* EU is biggest trading entity and has most to lose
* Opportunity to take lead in world trade policy
* Business group calls for strategic focus in EU trade
By Jonathan Lynn
GENEVA, Jan 14 (Reuters) - The European Union must streamline its trade policy and take the lead in reaching a new global trade deal, a Brussels think-tank said on Thursday.
A forthcoming report by the European Centre for International Political Economy (ECIPE) argues the EU should concentrate on a few strategic priorities rather than long wish lists in trade.
"Unwinding protectionist measures and restoring growth in the global economy should be the prime focus now for European trade policy," the Brussels group said in a report by its EU Trade Policy Study Group, to be published later on Thursday.
The group, chaired by Erik Belfrage, senior vice-president of Swedish bank SEB, comprises executives from European and U.S. companies including Ericsson, Nokia, Nestle and IBM.
As the world's biggest trading entity, EU external trade outstrips that of both the United States and China, the European Union has a strong interest in the health of the global trading system, ECIPE said.
World Trade Organisation statistics show that EU trade, excluding flows among its 27 members, accounted for 16 percent of total world exports and 18 percent of imports in 2008.
ECONOMIC GAINS NOT CONCESSIONS
The EU's new Lisbon Treaty, designed to speed up the bloc's cumbersome decision-making processes, provides an opportunity for the European Union to show leadership in world trade.
The report is issued as the European Parliament holds approval hearings with officials nominated to be members of the group's executive commission.
As the trading power with the most to lose from any damage to the global commercial system umpired by the WTO, the European Union should take the lead in pushing for a deal in the WTO's long-running Doha round to open up world trade, ECIPE said.
Besides agriculture, where many members aim to protect their farmers, the EU has no reason to block a Doha deal, it said.
After a Doha deal, the EU should aim for negotiations with groups of countries in areas offering the biggest economic gains, such as electronics, it said.
Brussels should also pursue bilateral trade deals with major partners such as the United States, China and Japan, as well as non-WTO member Russia, as such deals can lead to increased trade when both parties are significant players, it said.
ECIPE listed the following priorities for EU trade:
* Eliminate tariffs in key sectors in Europe and major trading partners.
* Reduce "non-tariff barriers" -- standards and regulations that can be abused to block imports.
* Improve investment agreements to give EU firms better protection for foreign investments and make it easier for foreigners such as sovereign wealth funds to invest in Europe.
* Better protection of intellectual property rights to foster research and investment.
The study warned European politicians against using protectionism to help local companies, arguing that rising living standards in Europe in recent years had been due largely to specialisation and taking advantage of trade opening.
"Without trade -- and without a growing import of goods from countries with lower labour costs -- it would be impossible for Europe to expand its wealth and move higher up in the value-added chain," it said. (For full report go to www.ecipe.org/tpsg ) (Editing by Stephanie Nebehay and Jon Hemming)