expected to be "robust" and "challenging" after he had lambasted NATO allies and condemned German trade policies a day earlier.

Trump's confrontational remarks in Brussels, on the eve of the two-day summit in the Mediterranean resort town of Taormina, cast a pall over a meeting at which America's partners had hoped to coax him into softening his stances on trade and climate change.

The summit kicked off with a ceremony at an ancient Greek theater perched on a cliff overlooking the sea where war ships patrolled the sparkling blue waters.

Later, the leaders of Britain, Canada, France, Germany, Italy, Japan and the United States will hold talks on terrorism, Syria, North Korea and the global economy.

"No doubt, this will be the most challenging G7 summit in years," Donald Tusk, the former Polish prime minister who chairs summits of European Union leaders, said before the meeting got underway.

White House economic adviser Gary Cohn predicted "robust" discussions on trade and climate.

Trump, who dismissed human-made global warming as a "hoax" during his election campaign, is threatening to pull the United States out of a 2015 climate deal clinched in Paris in 2015.

Fellow G7 leaders are trying to convince him to stay in. Cohn and other administration officials have said Trump will wait until after the summit to decide.

"This is the first real opportunity that the international community has to force the American administration to begin to show its hand, particularly on environment policy," said Tristen Naylor, a lecturer on development at the University of Oxford and deputy director of the G20 Research Group.

'VERY BAD'

The summit, being held near Europe's most active volcano, Mount Etna, is the final leg of a nine-day tour for Trump which started in the Middle East.

On Thursday in Brussels, with NATO leaders standing alongside him, he accused members of the military alliance of owing "massive amounts of money" to the United States and NATO -- even though allied contributions are voluntary.

The remarks went down badly with European leaders, who had hoped Trump would use the opportunity to confirm his commitment to Article 5, the core NATO principle that an attack on one member is viewed as an attack on all.

"When an American president cannot commit clearly to Article 5 at a time when everyone is expecting him to do this then there is the risk that Moscow interprets this as meaning it is no longer valid," said Jan Techau of the American Academy in Berlin.

According to German media reports, Trump also condemned Germany for "very bad" trade policies in a meeting with European Commission President Jean-Claude Juncker, signalling he might take steps to limit sales of German cars in the United States.

Juncker called the reports in Spiegel Online and Sueddeutsche Zeitung exaggerated, saying that while Trump had talked about Germany's trade surplus as a problem, he had not done so aggressively.

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Italy's Prime Minister Paolo Gentolini (R) talks to Canada's Prime Minister Justin Trudeau (L), German Chancellor Angela Merkel and U.S. President Donald Trump while posing for a family photo at the start of G7 Summit at Greek Theatre in Taormina, Sicily, Italy, May 26, 2017. REUTERS/Jonathan Ernst

Trump, asked by reporters in Taormina whether he had accused Germany of being "very bad" on trade, did not respond.

Trump is attending his first major international summit but it not the only G7 newcomer. French President Emmanuel Macron, Italian Prime Minister Paolo Gentiloni and British Prime Minister Theresa May will also be attending the elite club for the first time.

May is expected to leave a day early, following Monday's suicide bombing at a concert in northern England that killed 22 people carried out by a suspected Islamist militant of Libyan descent who grew up in Britain.

G7 leaders were expected to issue a separate statement on terrorism on Friday, before issuing their formal communique on Saturday. Italian officials have suggested the final communique will be shorter than 10 pages. At the last G7 summit in Japan it totaled 32 pages.

RUSSIA CLOUD

Italy chose to stage the summit in Sicily to draw attention to Africa, which is 140 miles (225 km) from the island at its closest point across the Mediterranean.

More than half a million migrants, most from sub-Saharan Africa, have reached Italy by boat since 2014, taking advantage of the chaos in Libya to launch their perilous crossings.

Italy is eager for rich nations to do much more to help develop Africa's economy and make it more appealing for youngsters to stay in their home countries.

The leaders of Tunisia, Ethiopia, Niger, Nigeria and Kenya will join the discussions on Saturday to say what should be done to encourage investment and innovation on their continent.

One country that will not be present is Russia. It was expelled from the group in 2014 following its annexation of Crimea from Ukraine.

Trump called for improved ties with Moscow during his election campaign.

But accusations from U.S. intelligence agencies that Russia intervened in the U.S. election to help Trump, and investigations into his campaign's contacts with Russian officials, have hung over his four-month-old presidency and prevented him from getting too close to Moscow.

On Thursday, the Washington Post and NBC News reported that Trump's son-in-law and adviser Jared Kushner was under scrutiny by the FBI because of his meetings with Russian officials before Trump took office.

Kushner and his wife, Trump's daughter Ivanka, have returned to Washington after accompanying the president for the first part of his first foreign tour.

(Additional reporting by Steve Holland; Editing by Angus MacSwan)

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