British Chancellor Rachel Reeves heads to her second meeting of European Union finance ministers Friday, where she’ll tell her bloc counterparts that deeper defense financing cooperation is needed “in a changing world.” Reeves is in Warsaw, Poland, where EU finance ministers are meeting under the banner of Ecofin, organized by the Polish finance ministry. Poland currently holds the EU’s six-monthly rotating council presidency, so invited Reeves directly. Against an unspoken backdrop of Donald Trump’s push away from Europe, Reeves will tell her counterparts that the U.K. and EU need to work together on defense funding to provide greater economic and national security. They are likely to discuss the re-arming fund proposed by Brussels, which would see a €150 billion loan program for EU governments to spend on weapons and equipment. In order for the U.K. to be involved in the scheme, it needs a formal defense agreement with Brussels — something held up by a dispute about fishing quotas, among other issues. POLITICO reported last week that the U.K. Treasury has pitched a plan that would allow participating governments to avoid booking the upfront capital cost of military kit in their national budget, which would be of huge benefit to countries with tight spending rules. British officials met select European allies at a discreet dinner in Brussels a couple of weeks ago to discuss plans for the new defense fund. This gathering was also hosted by Poland. “A strong economy needs a strong national defense. That is why the chancellor will be travelling to Warsaw to make the case for deeper defence financing cooperation with our European allies so together we deliver greater economic and national security in a changed world,” a Treasury official said in a statement accompanying the trip. PM Keir Starmer recently upped Britain’s defense spending to 2.5 percent of GDP, the biggest increase since the end of the Cold War. The U.K. has spent the past few weeks pressing for a carve-out from Trump’s tariffs. Friday’s trip signals a renewed focus on the government’s pledge to reset U.K.-EU relations ahead of a wider summit May 19.

BRUSSELS — A defense and security pact being drawn up between the U.K. and the EU will fall apart if Keir Starmer doesn’t make concessions on fishing rights, according to a senior European politician.  Jessica Rosencrantz, Sweden’s EU affairs minister, said it was vital to make fast progress on a formal security agreement with the U.K., especially at a time of heightened tension over Ukraine, as countries rapidly re-arm. Officials on both sides are looking to a summit in May as a moment when such a deal could be signed, at least in outline terms.  But in an interview with POLITICO, the minister said EU member governments were unlikely to sign off on a security deal with the U.K. unless negotiations are also resolved on other “sensitive” issues, including access to British waters for European fishing fleets. A deal on fish would also help in “building trust” between London and Brussels, she added.  “Just to be clear, I think it’s really important that the EU and U.K. work together on defense and security,” Rosencrantz said. “Obviously, there are other sensitive issues as well for many member states which also need to be resolved, fisheries being one.”  Asked if it would be possible to complete a defense pact first and then move onto negotiating fishing rights, she said: “I think we have to find a way where we can do both because we want to move ahead with the defense partnership but for many countries it’s important to solve the other sensitive issues as well. And therefore I think it will be important to take steps also when it comes to fisheries and other topics.”  While behind the scenes officials have let it be known that France in particular is determined to secure more advantageous fishing rights in return for a reset in the U.K.-EU relationship, it is rare for such a senior figure in a European government to publicly make the link between the defense pact and fish.  RESET IN RELATIONS The issue of fishing rights dogged the negotiations over Britain’s departure from the EU and soured relations between London and Paris after the U.K. left the bloc, especially during Boris Johnson’s tenure as U.K. prime minister, when he clashed repeatedly with French President Emmanuel Macron.  British officials had hoped that Starmer’s plan for a “reset” in relations with the EU would get a quick win on security and defense, because the U.K.’s military is still held in high regard across Europe ― and it also has nuclear weapons ― making an alliance attractive. Jessica Rosencrantz, Sweden’s EU affairs minister, said it was vital to make fast progress on a formal security agreement with the U.K., especially at a time of heightened tension over Ukraine, as countries rapidly re-arm. | Martin Bertrand/Hans Lucas/AFP via Getty Images But numerous officials involved in the process say progress has slowed as a result of the question of fishing rights, along with issues such as a proposed youth mobility scheme and border policies for Gibraltar. Negotiations are ongoing with the aim of having an agreed plan ready to show off at a summit in the U.K. between Starmer and the EU’s top brass on May 19.  U.S. President Donald Trump’s decision to downgrade American commitments on European security — and the EU’s plans to boost its homegrown defense industry in response — have added a layer of complexity to the talks on a British deal.  Brussels has proposed a  €150 billion loan program for EU governments to spend on re-arming. The funds should be invested on a “buy more European” basis, according to Ursula von der Leyen, the European Commission president.  But without a formal defense agreement with Brussels, the U.K. will be locked out of the scheme. If a deal is agreed, European governments will be free to use the funding to buy British-made weapons and equipment. “We want the U.K. to be a part of this as well,” said Rosencrantz, the Swedish minister. “We have a joint interest, responsibility, we agree on the matter of supporting Ukraine, on ramping up on defense. We need to work together and it would be very, very good to have a partnership.”  Jon Stone in London and Jacopo Barigazzi in Brussels contributed reporting.

