 Fy nesaf, a chyfnodd ar gyfer y 13 meistag yn 2018 ar Ffiannansol Cymru. Fy fyddwn yn mynd i gyd yn dda i chi'r gwleidwch, wrth gwrs, mae'r ystafell yn gweithio bod yn ystafell yn flwyddyn 4, ac mae'r ddweud? Mae'r ddweud. Mae'r ystafell yn gweithio i ddweud i'r ddweud i'r pethau cyfrifol ac mae'r ddweud i'r ddweud from additional amount Scotland bill at stage 2. We are joined for this item by the Cabinet Secretary for Finance and the Constitution, who is accompanied by Ewan Cameron Nielsen, the team leader from the Scottish Government's fiscal responsibility division. We are in a slightly unusual position and no amendments have been lodged for stage 2. However, in terms of standing orders, we are still required and obliged to consider each section of the bill and the long title and degree each formally. Before we turn to the formal proceedings, Cabinet Secretary, I do not know if you want to make a short statement or you are quite happy just for this process to roll on. I sense that you are happy for me to let the process roll on. There are no amendments as you have described, so I am happy to let the process continue. In that case, we take the sections in order and the long title last. Fortunately, at the standing orders, I will ask to put a single question for the groups of the sections or schedules that are considered consecutive unless any member disagrees. That is what I propose to do. I do have a process if he disagrees. First, the question is that sections 1 to 4 be agreed to or will be agreed to. Secondly, the question is that the long title be agreed to or will be agreed to or will be agreed to. Minister, you will be glad to know that stage 2 consideration of the bill ends. Convener, that is the most stellar performance that I have ever put into a committee session. You asked for that one. I suspend briefly just to allow you to change over one session. The third item on our agenda is to take evidence on the UK Trade Bill, from Martin Bell, who is the deputy director of trade at the Scottish Whiskey Association, Kathleen Walker Shaw, who is the European officer at the GMB Scotland, and Helen Martin, who is assistant general secretary of the STUC. I warmly welcome our witnesses to the proceedings this morning. I know that all members have had copies of the submissions that you have made already, so I think that we will just get straight into questions in that regard. I will turn first of all to Adam Tomkins. Thank you, convener. Good morning, everyone. Thanks for being with us. I just want to set the scene before we get into some of the specifics and to understand the constitutional setting in which we are trying to consider the trade bill. I think that we all agree from our various different political perspectives around the table that Brexit is something that must be delivered compatibly with the devolution settlement. Is it your understanding that international trade, international treaty making, international treaty agreements and including international free trade agreements are matters that are under UK constitutional law reserved to the Westminster Parliament? I do not like answering questions with a question, but in terms of GMB's interests, I do think that there is a very compelling case to ask. Is this a time in terms of global trade policy where we should be accepting the status quo when we are looking at a whole new era of trade policy making within the UK? Certainly, the GMB has major concerns about some of the existing global and EU-level trade agreements, most predominantly for their lack of democracy, transparency and inclusiveness of stakeholders. I think that there is a very compelling argument about whether we allow those trade bills to go through in the UK without actually questioning could we not do better? I think that there are very few of us up and down the country who would think that we could not do trade policy a lot better than we currently are. Public opinion has never been more antagonistic and opposing to the current trade policy mandates at WTO and EU level. We saw that with TTIP. We saw it with CETA. I do not think that there is a president for carrying on with the same old, same old. I think we have to get back to the basics of what trade is, reducing tariffs or eliminating tariffs and duties, taking away the friction of trade, but also putting the interests of public people up and down the country, putting people first in terms of trade rather than the interests of deregulation, corporate power grab and governmental security and secrecy on how trade operates. I think that that conversation has to start now. It was one of the few parts of the Brexit scenario that we saw as an opportunity and I would not want to see it swept under the carpet now. From our perspective, that is really a matter for Governments to agree. We play the cards that we are dealt with. One of our key priorities at the moment might sound a bit odd, but what we are very keen on, and it really goes back to Kathleen's point, is a structured engagement mechanism in trade policy making. That is what we would like to see and we would like to see some statutory foundation for that. That brings together Governments, whether it is at UK level or Scottish level or devolved institutions generally, but it also brings together business and the third sector unions to have that discussion about what trade policy should mean, what our priorities should be, such that we end up with a trade policy whether it is trade negotiations, market access, WTO disputes that is well thought through that has widespread agreement and support, and that is effective. I think that it is a