 Good morning, and a warm welcome to the seventh meeting of the Constitution, Europe, Exxon, Affairs and Culture Committee in 2024. First agenda item is a decision taking business in private. Our members are content to take item 4 in private. Thank you very much. Our second agenda item is for the committee to choose a deputy convener. The Parliament has agreed that only members of the Scottish Conservative Unionist party are eligible for nominations as deputy convener. I understand Alexander Stewart. MSP is the party's nominee. Does any member disagree with this nomination? Thank you very much. I congratulate Alexander Stewart on his appointment as deputy convener of the Constitution, Europe, Exxon, Affairs and Culture Committee. A agenda item 3 is our on-going review of the EU-UK trade co-operation agreement inquiry. We are joined virtually this morning. I wonder if I could ask our panel to introduce themselves if we go to Yanukkah first. Yes, good morning. Thank you for the invitation. My name is Yanukkah Mahalbiak and I'm a researcher at the UK in a changing Europe in time. Thank you and Joel. Good morning, everyone. I'm Joan Alvarone. I'm a research associate at the UK in a changing Europe. I'm very warm welcome to you both. Thank you very much for the report, which the committee had all been made aware of before today's session. I'd like to ask a couple of questions about the report. You suggest that there are two key factors that shape the TCA review. One is political will, which we talk about quite a lot in this committee, and the other is the process of how the review will take place. Which do you think is the more dominant in terms of how things are likely to go going forward given the election cycles and everything else? Yanukkah, do you want to go first? Yes, sure. I think at the end of the day, the politics will probably shape the process, so I think that the politics are the more important factor. If you look at the review clause in the TCA, the wording is very vague, so it is really up to the two parties to decide how they want to conduct the review. All that we know is that it is a review of the implementation of the agreement and not the agreement itself. We know the timing, which is 2026, so five years after entry into force of the agreement. We know that there is no agreed process, so I think the process is going to be important. Our report outlines three options of how the review could unfold potentially. I think that in terms of choosing one of those options, the politics is going to be very important. Jewel? I agree with Yanukkah ultimately about the politics. We have the broad outlines that a review could take, but it is up to both sides jointly to agree that is the key point. There needs to be an agreement on it, so it is about where you can find a political middle ground. I think it is also worth saying that the review is only as useful as either side wants it to be. If you have a scenario where both the UK government and the European Commission both want to quite substantively review the terms of the TCA, they do not have to use the review. There are a number of different ways that you could go about it. You could just add hot, pursue agreements to deepen what you have or to add new elements to the agreement. The review is as useful as either side wants it to be. You could say, we are going to take this point in 2026 as a political moment, so to speak, around which we are going to structure our negotiations, but it does not have to be done that way. It feels at the moment like the review is being used in political discourse as a way to point to the future horizon, a particular party saying we want to deepen the relationship and we have this review as an opportunity, but no one has really thought about the details. So it is still a political instrument for demonstrating well and no one has really got to the point of thinking, okay, if we do want to go deeper, do we need to use the review or do we want to pursue it through other forms? I guess what we saw after the winter agreement was that some of these issues were resolved in terms of horizon funding and things like that. Exactly as you said, Joe, it does not have to be waiting for the review or part of that process, as it is written. We had the farming sector in last week, and they think that trying to resolve the SPS issue in veterinary agreements will be quite time-consuming and quite difficult to do. You mentioned Brexit fatigue in the report a few times. Do you think that some of the big substantive issues that are still a key concern, certainly from the UK point of view, do you see any of those having traction in Europe going forward before the review cycle? Do you mean on SPS specifically? SPS is an example, so that is one of the areas that is a real concern here, but it may not have any traction in terms of what is happening in Europe. The point that we make clear in the review is that, for the most part, the EU is quite satisfied with the agreement as it is. The trade friction, which is being created by the TCA, falls more heavily on the UK because it is more dependent on the EU market than vice versa. European businesses can divert their trade to other parts of the single market where they do not face these various trades. There is more incentive for the UK to try and gain new elements such as an SPS agreement, which then comes back to the point about why it is the review as something that both parties have to take part in. I think for the UK to get the EU to listen to these things, it needs to think about incentives because we have heard a lot about what the UK wants, the potential additions, deep things which could take place, but how do you bring the European Union to the table? You need to give them something that they are also interested in negotiating. The two most obvious examples are a mobility agreement, where we know that that is a point of quite significant regret for a lot of member states that their young people can no longer easily come here to study or to work or to live, and also a foreign security agreement because the UK is quite a significant player on that front. It is an issue which has risen in salience over the past couple of years since Ukraine. That is also potentially an argument for using a review because if you want to make trade-offs, if the UK says that we would like an SPS agreement, it needs to offer something else in return. If you pursue an SPS negotiation in isolation, there is less incentive for the EU to conclude it, as if you say that this agreement is contingent upon us also finalising the terms of mobility agreement. That is one of the strongest arguments for having some kind of review slash structure negotiation rather than just ad hoc pursuing individual amendments to the TCA. They have lots of other pressing issues, and they also have their own elections this year, which I think even though we have said any kind of amendments or even additional negotiations don't have to wait for the TCA review, I think the caveat is that this year I think it's going to be very difficult to have any of those discussions, even if you have a new UK document that wants to have those discussions. But just given the fact that you have European Parliament elections in June and then afterwards quite a lengthy process of reorganising the institutions and finding new leaders for the top jobs. And if you look at how they go about it when it comes to the European Commission, which at