Trade and horse-trade: Top five hot-button G20 issues

OSAKA, JAPAN: Global trade, geopolitical hotspots and even horse-trading over top EU jobs: G20 leaders have a lot of their plate when they meet from Friday in Osaka.

Here are some of the most pressing issues facing the leaders at the two-day meeting, with the decisive action likely to take place mainly on the sidelines.

All eyes will be on whether the US and China, the world's top two economies, can bury the hatchet in their long-running trade war that is causing headwinds for an already fragile global economy.

The two leaders, Donald Trump and Xi Jinping, will hold talks on the sidelines of the Osaka summit, their first face-to-face meeting since December at the last G20 in Argentina.

G20 summit officially opens in Japan's Osaka

Experts are sceptical that a definitive deal will be struck in Japan, but many believe they may agree on a tariff truce and set a new deadline for a final agreement.

Trade will also feature heavily as a point of conflict in the wider G20 meeting with battles likely over the wording of the final statement - if the leaders can agree on one.

A G20 finance ministers meeting earlier this month noted in a communique that trade tensions had "intensified" and that risks were "tilted to the downside", but even this statement took 30 hours of hard-fought wrangling.

Relations between the United States and North Korea have been in the freezer since a summit in Hanoi in February failed to achieve progress on Pyongyang's nuclear programme.

But a recent exchange of letters between Trump and North Korean leader Kim Jong Un has raised hopes that a third summit could be on the cards, and the US president is travelling to South Korea immediately after the G20.

Xi arrives in Osaka fresh from his first visit to Pyongyang and observers expect he may pass on a message from Kim to rekindle diplomatic activity.

With key regional players such as the United States, Saudi Arabia and Russia in attendance, the mounting tensions with Iran are certain to be a hot topic of conversation.

The G20 host, Japanese Prime Minister Shinzo Abe, sought to play a mediation role with a historic trip to Tehran, but this was overshadowed by two attacks on tankers in the Gulf of Oman that Washington blames on Iran.

At the last moment, Trump called off a planned military retaliation for the downing of an unmanned US drone, saying that the estimated death toll of 150 was not proportionate.

And on Friday, he said there was "no rush" to calm tensions with Iran.

"Hopefully in the end it's going to work out," he added.

EU President Donald Tusk warned that the tensions were a "serious concern" and urged Iran to comply with a nuclear deal despite Washington's decision to withdraw from it.

Hosts Japan are hoping to achieve consensus on the increasingly contentious issue of climate change action.

But they will struggle to unite European leaders like French President Emmanuel Macron, who has said he wants to see ambitious language on climate change action, and Trump, who plans to withdraw Washington from the Paris climate agreement.

Macron has said including a reference to the Paris deal on lowering emissions is a "red line", and a German government source admitted negotiations are "particularly difficult this year".

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Last year's G20 communique saw all members but the US refer to the Paris deal as "irreversible", with Washington inserting a line reiterating its commitment to withdrawing from the agreement.

After failing to agree a deal for the successor to European Commission President Jean-Claude Juncker at a summit on Friday, EU leaders have kicked the can down the road to a special meeting in Brussels on June 30.

But Tusk confirmed on Friday that conversations would continue with top EU leaders at the G20, adding that he had held "12 or 13 phone calls" with other EU players.

"What I feel is that we are closer to the solution but still too far to say something more concrete today."