very interesting question that you have asked in terms of constitutional law, and I think that it speaks to the heart of some of the tensions that we are looking at at the minute in the trade bill, which is what our democracy will look like and how it will be shaped and how it will function going forward. It does seem reasonable that the UK Government should lead on trade negotiations. That does seem like a reasonable constitutional position, but it is clear that what is decided within those trade negotiations does impact on devolved issues, such as procurement, for example. It is very important, therefore, that there is an appropriate role for devolved institutions within that framework. One of the things that we would like to see is an appropriate framework being created that allows devolved institutions to play a role to scrutinise those trade bills, not just at the end of the process or after they are agreed, but while they are being agreed in a similar way as the European Parliament did at a European level. That should allow some sort of democratic scrutiny for the Westminster Parliament and for the devolved administrations and should hopefully create a much better trade system that can do the sorts of things that Kathleen was talking about, because we need to recognise that trade bills get into trouble when they are conducted behind closed doors without the buy-in from the public. Creating that system that is appropriate that recognises the devolution settlement that now exists and gives an appropriate access to this Parliament for that system is a very important part of what we are trying to create through those bills. That is helpful. Evidence that the committee has received in previous sessions on the bill has been very strongly of the view—as articulated by Helen that it makes sense in the context of our law—that the UK is in the lead on this, but that the reality is that modern free trade agreements include a number of provisions that touch on a range of devolved competencies, such as public procurement being just one of a number of examples. I think what the committee is interested in is your views about how, as it were, we square that circle. How do we ensure that Scottish ministers and indeed the Scottish Parliament itself, as well as stakeholders in Scotland and elsewhere in the UK, have a meaningful role to play in the making of free trade agreements going forward? I think that a number of members of the committee will have quite specific questions to ask about that. Thank you. I think that it would be useful for the record purposes if, in terms of the way that the bill is currently shaped, we have to consider what stage we would give consent to it. Are there any specific proposals that you would have to improve the bill in that regard? That would certainly help us in terms of the record, if anybody would like to take that on. Yeah, sure. Thanks very much, chair. From our perspective, the one thing that's missing is statutory foundation for stakeholder engagement. That would be the one thing. The one thing that we would want to see in the bill that is there is the ability to carry over existing EU FTAs only into the post Brexit world, and that is there. It's a statutory foundation for stakeholder engagement. I should perhaps clarify, chair, that in the agenda it does say that I'm the European Office of a GMB Scotland, but just to clarify that I am actually a national official of the GMB, although I prepared the submissions for GMB Scotland on this issue just for the interests of clarity. You will have seen GMB's response to your consultation and call for evidence, and we are very, very keen that we have some sort of formal structure in the work that we've done over a number of years following the development of trade policy, where that lack of democratic process and inclusion has happened is because there are no structures substantial enough to get that engagement at every stage of the trade agreement. As I say, I'm not sure if it's the perfect model, but one that did interest us, as we said in our evidence, was the idea of a joint council of the nations. We would like to see that not just in terms of a scrutiny committee once the decision to start a negotiated deal is kicked off. As far as the GMB is concerned, because of the major concerns about the direction of so many global and EU trade deals, we think that the Scottish Parliament and the other devolved administrations have to have a very formal and substantial say on why we're having this trade agreement, what are the aims and objectives of it, what is the scope of it and the mandate, and actually agreeing whether we start those negotiations, not how we fill the gaps or pick up all the messes once they've been created. I think that whatever structure we're having is a lock-in from the day somebody says, what about a trade deal with India or whatever, to the point that if we don't like what we see on the page at the end of the day, we have the right of veto, as the European Parliament does in terms of any trade deal. I think that we want to be seeing a sort of structure that is robust enough to do that. I think that just in terms of the bills that are before us at the moment, we're struggling because the Government, in particular the trade bill, but also we're dealing with two bills at the moment that are covering the immediate and future trade policy for the UK because we've got the taxation cross-border trade bill as well, which is covering other elements of VAT, border-related issues, as well as the trade remedies, although the trade remedies authority is actually sitting in the trade bill. The