the end of the day manages the day-to-day relationship with the UK, you usually have hearings of commissioners throughout October. And last time I think the new commission was in place only at the end of November 2019. So I think that will make it very difficult to have any substantive discussions this year, which then probably leads us to 2025 until those discussions can take place. I also agree with Joelle that the UK needs to think carefully about incentives because the EU published its annual TCA implementation report last year in March, which states that this is a very good agreement for the EU, and they are fairly happy with it. And I think another factor is that this very carefully balances the interests of 27 member states. So to reopen that and risk upsetting this balance between the 27 is difficult for the EU. Also, particularly when it comes to the trading agreement in the TCA, once you kind of go back into those discussions, you have 27 individual economic interests, which will have to be balanced. So I think that's why the incentives for the EU at the moment are low. When it comes to the SPS deal in particular, I think another kind of important point to keep in mind is that as long as the UK has not yet fully implemented border controls at the UK border, the incentive for the EU is quite low in this area. Because whilst UK farmers have had to deal with border controls since January 2021, this has not been the case for EU farmers due to delays on the UK side. Of course, we know that physical controls are going to be implemented from the end of April, so fairly soon. So it's going to be interesting to see how that goes and whether that goes ahead as planned. Because I think if once the EU side kind of experiences those border controls, there might be more than incentive for them to have a discussion about an SPS deal as well. I want to come to questions from the committee. I'll go to Mr Rascal, then Ms Forbes. I want to ask you about your views on the carbon border adjustment mechanism. Reading your report, there is an option here for both the UK and the EU ETSs to come into greater alignment, but it would be useful to get your views on what the current challenges are and whether those two emissions trading schemes are currently moving apart from each other in terms of carbon price. So how easy would it be to bring them together practically? I don't know who would like to go now. I think Jo, you're nodding. Yeah, I'm happy to go. So the kind of immediate answer is in some senses it's relatively easy, kind of the UK relative to other countries in the world, but in another sense it's still difficult because this is not a simple negotiation, it's a technical negotiation. So to deal with the easy point first, you know, the UK was for me part of the EU's emissions trading scheme, and so it's emissions trading scheme to a large degree resembles the EU's in terms of its scope and kind of ways of working. There's been some divergence in price. It was significant for a while, although it's now narrowing again. So, you know, relative to most countries in the world, the UK is actually quite highly aligned, although to an extent that is evolving because both sides are updating their schemes over time and the EU is looking to bring in new elements around transport maritime emissions. And so it will over time, though, diverse to a greater extent. So there's an incentive to, if you want to align to do it sooner rather than later before the differences become too significant. But then the more difficult part is, even if both sides sit down and say, OK, we want to try and link our emissions trading schemes, which the TCA does give them not to as a possibility, it's still a technical process. I invite you to read a article on our website, which was written in September 2023 by Sam Lowe, I believe, which explains in more detail how this could work. But there's more than one option about how you link schemes. You can have kind of full alignment where the UK effectively would have to accept quite a large degree of sort of EU autonomy over how our own emissions trading scheme would be working, what you do with the revenues which are generating and so forth. So it's politically potentially there. There's a challenge around how much sovereignty you're giving up and how much alignment you have to take with EU regulations. Or you can have more of a partial linking where you have distinct markets, but you have kind of fluidity of credits between the two. That potentially is your less interlinked and so potentially doesn't bring you as many benefits, but it's perhaps easier to conclude. Either way, it's going to be politically quite a difficult discussion and also technically quite a tough discussion to conclude. So there's a clear potential benefit to this. You would avoid the bureaucracy and the tariffs, which could be levied under the EUC band. So there's a strong incentive for traders to have that linking, but a lot of work would have to go into it from UK government. In terms of timescale for that, I think you indicated that it took 10 years for Switzerland to strike a similar agreement to link the two ETSs together. I mean, it feels like only yesterday we were in the EU ETS, so would it really take 10 years to conclude a negotiation on this? Or would it be a lot quicker given the current alignment that we have? It could be a lot quicker. I mean, with the EU political will is always an important thing. Part of the reason why it took 10 years is not because there was 10 years of administration to work through it. It's also to do with the politics around that and you can look at the EU's other agreements with Switzerland, which are constantly being turned on and off. It's quite a fraught relationship as well that they have there. So if there was good political will and good political relations on both sides, you could expect that to be a lot quicker. I think that 10-year example is expectation management, to a certain extent, saying this is how long it can take, but it can also be a lot quicker. Again, because the UK was in the system, that was previously in the ETS, that's another reason why it could go faster. Of course, potentially there's an incentive for the EU to get this concluded as well if the UK introduces its own seabam around the same time. I think that 2027 is currently in March as the dates through their businesses are suffering from the UK seabam. That's another reason to get ETS linkage done. OK, and how much of a kind of lobby do you think there is from particular sectors that would be disadvantaged by the seabam? I mean, are we seeing in Brussels a particular drive for sectors where they're going to see huge costs imposed on export to the EU? Or are they not sure where the political drive is for this to be a priority? Yeah, so my understanding is, I think there was a study done saying about 6% of UK exports by value, I think would be subject to the EU seabam as it stands. There's an article by Peter Foster in The Financial Times last Thursday about this in his weekly column of yours. And I think the sectors that are likely to be particularly effective are steel. I think steel is probably the one that's most vulnerable to the effects. There are some others as well. Obviously, I think steel is the biggest one within that. And so that's where the steel sector has actually already come out and criticized the UK government for being too slow in implementing its own seabam. So there's