By Danial Azhar

KUALA LUMPUR (Reuters) -Malaysia's Prime Minister Anwar Ibrahim on Monday hailed "significant" steps to engage warring sides in Myanmar, as Southeast Asian leaders met for talks to address the protracted conflict and offset global trade uncertainty from U.S. President Donald Trump's tariff threats.

Myanmar has been in turmoil since its military overthrew the elected civilian government of Nobel laureate Aung San Suu Kyi in 2021, triggering pro-democracy protests that morphed into a widening rebellion and conflict that has displaced more than 3.5 million people, according to the United Nations.

Association of Southeast Asian Nations leaders were expected to discuss ways to jumpstart ASEAN's faltering Myanmar peace process and build on recent efforts by Anwar, the bloc's current chair, to bring rival groups to the table.

Anwar last month held a closed-door meeting in Bangkok with junta chief Min Aung Hlaing and virtual talks with the shadow National Unity Government, describing those on Monday as "significant", but fragile.

"We have been able to move the needle forward in our efforts for the eventual resolution of the Myanmar crisis," he said while opening the summit in Kuala Lumpur.

"I wish to stress that throughout this process, quiet engagement has mattered. The steps may be small and the bridge may be fragile but as they say, in matters of peace, even a fragile bridge is better than a widening gulf."

The junta aims to hold an election later this year, which critics have widely derided as a one-sided sham to keep the military in power through proxies. ASEAN has yet to discuss a common position on the election.

ASEAN's top diplomats held special meetings on Myanmar at the weekend, where Malaysian Foreign Minister Mohamad Hasan stressed a lot of negotiating was needed and said he would visit Myanmar next month.

The ministers agreed to discuss creating a permanent ASEAN envoy for Myanmar, possibly for terms of three years, rather than changing envoys each year, he added.

Thailand's foreign minister last week said he intends to propose broader international engagement with the junta, which remains barred from ASEAN summits over its failure to follow the peace plan.

TARIFF TREMORS

ASEAN leaders will meet Chinese Premier Li Qiang for an economic summit on Tuesday along with counterparts from Gulf countries, at a time of global market volatility and slowing economic growth sparked by Trump's trade tariff threats.

Six Southeast Asian countries targeted by Washington face steep tariffs of between 32% and 49% in July, unless negotiations on reductions succeed.

Anwar said on Monday he had written to Trump requesting a meeting on the tariffs between the United States and ASEAN, a region with a combined gross domestic product of $3.8 trillion.

In remarks ahead of the summit, Philippine President Ferdinand Marcos Jr said ASEAN leaders would compare responses to the tariffs, adding "we must find a way to find consensus amongst the disparate situations that the different member states are operating under".

Marty Natalegawa, an Indonesian former foreign minister, said ASEAN should identify key areas to guide each member country's negotiations with Washington.

"Otherwise, there could be a risk of a lose-lose cycle in our own region," he said.

Also up for discussion is advancing ASEAN's drawn-out talks with Beijing on a code of conduct for the South China Sea, where tensions have long simmered over the activities of China's coast guard in the exclusive economic zones of its neighbours. China says it is operating lawfully in what are its waters.

The most heated confrontations have taken place between China and the Philippines, with Marcos on Monday calling for urgency in completing a legally binding code.

"This is to safeguard maritime rights, promote stability, and prevent miscalculations," he said.

(Reporting by Danial Azhar in Kuala Lumpur; Additional reporting by Karen Lema in Manila and Panu Wongcha-um in Bangkok; Editing by Kay Johnson, William Mallard, Martin Petty and Saad Sayeed)

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