trade remedies authority is about the only forward-looking part of that trade bill, about what will be in the future, as opposed to the transitional arrangements for existing global and EU, which takes up the other part of that bill. There, again, I think that we see an example of concerns that we have about more of the same for the Government because the TRA does not mention a seat for the devolved administrations in that authority. It also doesn't mention trade unions either, which we're battling rather royally at Westminster for at the moment. There are nine seats, apparently. The chair will be appointed by the Secretary of State and, by default, he will have a significant say in those other nine seats as well. In the remedies side, he will also have the power to actually refuse the recommendations of the TRA. I think all of these things need to be addressed about what are we doing about trade democracy? Is what we're seeing in the draft bills that are before us in Westminster that you are now scrutinising? Is that good enough? I think that our answer is no. I think that we'd agree with a lot of what Kathleen's just said. I think that the role of parliaments, in particular, in the on-going scrutiny of trade bills, is absolutely essential. When we, for example, were looking at the issue of TTIP, we found the ability to go and meet with MEPs, who had first-hand knowledge of what those TTIP negotiations were, who had access to all the European side negotiation documents, and who could give a really good understanding of what was actually happening within the room. That was invaluable for us and allowed a level of stakeholder engagement in that process that obviously had a massive shape on what the outcome of that process was, which obviously was very negative at the time. However, the ability to understand the process, to be involved in it, was very much facilitated by the fact that there was that parliamentary scrutiny. That is entirely missing from the bills that we are seeing going through Parliament. It gives an awful lot of power to the executive and very little power to Parliament at a Westminster level and, frankly, it gives no power at all to devolve parliaments. I think that what we really need to see is a change in that for the on-going scrutiny, but also the power of ratification between all the parliaments of the UK. That is not unheard of. We see that at the European level, at the minute, in other European countries, regional parliaments have to ratify the trade agreements that are made, and I think that it would be absolutely appropriate for that to be replicated in those cases of legislation. Scrutiny issues are obviously emerging, so I think that I will just get into that scrutiny area now, Patrick, and then Willie. It seems to me that there are two separate questions around the parliamentary scrutiny arguments. One is about the basic principle of parliamentary scrutiny at all, comparing the ability that the Westminster Parliament would have if we accept the case that trade negotiations are a UK responsibility. The ability that the Westminster Parliament would have compared with what the European Parliament currently has. That ability to lobby MPs, that ability to engage with that scrutiny process, the ability of MPs to set the negotiating mandate, to have access to the papers during a negotiation and ultimately to sign off or reject an agreement that has been reached between Governments. The second question is about devolved competence. While accepting that the negotiation of trade agreements is a UK responsibility, the content of them will clearly have the potential to severely constrain devolved responsibilities and therefore requires the consent of the devolved authorities. Do you, any of you, place more emphasis on one aspect or the other of those two questions, the principle of democratic scrutiny and the devolved aspects of how democratic scrutiny ought to work? Do you have a particular model from looking around the world that you would like to draw from and advocate for to be included in this bill if it is amended? Felly, do you want to kick this one off? Well, I think that Catherine quite rightly articulated in the last answer that it would be possible to have a sort of joint council that does play a scrutiny role in addition to the work of the Westminster Parliament that would allow Scottish ministers to potentially play that role as well. I think that it's important to consider how the stages of the process will evolve over time. What's important is that we have some element of that embedded in the act at this point because at that point you can then use that to build on over time so that we can refrain and hone our systems to take account of what we need as devolved nations. I think that what we don't want to get into is the idea that this simply is something that the Westminster does behind closed doors without any proper parliamentary scrutiny from anyone and that they agree trade agreements that take away our rights and that we have basically no recourse for that. I think that that's the direction that we're heading in. We really need to try to create a system that gives a formal role to devolved institutions and a formal role to the UK Parliament. Just to take that apart very briefly before I come on to the others, you said that there has been a suggestion of a council of ministers within the UK. That, of course, would be about the Governments, not the Parliaments. Do you envisage a method of joint parliamentary scrutiny, or would you see that operating separately in the separate parliaments and for multiple levels of scrutiny and