clearly an active process ongoing with that industry in particular. OK, thank you. Thank you, Kate. Thanks very much, and welcome. I have a question about the evidence base, as it were, that would sort of advise on the nature of any review. And you obviously emphasise this in your report, and it's pretty obvious to all that I've been watching the evolution of the TCA, that there's a massive tension between political imperative and what politicians feel under pressure to do, nearly always by their own voting base, versus what a sort of general civic position might be on the best way to drive reforms. I think horizon came out of that, but equally wouldn't have happened without political pressure. And obviously, next this year is a big year from a political perspective, but I just wondered yourselves where you see the potential for the evidence base itself informing change versus straight-up politics. And I guess the second part to that is we have spoken to various stakeholders as you will have also, and if we take the farming agriculture community, they'll have a list as long as their arms of changes that they want to see. But I guess, from your perspective, what do stakeholders like that feel they need to do in order to progress those changes? Is it developing evidence, or actually is that moot and irrelevant because at the end of the day it would lead political pressure? Sorry, that was almost an essay of a question. To direct it to... Either. Either. Heanna Keith, do you want to go first? No. Okay, now I'm muted. Yeah, happy to make a start. I think one way to fit in evidence of things that maybe aren't working well or aren't working as intended in the implementation of the TCA is to actually use the governance framework that underpins the TCA. So, of course, you have various specialised committees and trade specialised committees where the two sides meet, and they, at the moment, the frequency is around once a year. But there has been, there have been some suggestions from the House of Lords European Affairs Committee that the frequency isn't sufficient and that the two sides should be meeting more often. And in those discussions in the specialised committees, from what I know, there are usually discussions with stakeholders ahead of those specialised committee meetings, so that is an opportunity to feed in any concerns. And then there, of course, also, for our life, the parliamentary partnership assembly and the civil society forum, where civil society in particular can raise concerns. So I think just using the governance framework maybe a bit more than has been the case so far is one way of doing it. And that might then also be through into the annual implementation report that the EU publishers and the UK, I think, is publishing one every other year. So I think that could be a useful way of doing it. I think in terms of lobby groups in general, we've seen that that can be effective. I think you mentioned Horizon. I think another example is the rules of origin for electric vehicles where the EU has been very hesitant at first to amend the rules that were about to change from this year, 2024. And it took almost over a year to come to an agreement and to decide to basically delay that to the 2027. And I think a huge factor in that has been pressure from industry on both sides. So I think that might be one of the keys that you actually have pressure from industries from both sides, so that there is a clear kind of mutual interest and also mutual benefit. And it's not just one sided. So I think in terms of civil society, but also lobby groups, if you can, if you can kind of join forces, I think that might be an effective way of doing it. Thanks. I still dropped off the call. Oh, no, you're still there. Hi. I'm here. Hi. Yeah. Yeah, I agree with what Yanuk has said. I think just to add this echoes my kind of opening point really is the process is fundamentally political. This is not structured negotiation, which is set in stone. It's not like the TCA negotiations either where you have a fixed deadline and you have a fixed number of files that you need to conclude or at least try and discuss. This is almost entirely ambiguous in this process and therefore fundamentally is going to driven by politics, not policy. That's kind of what's going to shape the scope of any review that takes place. And so on the EU side, the real limiting restraining factor is just the lack of real appetite for deep negotiation, the focus on other things that constraints what you can do. And on the UK side, I think we're going to assume a Labour government in this scenario because they're the ones that are more likely to pursue a deep review. They're going to be constrained by capacity because an incoming Labour government would have a lot of things that they want to do on the domestic front. And these negotiations require a lot of administrative bandwidth in themselves. And so you're limited in how much you can actually put into a TCA review because you're going to want to be doing lots of other things and other parts of politics at the same time. So the politics of that is really going to constrain what's achievable and it's going to be down to both sides to find their middle ground within that. There's no deadline, there's no point where they need to get it done by. So if they're actually serious about getting anything out of a review, they're going to have to get their heads together, kind of have lots of candid discussions on the margins of events where they kind of test each other's perspectives out as well, kind of work around trying to build relations, trying to create trust, all this stuff is fundamentally political. And that's the substance of what is going to make or break any review. Thanks. Thank you, Alexander. Thanks, convener, and thanks for the comments so far. As you've identified, it gives us a chance for a moment to take stock, I think, of where we are and the deadlines that may be coming through some of the processes. And the whole idea of governance and enhanced co-operation, because I think that there are elements that need to be looked at and could be expanded and could be looked into, but if that is to happen, there would need to be, once again, agreement about the structures and the commitments and that could be quite limited in some respects, but it could also be quite wide-ranging in others if there is to be a flavour. And you've also, Janet, talked about the dates and the timescales we have here with elections and the time it takes to try and make that happen. So there is, once again, going to be a gap of where we are and what will eventually become the norm for 25 onwards in reality. And it may be slightly different to what we have at the present moment in time, in many respects, depending on the political will and the involvement. So it would be quite good to get a flavour from you of, do you see the enhanced governance or the enhanced co-operation being barriers to the future or, once again, are there some opportunities? I don't mind your answers first. Yes, happy to go first. Yeah, I think Brexit is a process and the TCA implementation is ongoing and I think a good sign is that now post the Windsor framework agreement, both the EU and the UK have been very clear that they are committed to fully implementing the agreement and kind of maximising the potential of the agreement that we have. So I think in terms of every view that is maybe not overly ambitious but more kind of in the