Costas Kadis has a delicate task: protect the health of Europe’s ocean life, while also serving the needs of the fishing industry. Often these two interests are diametrically opposed. A biologist by background, Kadis (we can assume) has a deep understanding of ocean biodiversity. This came across in his response to answers, in which he pledged not to sacrifice ocean health for the short-term interest of the fishing sector. But how exactly does he intend to tread this fine line? That’s a core question members of the European Parliament’s fisheries committee will grill him on today. There’s also another issue hanging over Kadis. As a POLITICO investigation recently revealed, Kadis was Cyprus’ environment minister when the country was being investigated over a waste scandal, in which EU funding was provided for a waste treatment project that the Cypriot government knew could not deliver on its promises. While Kadis was not implicated in the scandal itself, questions remain over his handling of the fallout over the five years that he was environment minister.

BRUSSELS — Keir Starmer and Ursula von der Leyen agreed to hold regular U.K.-EU summits on the future of the cross-Channel relationship. In effect, Brexit talks are back for good. After their first bilateral meeting since Starmer took power, the European Commission president and British prime minister on Wednesday promised a renewed “agenda of strengthened cooperation” between Britain and the EU. They just couldn’t quite say what it was for yet. In a joint statement, the pair pledged to meet again later in the autumn to flesh out exactly what they would negotiate about. They also set the stage for “regular EU-U.K. summits at leader-level to oversee the development of the relationship,” aiming to hold the first of what could be many in early 2025. YOUTH MOBILITY? The British PM previously snubbed Brussels’ offer of a youth mobility agreement, which the Commission views as the price of entry for talks on Starmer’s own priorities like a veterinary agreement with the bloc to ease post-Brexit trade frictions; a security agreement; and the mutual recognition of professional qualifications. Starmer has said he has “no plans” for such a scheme, which some in his government fear looks too much like the return of freedom of movement. But Starmer and von der Leyen dodged the most difficult issues during their meeting at the European Commission on Wednesday, with Starmer telling reporters after the event that “today wasn’t about those individual issues,” but instead setting a framework for discussions. “I firmly believe that the British public wants a return to pragmatic, sensible leadership when it comes to dealing with our closest neighbors, to make Brexit work and to deliver in their interest to find ways to boost economic growth, strengthen our security and tackle shared challenges like irregular migration and climate change,” he said. For now, Brussels is playing it cool. The message from von der Leyen was a familiar one: implement the deals we already have, then we can really talk. Keir Starmer and Ursula von der Leyen dodged the most difficult issues during their meeting at the European Commission. | Nicolas Tucat/AFP via Getty Images “We have a set of solid agreements in place,” she told reporters while standing next to Starmer. “We should explore the scope for more cooperation while we focus on the full and faithful implementation of the withdrawal agreement, the Windsor framework, and the [Trade and Cooperation Agreement].” “Member states want to capitalize on the positive momentum which seems to be there with Labour government in office,” one EU diplomat told POLITICO. “But it’s not enough to simply say one wants a reset, it requires actual work … there can only be a reset if the U.K. moves.” ‘TONE MATTERS’ When pressed on whether his red lines matched his rhetoric of a reset, Starmer told reporters after the meeting: “Tone does matter. Resetting does matter. And that has been a very important part of the message that I have carried into the meeting today: a return to pragmatism, to doing business in a respectful way and in a way which I think will focus on deliverables rather than charging to the nearest camera to use a megaphone.” On the issue of youth mobility, he said: “I have made it clear what our position is and in particular that free movement is a red line. But today wasn’t about those individual issues, it was about the way in which we will conduct those negotiations and the emphasis was on what we can do, not what we can’t do, and on deliverables rather than running commentary.” Diplomats from EU member countries said they also have other priorities, like securing long-term fishing access in U.K. waters and easier cross-channel energy trading. Asked about fishing, Starmer said “that literally was not the nature of the discussion today.” In a joint statement issued after their meeting von der Leyen and Starmer “agreed to take forward this agenda of strengthened cooperation at pace over the coming months, starting with defining together the areas in which strengthened cooperation would be mutually beneficial, such as the economy, energy, security and resilience, in full respect of their internal procedures and institutional prerogatives.”

