* MSCI Asia-Pacific index down 0.3 pct, Nikkei falls 0.7 pct
* Cohn's departure seen as tilting U.S. towardsprotectionism
* Dollar falls vs yen, Swiss franc; Canada dlr, Mexico pesofall
* U.S. stock futures down more than 1 pct
* Crude oil slips, gold extends rally amid risk aversion
By Hideyuki Sano and Shinichi Saoshiro
TOKYO, March 7 (Reuters) - Global stocks and the dollarslumped on Wednesday after a key advocate for free trade in theWhite House resigned, fanning fears that President Donald Trumpwill proceed with tariffs and risk a trade war.
White House economic adviser Gary Cohn, seen as a bulwarkagainst protectionist forces within the Trump administration,said on Tuesday he was leaving. 500 futures ESc1 dropped more than 1 percent and setthe downbeat tone for Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.3 percent, while Japan's Nikkei .N225 retreated 0.7 percent.
Australian stocks .AXJO fell 1.1 percent, Hong Kong's HangSeng .HSI slipped 0.4 percent and China's blue-chip CSI300index .CSI300 was flat.
"If you're looking for an excuse to sell, this is the kindof announcement that certainly causes short-term downwardpressure," said Rick Meckler, president of investment firmLibertyView Capital Management in New Jersey, regarding Cohn'sresignation.
"He (Cohn) came from Wall street and certainly largeinstitutional investors felt he was very credible in his spot."
South Korea's KOSPI bucked the trend and edged up 0.2percent amid a perceived easing of regional tensions, followingnews on Tuesday that South Korea would hold its first summitwith the North in more than a decade.
Cohn's resignation, however, poured cold water on a recoveryin risk appetite in wider markets that followed news of theKorean talks.
In currency markets, the dollar fell as much as 0.6 percentto 105.45 yen JPY= , near its 16-month low of 105.24 touched onFriday.
The dollar had risen to 106.470 on Tuesday amid speculationthat Trump could be coaxed into watering down or holding off onthe tariffs.
Against the Swiss franc, the dollar also shed 0.4 percent to0.9368 franc CHF= , while the euro edged up 0.1 percent to$1.2420 EUR= .
Against a basket of major currencies .DXY , the dollardipped 0.2 percent.
"The worst outcome for financial markets, in terms ofpotential to create volatility, would be a confirmation ofrising trade friction and benign neglect of the dollar in theshort term," said analysts at ANZ.
The Canadian dollar and the Mexican peso retreated as Cohn'sdeparture was seen as raising risks Washington could walk out ofNAFTA.
The Canadian dollar fell 0.4 percent to C$1.2929 per dollar CAD=D4 while the Mexican peso dropped 0.4 percent to 18.82 tothe dollar MXN=D2 .
Commodities also fell on worries that trade frictions couldslow global growth.
Brent crude futures LCOc1 surrendered the previous day'sgains to drop 0.8 percent to $65.27 per barrel. O/R
London Metal Exchange copper CMCU3 lost 0.3 percent to$6,981.50 per tonne, paring a 1.4 percent gain from the previoussession. MET/L
Spot gold XAU= , on the other hand, stretched the previousday's rally and touched $1,340.42 an ounce, highest since Feb.26.
Other perceived safe havens such government bonds also faredwell. U.S. Treasury debt prices rose and as a result the 10-yearbenchmark note yield US10YT=RR declined about 2 basis pointsto 2.859 percent.