moderate scale, the things that the two sides could easily look at either as part of a review or before it is to just look at what have we actually already agreed on but we just haven't implemented it yet. And I think there are various things in the TCA. There are dialogues in there that I encourage, for example, on security matters, which kind of given the security context that we find ourselves in seem quite pertinent. So two of those have so far been implemented on cyber security and on counter terrorism, but there are three more in the TCA that are suggested and that haven't been yet implemented. There's also a border article on global cooperation, which is article 770, which lists various areas for dialogue, including peace and security and sustainable development, climate change. So that's something that the two sides could look at and say there is already a hooky in the TCA. Could we have more dialogues on that? You mentioned the importance of the governance of the TCA and the governance framework that we have. The Partnership Council, for example, has the power to add new specialised committees to this governance framework or to change the tasks that the specialised committees have, the areas that they look at. And as members might be aware, there has been a proposal in one of the discussions of the PPA, the Parliamentary Partnership Assembly, that there should be a new specialised committee on that zero. So I think those are things that are probably fairly uncontroversial, that if there is momentum and willingness on both sides, the two sides could look at. And then on the more ambitious side of things, you then have a review where you actually add new things to the TCA, like an SPS deal or something on mutual recognition of professional qualifications. And I think if you do that, then it's necessarily going to be a more difficult process because those will require negotiations. So it's quite likely that you will need a new mandate for the commission to negotiate this on behalf of member states. And that is just going to take more time. You also kind of then touch upon questions of alignment, which might be politically difficult for the UK side. I think when it comes to those things, the time frame is a bit longer, but there are things that could be done just to act on SCN unfulfilled commitments in the TCA and to look how can we use the framework that we have as best as possible. Thank you, and Jo. So I think this spirit of cooperation, which has been created post Windsor, is good if you want to, so to speak, optimize the TCA and the current agreement, but it's not particularly good if you want to really enhance and deepen the agreement. So to give examples of that, as you said, we've had a rise and we've had some things which already contained and committed to in the TCA have now been pursued and completed because relations are unfrozen. And so you can piecemeal, build upon those things which already provided for sit down in your committees and work through them at quite technical level until you reach conclusion and you implement. We've also had agreements on financial services. There's an MAU on cooperation on competition matters as well, these kind of things. But if you really want to push the envelope and go into areas which aren't necessarily already provided for, then the current structure of cooperation I think is still quite constraining. The reasons for that are the TCA provides for a number of technical committees, but they really are quite technical. You get sort of stuck into the policy detail around, for example, through what methods can you enhance your energy trading provisions. But this is kind of official level work. You've not got politicians in the room who are going to actually at the end of the day sit down over a drink and say, is this really where we want to be or did we want to take it that bit further and can kind of enhance the scope of imagination. And also in the way that it's governed between the 27 member states, they still meet regularly to kind of discuss UK relations. But again, in quite a structured state environment where kind of everyone wants to put their point across officially on the record, but you haven't got that softer, more candid space again. And just to give some examples of the limitations of that, you know, we had this deal recently signed on cooperation on policing and regular migration between the Home Office and the EU's front-ex. Again, there's operational cooperation now going on. We've got a little bit closer in terms of speaking to one another, but there was no really substantial new legal obligations. There's no returns agreement, which has been spoken about as an interest from the UK side to do that. You really need to, again, like have that show that kind of, I guess, more political trust. You need to kind of be sitting down in different rooms, not just technical committees, where you look someone in the eyes and say, what can we actually do here? What do you need from me? And you go ahead and you work from that. And so that's that's what's missing in the relationship and how you create that, you know, is ambiguous. It can be, but broadly speaking, you need to have more regular dialogue. You need to either have more regular political level summits between leaders or other forums as well. You need to have more dialogues which bring politicians together into the room. And also there's a lot of diplomats here. The UK mission in Brussels, inviting member states regularly to events, kind of getting to know people, getting to understand people. That softer world of the relationship can be significantly deepened and is a prerequisite to having a much more ambitious relationship with the EU. And I think you've identified there that the two sides seem to have more success when finding an agreement, when there seems to be a little bit of a lighter touch in the dialogue that takes place, rather than the formal objections and obligations that come through. Because these, at times, have been much more strained. But as I say, the lighter touch seems to work for both, and we seem to have managed to get a better understanding or even a slightly better process out of all of that. And having other individuals in the room, rather than just the political ones, like you've indicated, the diplomats and others, you have a role to play. That seems to have a more success. So do you see that as being one of the major features going forward as well? To be clear, this co-operation which has been built in the past four months is not a bad thing if you want a closer relationship with the EU. It's a prerequisite to any kind of enhancement. If you can't even talk at a technical and operational level, there's absolutely no hope of doing anything beyond that. I think the analogy which I would give is that relations were subterranean for a good while after the TCA was concluded. And then we had the impasse over the Northern Ireland protocol. We've now come back above ground. I guess that the aeroplane is taking off. It's gradually gaining height. But I think that the cruising level where you actually want that relationship to be on a regular basis hasn't yet been found. Instead, there's a question of what altitude you want to cruise, I suppose, to really talk to the metaphor, but that's where we are. Thank you. Thank you, Mr Bibby. Thank you, convener, and good morning to the panel. Thank you for your report. I particularly note what you've said about