* MSCI Asia-Pacific index down 0.3 pct, Nikkei falls 0.7 pct
* Cohn's departure seen as tilting U.S. towards protectionism
* Dollar falls vs yen, Swiss franc; Canada dlr, Mexico peso fall
* 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 dollar slumped on Wednesday after a key advocate for free trade in the White House resigned, fanning fears that President Donald Trump will proceed with tariffs and risk a trade war.
White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration,said on Tuesday he was leaving. 500 futures ESc1 dropped more than 1 percent and set the 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 Hang Seng .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 kind of announcement that certainly causes short-term downwardpressure," said Rick Meckler, president of investment firm Liberty View Capital Management in New Jersey, regarding Cohn's resignation.
"He (Cohn) came from Wall street and certainly large institutional 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, following news on Tuesday that South Korea would hold its first summit with the North in more than a decade.
Cohn's resignation, however, poured cold water on a recovery in risk appetite in wider markets that followed news of the Korean talks.
In currency markets, the dollar fell as much as 0.6 percent to 105.45 yen JPY= , near its 16-month low of 105.24 touched on Friday.
The dollar had risen to 106.470 on Tuesday amid speculation that Trump could be coaxed into watering down or holding off on the 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 dollar dipped 0.2 percent.
"The worst outcome for financial markets, in terms of potential to create volatility, would be a confirmation of rising trade friction and benign neglect of the dollar in the short term," said analysts at ANZ.
The Canadian dollar and the Mexican peso retreated as Cohn's departure was seen as raising risks Washington could walk out of NAFTA.
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 to the dollar MXN=D2 .
Commodities also fell on worries that trade frictions could slow global growth.
Brent crude futures LCOc1 surrendered the previous day's gains 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 previous session. MET/L
Spot gold XAU= , on the other hand, stretched the previous day's rally and touched $1,340.42 an ounce, highest since Feb.26.
Other perceived safe havens such government bonds also fared well. U.S. Treasury debt prices rose and as a result the 10-yearbenchmark note yield US10YT=RR declined about 2 basis points to 2.859 percent.