India’s trade chief Piyush Goyal wore a fresh white shirt and a cheeky smile on a sunny morning in Abu Dhabi in early March. He was surrounded by the world’s top trade diplomats, who feared he was about to undo months of work to restore order to the global trade system. “I need protection. What should I do?” Goyal joked to a couple of reporters the night before, speaking across a barricade covered with fake plants and greenery separating diplomats from reporters at the World Trade Organization’s (WTO) 13th Ministerial Conference. “They’re all complaining against me,” he quipped after whipping the world’s top negotiators at the international trade body into a panic behind closed doors. Goyal’s showmanship and negotiating savvy have made him a weapon for India as it tries to shrug off the shadow of its colonial past and take up its mantle as a global superpower alongside the U.S. and China. POLITICO spoke to current Indian officials and trade advisers, as well as negotiators who have sat across the table from him, to get inside New Delhi’s aggressive negotiating style on the world stage. This week Goyal, who declined to be interviewed for this piece, will turn his attention to bilateral talks with the European Union after they were put on ice for spring elections in India and on the continent. The trade chief, who serves as India’s commerce minister, will also restart negotiations with the U.K. — now under a Labour government — later this fall. But India’s aggressive approach could backfire if New Delhi doesn’t take a more conciliatory stance in talks with its Western partners and at the WTO, some argue. “India is very tough,” Donald Trump said at a campaign event last week, labeling the nation a “very big abuser” in trade.  INFLECTION POINT In the years since Trump derailed its dispute settlement mechanism, and the pandemic ushered in an era of fragmenting supply chains and mounting protectionism, the WTO has struggled to preserve the post-Cold War system that for decades sought to liberalize trade and drive down consumer prices. Indian Prime Minister Modi and Goyal have played no small part in chipping away at the system’s foundations. New Delhi is flexing its economic and geopolitical muscles as the West focuses on the Indo-Pacific and India progresses toward becoming the world’s third-largest economy, forecast to occur by the end of the decade. “The biggest issue at stake is the system itself,” WTO Director General Ngozi Okonjo-Iweala warned in a speech to business leaders ahead of the organization’s March ministerial. “We are at an inflection point. Will we continue to have a reasonably open, integrated and global economy, or will we move toward an increasingly fragmented and divided one?” India is “desperate” for the WTO — which has long operated on the principle of consensus among its 160-odd members — not to become a forum for willing allies to cobble together smaller deals, said Keith Rockwell, a global fellow at the Wilson Center and former chief spokesperson for the WTO. “But that’s the direction it’s heading, and it’s because of them.” India’s aggressive approach could backfire if New Delhi doesn’t take a more conciliatory stance in talks with its Western partners and at the WTO, some argue. | Giuseppe Cacace/Getty Images In Abu Dhabi, Goyal arrived at the cavernous, overly air-conditioned conference center like a rockstar — days late and surrounded by an entourage of aides and Indian media snapping photos of his thousand-watt smile. In the days that followed, he leveraged the WTO’s need for consensus on various issues to New Delhi’s political and economic advantage. For most negotiators, merely preserving the body’s status quo would have been viewed as a success. India’s trade chief wouldn’t let them. SHADOW OF THE PAST For decades, India had been opposed to striking trade deals, reticent to expose its fledgling industry to foreign competitors. That began to change gradually after Modi came to power in 2014, as India secured deals with Australia, the UAE and a small European group. It also started talks with G7 economies, including Canada and former colonial and imperial powers in the U.K. and EU, all desperate to tap into India’s booming economy and young, dynamic population. “India is at an inflection point in its growth,” B.V.R. Subrahmanyam, Modi’s former commerce secretary and now CEO of the state-backed public policy think tank NITI Aayog, told investors in London earlier this month. “We have reached a point where we’ve licked the problems of the past,” Subrahmanyam said. India aims to become a developed nation by 2047, 100 years since its independence from