the contrast and key differences between the Conservative Government's approach and a potential future Labour Government around veterinary standards, mutual recognition of conformity assessments and professional qualifications, more flexible labour, mobility arrangements for short term trips in UK, association with EU programmes. I also note what you've said in your report and again this morning about the significant challenges about making changes and the potential political costs as well. As a starting point, to what extent are those differences in that contrast understood in European capitals? You've also made the point that the EU would also have to trust that future UK Governments into the future which could be far more Eurosceptical will uphold such agreements. I just want to ask what can be done to try and address those concerns. Do you want to direct? I have to make a start. Thank you. I think just on, I'll start with the question to what extent the kind of differences of preference in UK politics are well understood in the EU. I think that, well, on the one hand, I think we've already made the point that the relationship with the UK is not a priority matter for the EU. If you look at meetings of the European Council, there's one next week, if you look at the agenda, they are going to discuss things like Ukraine, the Middle East enlargement, their new defence industrial strategy. So that's where their hearts are at. So I think in terms of their priorities and what they want to drive forward, it's not improvements to the TCA. But at the same time, you still have quite similar structures in the EU institutions that are similar to what they were during the Brexit negotiations that still very closely monitor what's happening in the UK. So I would say that in the European Commission, in the external action service, and also in the working group on the United Kingdom in the Council, which still meets twice a week, there is a very good understanding of the political situation in the UK and what's happening and what the potential positions might be. And I think this is maybe slightly anecdotal now, but I think just also in terms of working as a think tanker, there's definitely a feeling that there is interest in the institutions and in what people in the later party in particular are thinking and what they might want to do if they win the next general election. Thank you. Building on Janica's point, I agree that the EU definitely understands that Labour has an interest in deepening relations and the differences between the Labour Party and the Conservative Party on that front. And I think the two ambiguities that remain are the extent of Labour's understanding of European politics and the extent of Labour's head on the policy detail. So politics first kind of a widely sort of said thing is there's an assumption that you turn up in Brussels with a smiley face and suddenly everyone wants to talk to you because you're not the Euro skeptic party that's been in government. Obviously it's a lot more. There are many more vested interests than that amongst the 27 that you have to you have to balance and you have to understand that if you push on one thing, that's potentially going to upset particular member states. And how do you how do you find a compromise which is going to work for everybody, which then leads into the policy question, which is does Labour just say, you know, we want an SPS deal or we want mutual recognition of professional qualifications? But that can take a number of different forms and it's not clear that that detail has been kind of fully outlined or thought through yet because given example with SPS, there's a big difference between Swiss style alignment and New Zealand style alignment. The Swiss model involves dynamic alignment with EU regulation, and then you've removed more or less all bureaucracy around it, or you can have a more limited New Zealand form of alignment where you don't have all the regulatory dynamic alignment. But there's some recognition of standards which allows for some minimisation of bureaucracy and putting those clear asks on the table is going to be the really, really key thing. Firstly, to show that you're a serious negotiator and you understand what you're talking about because these are technical negotiations which take time and so the EU's not going to want to sit down with a party unless it really has a handle on the detail. We saw in the previous negotiations over the TCN and withdrawal agreement that there was a massive difference in worldview between the UK and EU on these matters and generally a perception that the UK didn't necessarily always understand exactly what it was kind of getting itself into. Having shown that kind of proficiency and detail is vital and then it's also important that, again, if it's the Labour Party, the Labour Party would understand the trade-offs that come with that. If you're signing up to a Swiss style veterinary agreement, is it Swiss and different Norway? I'm now getting worried that I'm getting the country wrong, so apologies if so. I think Swiss, but I do mean Norway. Whichever one you're aligning with that you understand the political trade-offs that come with that, the amount of alignment you're going to have to do and, again, the political ramifications that would potentially come from that domestically if a government is going to align with a number of EU regulations. I think it is Swiss anyway. The politics that would come back into that is another important feature and it's not clear at the moment that Labour necessary is exactly clear on the precise details of the proposals that it would like to bring forward and the consequences that come from that. Thank you very much for that answer. Obviously, as has been mentioned earlier, it's a big year in terms of politics and elections with a UK general election. We've also mentioned the European elections as well. In terms of external factors, we have the elections in the United States as well. I think that that's been referenced as a potential external factor that might drive changes between the UK and EU's relationship going forward. Obviously, we've heard as well about foreign security agreements and the desire from the EU to work on that as well. Have you any reflections and thoughts on factors in relation to the United States election and how that could impact on foreign security issues and anything else for that matter? I'll go again then hand over to Janik who I think might sort of a bit more across the foreign security stuff than me. But what I would just say is that the political context has changed even since we wrote that report six months ago, I think, in terms of the likelihood of a second Trump presidency and also the extent to which the EU is really now linking economic policy to security policy and the extent to which its industrial strategy is linked to security in a more unstable global environment. So the desire to pursue more domestic manufacturing of industrial capacity around renewables, around critical minerals, forming agreements of the like-minded partners there to help drive that transition to become less dependent on countries like China. And so those questions are fundamentally interlinked and that's a fundamental difference which didn't exist in 2020 when the TCA was previously negotiated. So that's potentially an area to examine and deepen because it's a new question which has come onto the agenda. And is it possible that, you know, the EU again with this interest in de-risking around China is looking for other potential partners who are closer to home share values? Could the UK be one of those partners? Is there more co-operation which could be built in that area potentially? But it also depends on a UK interest in a similar form of an industrial strategy. And at the moment, I think with the current government, it's a little bit unclear exactly what their strategy is. It feels like we get occasional mentions of it, but it ends up on ice. So we're potentially after the next election either government to come forward with a clearer vision for what it wants to do around these questions. Potentially there's room for co-operation with the EU then, but it is very much dependent on the politics of the next government. I can hear you. I can't see you at the moment in the room. That's it. Thank you. OK, perfect. If I could add to what Joelle just said. I mean, it's interesting if you look back at the Brexit negotiations. As you know, there is no foreign security and defence chapter in the TCA, even though there was quite a detailed proposal for that in the political declaration which outlined kind of the joined vision for the future of the relationship and was signed by both sides. And then later, the idea of a chapter on these areas was rejected by the Boris Johnson government. The EU side was quite shocked by that, I think, and they think that was a missed opportunity not to have anything on that in the TCA. So I think there would definitely be interest in that on the EU side. And we, of course, know that Labour is talking about the idea of a security pact with the EU. So there's interest on both sides, I think, in doing more together. I guess the question is just how is that actually going to look like? I think on foreign policy, it's probably mainly going to be around having more political dialogue. The EU has political dialogues with almost all of its key partners. And it has also committed in this strategic compass, which is the use foreign affairs strategy that was released in 2022. In that strategy, the EU has also committed to having a greater focus on foreign security and defence in its dialogues with key partners. And it obviously now also has a trade and technology council with the US. So in a way, the UK is a bit the odd one out by not having such a dialogue. So I think that would be a fairly obvious thing to do, which both sides might be interested in. Labour have also said that they're interested in a more formalised relationship on sanctions. Obviously, the two sides are already working very closely on sanctions in response to the Russian war in Ukraine. But that's something they think about having a more structured dialogue to kind of maintain the level of engagement also beyond this phase of the war. So that's kind of the foreign policy side when it comes to defence. The EU has certain instruments that the UK could participate in. That's, for example, the EU's civilian and military missions. The UK used to lead some of those. For example, the one in Somalia, the anti-parasy mission or in the Western Balkans. So there is a possibility therefore for the UK to return to some of those missions, albeit in a different role, because as a non-member state, the UK would no longer have any decision making capacity in contributing to those missions. There are other things that the EU is doing in defence, and they've actually developed lots of new instruments and innovated in response to Ukraine, but also in response to Brexit. So there is the permanent structured corporation, the so-called passport defence projects, where the UK has already applied to participate in one project on military mobility, which is about moving troops and equipment across borders in the EU. As I understand, that's currently being held up by disagreements with one member state, but that will hopefully come to fruition at some point in the future. I think where it gets really tricky and what would be the most important area to respond to also the potential of the second Trump presidency is defence industrial corporation. The EU just published a new defence industrial strategy last week, and if you look at that strategy, but also at existing funds like the European Defence Fund, which is funded by the EU budget and has 8 billion in there over seven years. The UK is at the moment excluded from these developments because they focus on enhancing the competitiveness of the single market, and therefore only single market members can really meaningfully participate in those. Instruments at the moment, so that's member states and Norway, and they're currently also carving out some exceptions for Ukraine for good reasons, but it's going to be difficult for the UK to participate in those things. So I think for a Labour government that wants a security pact just to have awareness of what the constraints are that they have to navigate as a third country that's not in the single market is going to be important. But I agree with Joelle that the international context, and if Trump is very elected, it's going to be a driver for probably having at least something symbolic quite quickly if Labour comes into that moment. Thank you very much for your contribution so far. I was interested in what Joelle had to say about the administrative bandwidth constraints on political ambitions. However, I think it's also true, certainly in my experience, that politics drives these things. We have the idea that the EU is a rules-based institution, which slavishly follows the rules, but whilst we were discussing animal feeds and so on, Brexit happened and blew all that away, I think in the context of the accession of an independent Scotland, it will be the politics that drives it and not any rules. And also, if you look at what's happened in Ukraine, the way they've climbed up the league table very quickly to accession status, again, is a response to the politics rather than anything else. Given that, I just wonder if you could say a bit more, I mean, Neil Bibby has quite rightly asked about a Trump presidency. It would be interesting to know whether a UK government in the future would stick with a Trump presidency that was encouraging Russia to attack European states or would it be more driven to work more closely with Europe, but in relation to two other things. One, the European Parliament elections. Is there anything that you can see on the horizon that's politically kind of taking place just now that might make it more difficult to effect changes to the TCA, for example, in a particular country, a particular party with a very strong view on something that might impact the TCA? I know that's a little bit of crystal ball gazing. The other one is just in relation to defence and security. Are there things that may happen that have a substantial impact? Do we go to see how either the Middle East plays out in relation to the EU's response or further developments in Ukraine? Are there things that you can see on the horizon that might have an impact on the ability to change the terms of the TCA by interests of one or more of the 27 or for defence and security developments? Absolutely. There's almost infinite things that you can try and forecast. I'll pick up a couple that I think are salient. One is political and one is more policy-based. An important political development recently has been the shift in the EPP bloc in the European Parliament, which is Ursula