centuries of British colonial rule, he said. To get there, Indians have to “liberate ourselves from the slavery mindset,” Modi told the nation in a speech on its 76th Independence Day in 2022 from the ramparts of New Delhi’s Red Fort. He and his Bharatiya Janata Party (BJP) won a historic third term in June campaigning on the promise to shed this “colonial mindset.” Goyal has returned as Modi’s trade chief to make it happen. Like other members of the PM’s Cabinet, Goyal “is much more vocal about the way that India wants to put itself forward,” said a trade adviser to the Indian government, who, like others in this piece, was granted anonymity to speak frankly. Even so, India needs investment from the West to fulfill its vision, Modi ally Subrahmanyam told investors in London. Increasing global protectionism poses “a challenge” to India’s continued growth, he said. Like other members of the PM’s Cabinet, Piyush Goyal “is much more vocal about the way that India wants to put itself forward,” said a trade adviser to the Indian government. | Indranil Mukherjee/Getty Images But India is “not big on open trade,” explained Rockwell. From London to Geneva complaints resound about India’s protectionism — its high tariffs on electric vehicles and alcohol, arcane and complex regulations, loose protection for intellectual property, tight restrictions on the data flows that power financial services, limited access for foreign legal firms and a host of other barriers. “People are now starting to specifically call India out,” Rockwell said. “But will [India] change their views? I have not seen any indication that they will.” TOUGHER THAN TRUMP? Goyal has ignored the pressure. Like Trump, he “is a showbiz personality, and deliberately provocative,” said a former EU official who negotiated with the Indian trade chief for years. “He loves cliffhanging negotiations where he can sabotage and then come to the rescue on a white horse at the last minute,” they said, adding: “He’s done that several times.” Even Trump’s trade chief Robert Lighthizer was stumped when negotiations with Goyal went nowhere, concluding in his 2023 book “No Trade is Free” that “India was just protectionist” and that’s “part of its political DNA.” Goyal is “the toughest negotiator” and “doesn’t like to beat around the bush,” said an Indian official who has worked with him since he first became Modi’s minister of commerce in 2019. “He’s the one who delivers things.” Under his tenure, India achieved a record $778 billion in exports in 2023-24, a small increase on the previous record year. In trade negotiations “there’s a personal bit for Goyal to be seen to succeed,” said a senior U.K. business representative who travels widely in India and has friends in Modi’s party, though “his star within the BJP has been fading somewhat.” Goyal was removed as party treasurer and later had the key railway portfolio taken away from him in 2021. Until June, he was also Modi’s representative in India’s upper legislative body. There was “talk about him becoming the finance minister” in Modi’s new government, the Indian trade adviser said. “But it didn’t happen.” All this has helped make him a driven negotiator who “doesn’t shy away from giving it to the industry, giving it to his officials, giving it to negotiators on the other side,” they said. MODI’S TRADE BULLDOG Goyal’s approach has put Western powers on the back foot. A meeting during trade talks last year opened with him “railing” against colonialism, a senior official from a Western negotiating partner said, noting they weren’t sure if it was part of his strategy. India has sought large concessions in negotiations with the U.K. and EU while offering too little in return, say ministers, officials and business lobbies. “They negotiate for being able to say ‘we negotiate’ but don’t intend to land anywhere, anytime,” Sabine Weyand, the EU’s top civil servant on trade, told a private meeting with the European Parliament this month ahead of the upcoming round of talks, according to a person present. India has instead been using ongoing talks with the EU and the U.K. to apply pressure against plans to tax carbon-intensive commodities at the border — though neither has given in yet. The so-called carbon border adjustment mechanisms (CBAM) will tax steel, aluminum and cement imports made to lower carbon emissions standards than domestic producers from 2026 in the EU and 2027 in the U.K. India is “very concerned” about CBAM, said the Indian trade adviser, noting this has been “communicated in the FTA talks and outside of it.” CBAM and environmental issues “are sensitive things in India,” the senior Indian