von der Leyen's bloc, around asylum migration politics and the potential discussion of a Rwanda study. A Rwanda style scheme for a regular migration being implemented at a European level. I think that potentially changes the framework for dialogue around migration in the future. If the UK looks like less of an outlier in its current approach to wanting to deal with channel crossings or asylum seekers, then potentially that opens the door for closer cooperation on that issue. Potentially, it's some more formalised returns agreement that probably involves the UK taking asylum seekers from the EU in exchange for returning people crossing the channel back to the European Union. I think that's one area where there's perhaps growing alignment in political attitudes and potentially creates room for dialogue. But it is very much dependent on the identity of both the UK government and the Commission after the next elections. The other one is slightly more prosaic and it's more technical, but it's just the ongoing EU policymaking process in particular around green matters. So there are a number of big files on the agenda at the moment to do with, for example, packaging. Packaging makes quite significant changes to those rules to eco design, which is the sustainability of products, also to supply chain regulations around links to forced labour, links to deforestation, links to human rights and environmental abuses. All these things potentially create quite significant new trade bureaucracy between the UK and the European Union and also potentially because of the protocol, slash points of framework between Great Britain and Northern Ireland. So this is very technical stuff. No one's really paying attention to it, but industry is paying massive attention to it because they're across it, but at a political level we're not paying much attention to it. But it's a slow drip of issues which are going to create new regulatory barriers and that is a political problem at the end of the day. And so as these things grow and grow and grow, there's going to be a stronger imperative for a UK government if it wants to improve its trade in links with the EU to try and nullify those effects. So either that means alignment with the EU regulation or it means some other kind of way of getting around it. I don't know what that would be, but I could imagine that being kind of an issue which doesn't really drop off the agenda, especially because of the sensitivities in Northern Ireland, which if it risks it, and that's not something that the UK government can afford to avoid. Yes, I agree with Joelle and just to say that in terms of the European Parliament elections, I think it's just interesting to think about how that might impact priorities in the EU. I mean at the moment we are expecting an increase in seats for the far-right groups. So the European Conservatives and Reformists and the ID group, that's the far-right of the Parliament, are expected to gain seats. And whilst groups like the Greens, for example, are expected to lose seats, the kind of ground coalition in the European Parliament between the centre-right, the centre-left and the Liberals is expected to hold, but it's expected to be smaller than it currently is. So that means there is a bit of a question mark around kind of coalitions in the European Parliament when it comes to particularly green and environmental files and whether the EPP groups or the centre-right might be inclined to work with the European Conservatives and Reformists, the ECR group, on those issues, which is going to make it much harder to pass kind of green deal legislation through the European Parliament. So I think that might then also have kind of an impact on what the EU wants to do with external partners. I think we're also currently seeing that the next commission and also left on the line is currently positioning herself under kind of the areas of defence, but also competition. So I think that's of interest as well, because at the moment, as I said in my previous contribution, it doesn't look as if they've kind of carved out a space for UK participation. And their defence industrial strategy, but if Donald Trump is re-elected and actually withdraws the security guarantee for Europe, and if we were to be in a situation where Russia tests the nature solidarity clause, then I think that would be a very strong incentive for the two sides to fundamentally rethink their security relationship. And for the EU to kind of move on that, because I think we're currently in the kind of cyber paradoxical situation where the UK is kind of a unique partner for the EU in Europe with strong military capabilities. But because of how the EU works and because of the distinction that draws between members and non-members, it currently doesn't really have the tools to acknowledge that. So I think that is going to be interesting to see, and that could be driven by external developments. Thank you. Mr Rascall. Yeah, thanks, convener. I wanted to ask you about the issue of EU electricity market reforms, which are aiming to stabilise electricity prices across the EU, particularly after the disruption we've seen with the war in Ukraine. I did notice in your report you talk about some of the tensions within the EU, particularly around subsidy through contracts for difference of French nuclear and whether that constitutes a subsidy to a major form of energy generation and I guess an economic advantage to France. I'm just wondering, does that have any implications for the TCA and the level playing field at all? Who would like to come in on that, Joe? I don't think Yannick will mind if I take this one. Yeah, so there's two implications. One is a policy implication like last time and one is a political implication. I think to start with the policy element, so it says in the TCA that there is a commitment to improving the flow of energy between the UK and the European Union because the UK is no longer part of the single electricity market that EU has. What that means is there is slightly more technical procedure around energy trading on the daily markets. It's not a significant hindrance, but it is an administrative cost which is estimated to be adding perhaps a couple of per cent of overall energy prices, perhaps less than one per cent. People are undecided, but there's probably a small but not totally insignificant cost to the disruption it creates. The UK and the EU are currently talking about this and how you can get around it. It's going on at technical level or committee level on the TCA, but agreement hasn't yet been found because it requires something. I mean, there are very few people I think that really understand in great detail the kind of energy policy and how this would work and how you actually create a new mechanism which allows the trading to work more fluidly, but that's ongoing. But it's struggling to really make progress and there is kind of frustration on multiple sides about how long this has taken, which again comes back to the point I made before that when you don't have that much kind of political engagement, these things can get a little bit mired in the details and can be kind of slow to move forward. And so this links to energy market reform because, you know, were the UK or EU to do something quite dramatic in terms of reforming the energy markets, which for a while seemed likely, but I think seems increasingly unlikely now as the disruption caused by Ukraine, the war in Ukraine kind of settles down a little bit. That was taught for a while of quite radical reforms to de-link renewable prices from fossil fuel prices, for example. But worse than anything radical to happen, that could again complicate the process through which you try and improve the efficiency of your trading, but I think that's a diminishing risk for the time being. So really the issue is around political will and kind of getting that agreement over the line. Of course in 2026, the chapter on energy has to be renewed anyway. So that might be a point of which a point for more critical reflection on whether enough is being done. And then kind of the second point, which is around the level playing field. Yes, that is, I wouldn't say it's an elephant in the room, but it's interesting how unacknowledged it is, the fact that since again, Russia's full scale invasion of Ukraine in 2022, we've kind of seen significant subsidies on the EU side to support energy manufacturers support industry, the heavy industry that's reliant on massive use of energy. Those subsidies are, to an extent, distortive in terms of their effect also within the EU single market. The capacity that Germany and France has to levy national level subsidies is significantly more than a country like Slovakia or Slovenia. And arguably it creates an unlevel playing field within that European market. And equally you could say between the UK and the EU based on the level playing field provisions in the TCA. For the time being, neither side has really wanted to raise or address that question, it seems. I don't know what's going on behind closed doors, but certainly publicly it's not been widely raised. And, you know, there is a question about if there were to come a point of a review of the TCA or wider discussions on altering the state of the relationship, would that LPF issue be raised either, you know, as a potentially as a kind of negotiating card say, OK, look, we've given you a bit of allowance here. We haven't raised any issues. The UK could say so, you know, you need to get something back in return or it could be more as a stick or as a threat. I don't know, but it is sitting there and it's simmering and it hasn't really been fully discussed. No, thanks for that. I suppose the politics comes into that as well. The appetite within Europe to push through major radical reforms might end up stretching that relationship. I just have one question, really, and a final question. It was really about, you know, I think you've set out really to three, three particular types of, you know, improvements. I mean, you know, you've talked about examination, exploitation and expansion of the TCA. In that, if we did go down a route of expanding the TCA and changing it quite significantly, do you see any kind of situation where the discussion around our exclusion from the single market comes back onto the table again? Or is this review so tightly constrained that it's unimaginable that such a thing could be entertained? Because it feels to me like there's an inevitable logic here of where we end up and it might take five years, it might take 20 years or 30 years. But within all these models, it's all about removing barriers. It's all about closer integration. It's all about deeper cooperation. And it feels like it's only going in one way, one direction, and surely there can only be one end point which would be a rejoining of the single market. But I don't know if that's just fantastical to even suggest that right now. I think you might be straight in the crystal balls here, but we'll have a go see. I think for the TCA review that will take place in 2026, I think it's very unlikely that single market membership is going to be on the table. I think it's not going to be on the table unless the UK side makes a political decision to change its red lines. Because at the moment, the Labour Party are saying that they are basically committed to the red lines that were set by Theresa May back in 2017. So no single market, no customs union, no freedom of movement. So unless those red lines are changed, I don't think it's going to be on the agenda for the 2026 review. I think it also in a way clashes with what the EU imagines the review will be because they obviously seem this as a very technical exercise. And even the idea of using it to build on it with an SPS deal or other additions is not really what they have publicly at least said they have in mind. So I think kind of the expand model that we outlined in the report, which is not a wholesale renegotiation of the TCA, but just basically a look at what's working, what isn't, and is there anything we could add because the TCA is at the end of the day a dynamic framework agreement and you can kind of slot new things in if you want to. I think that's probably kind of the maximalist version of what we could see in 2026. And then of course further down the line, that might change, but I think that will really depend on politics and it will probably depend more on politics on the UK side than on the EU side. Even though I think also there is a bit of a caveat there because on the EU side there is just no appetite on kind of having a conversation about single market membership. I think unless they can be sure that this is something that where there is a broad consensus in UK society and in UK politics, that this is where the UK sees itself for the longer term. Because the EU wouldn't want to engage in the negotiation of single market membership, which then is overturned by a future government again. OK. Thanks. Is Joel Wharton to come in on that question? Yeah, just quickly. Again, absolutely agree with Yannogor on the EU's position on this. But just say we're in some extreme hypothetical scenario where the UK to come around and say we want to rejoin the custom tune in the single market. The TCA review would be null and void anyway that clause because that's not a review of the TCA. That's an abandonment of the TCA in favour of a fundamentally different form of relationship. So at that point it would, you know, we're not in the realm of review, which is why kind of when we talk about those three models, those are the TCA review. Those are the constraints of how it could be used. Basically, that's as far as you could take it is deepening the existing existing treaty. If you wanted to do something fundamentally different, that's beyond review. That's new mandates. That's new negotiations so forth. But again, just to echo Yannogor's point that it's politically infeasible because the EU, even the UK came around and said this is what we want to do. Just the EU wouldn't sign up to it because there's a lack of trust around the UK's commitment to, you know, fulfilling all the obligations which will be made of it as a member of the single market and whether not only the current government but future governments, which might be more usceptic in the future, would not simply renew on those obligations. So, you know, I think any kind of progress towards single market, which is far from guaranteed, would come first through steadily building on the existing TCA. Thank you. I think that's exhausted questions this morning. You've been with us for a long time this morning. Thank you so much for your contributions. It's been really informative and I thank to both Yannogor and Joel individually, but also UK and a change in Europe for engaging with the committee and our inquiry work. On that note, I am going to move into private session.