official who has worked with Goyal said. U.K. Trade Secretary Jonathan Reynolds announced plans to restart trade negotiations with India in the fall. | Leon Neal/Getty Images India’s trade chief has warned the carbon tax “is going to cause the death knell of manufacturing in Europe,” and threatened to challenge the policies at the WTO, even as forecasts indicate India’s production of coal-powered steel will rise by 51 percent by 2030. On India’s red lines Goyal “speaks his mind very clearly,” said the senior Indian official. “That gives him that image of a tough one.” In July, U.K. Trade Secretary Jonathan Reynolds announced plans to restart trade negotiations with India in the fall. But if the newly elected Labour government wants to reopen non-binding labor and environment chapters the deal will become “stuck,” the senior Indian official said. Shortly after U.K.-India talks began in early 2022 New Delhi has been “trying to make the U.K. side look like it’s the one that’s holding things up,” said the senior British business representative quoted above. After Labour won Britain’s election in July, Goyal upped pressure on the new government, saying a deal negotiated with the previous Conservative administration “is ready to be closed very quickly.” WHAT NEXT? India and Goyal’s shtick is wearing thin with some, and its increasingly muscular approach has had missteps. Trade talks with Canada broke down a year ago after Prime Minister Justin Trudeau accused New Delhi of plotting a political assassination in Vancouver, later corroborated by a U.S. Department of Justice indictment. “The international trading community has seen through [Goyal], they’ve seen through his bragging,” said the former EU trade official. “I think that’s not in India’s long-term interest, being extremist and holding up negotiations and priding himself on being an obstacle.” Early this year G7 trade ministers recommitted to efforts to get the WTO’s highest trade dispute court — its Appellate Body — up and running again by the end of this year. Although a long shot, it would be a short in the arm for the rules-based global trading system. While India says it supports this work, Goyal has played the spoiler when it suits, nearly tanking the WTO’s ministerial conference in March. There, he scuttled a long-term ban on taxing digital cross-border trade, and blocked moves to curb India and other states’ farming subsidies, perceived by many as unfair. India also refused to get behind an initiative to facilitate investment in developing countries, a decision the U.K.’s ambassador to the WTO Simon Manley later described to POLITICO as “a real shame.” Manley similarly called India’s opposition to a permanent prohibition on digital tariffs “self-defeating,” branding the idea that they might one day be used to raise meaningful revenues for New Delhi’s coffers “an illusion.” But others wondered whether India’s resistance was part of a broader negotiating ploy. FRUSTRATED By 10 p.m. on Friday, March 1, beleaguered diplomats inside the cavernous exhibition hall in Abu Dhabi thought they had cobbled together a deal to keep the global trade system limping along that India could accept. As WTO Director General Okonjo-Iweala was about to whack her gavel to close the plenary session, Fiji’s deputy prime minister called out Goyal for blocking an effort to curb harmful fishing subsidies, threatening food security. Trade talks with Canada broke down a year ago after Prime Minister Justin Trudeau accused New Delhi of plotting a political assassination in Vancouver. | Kent Nishimura/Getty Images India’s trade chief “was so frustrated” with the criticism, the trade adviser to the Indian government said, “that he picked up his paper and walked straight to the dais to Director General [Okonjo-Iweala] and told her it’s unacceptable.” “Goyal accused Ngozi of trying to bring this issue to the floor for some kind of decision at the last minute after they’d agreed to disagree,” confirmed Rockwell, the former WTO chief spokesperson who, despite retiring in 2022, was briefed on what happened. If Okonjo-Iweala let Fiji’s comments stand, Goyal threatened to sacrifice the consensus and “pull the plug” on a two-year extension to the ban on digital taxes, itself a stopgap measure ironed out by WTO officials after a week of fraught discussions, Rockwell said. The argument wasn’t resolved until 2 a.m. When it was over, former European Trade Commissioner Valdis Dombrovskis told reporters “there was basically just one country that was blocking the deal.” He wouldn’t say who. “Everyone knows who it was,” Rockwell said. Caroline Hug contributed reporting.