consent to be required rather than some kind of joint system? I feel that it would be appropriate to have scrutiny in each parliament using the parliamentary scrutiny methods that exist within those parliaments. How you develop that in the stages at which it was done in different places might not be exactly the same in each parliament, but I think that it would be appropriate for each parliament to play their own role with their own procedures and their own scrutiny committees, as we are doing at the minute with this particular bill. We need to recognise the fact that devolution functions quite differently in different places, so that it is not necessarily a one-size-fits-all approach. We also need to recognise the fact that each parliament is legitimate and has a legitimate say on the future of those deals and how they will be concluded and how that will affect the people that they represent. I think that that is maybe the bit that is not well understood or well supported at the Westminster level. The idea that it is legitimate that devolved parliaments would have an appropriate say that could potentially halt or radically alter the deal that is being agreed. Ultimately, that does happen in other places and other regional parliaments have a strong say on those matters. That is the level of democracy that we need to see at this point. If you look at the typical trade negotiation, you have a number of touch points. You have the scoping, agreement of the mandate, negotiation itself, ratification and implementation. I think that what we all want to avoid is the devolved institutions only coming in at the last stage, so they must be involved from the outset throughout. Precisely how you would do that—we do not have a position yet, but we are very happy to look at ideas—we will see the negotiators talking to the Parliament throughout, because they do not want to have a fancy deal at the end. Parliamentarians say that they would rather not go ahead with that. That is what you increasingly see in the European system. The chief negotiator will constantly be in talking to the relevant committees. I think that there is an important informal element as well, but the mandate agreement for example would seem like an obvious touch point where the Scottish Parliament should have a voice. If Kathy Walker-Shaw wants to comment on that, the UK has clearly been having to respond to the need to scale up on trade issues to develop capacity that has been largely exercised at European level. Does the Scottish Parliament need to undertake a similar exercise of increasing its capacity to engage with those issues? I think that that is vital. As Martin was saying, it is important for the Scottish Parliament to be brought in in terms of the decisions going back to my previous point of do we want this trade deal? Do we want to even start those negotiations and not go back to the fundamentals? In terms of the principles of scrutiny and what guides what and priorities, GMB's position is very much that Parliament, in the devolved administrations and at national level, would be driving the mandate of any council of the nations in the governmental approach at that level. We would not see them as separate issues. We would see them as part of the whole to get consensus on what trade policy was good for all of the nations of the UK and at every stage influencing that deal. That will require transparency, it will indeed require skills and knowledge and experience, which, sadly, you can only get on the job. However, I would say very strongly that that is not a reason for any of the Parliaments to take a step back from this, because they do not currently have that knowledge. I think that it is something that we all have got instincts about what is good and what is bad and our own visions of what trade could look like. I think that the Scottish Parliament would do well to sort of see itself as a key player in that process. Not least, and as I say, I think that it is something that we cannot wait on, because the first few lines of the draft trade bill talk about the Government's commitment to maintain its position within the Governmental Procurement Agreement of the WTO. It is one of the founding elements of the beginning chapters of the trade bill. We will come back to procurement after this. It is fundamental in terms of a scrutiny issue. You also asked about learning from other models across the world. There are various models where devolved administrations—of course, the powers of devolved administrations are never the same in any two countries, as they are not even within our own nations. During the CETA negotiations, the EU-Canada trade deal, a lot of people said that that was a good example of the involvement of the provinces and how the provinces exerted their power. I have to say that, as someone who was quite closely involved with the Council of Canadians and other lobbying groups that took a very active involvement from the Canadian side, the ability of the provinces to get where they wanted to be in CETA is an open question. There are a lot of compromises made. There are still, I would dare to say, tensions that may overflow yet in terms of how CETA runs day to day once it is implemented and up and running. There is no perfect model. There are things to learn from what the provinces did in Canada in terms of elbowing out some space for themselves. It was not perfect, and I think that you probably struggle to find many of the provinces who would say that they are 100 per cent happy with that. We will have to cast about and, as I say, bring our own ideas to the table in terms of how we see that. Willie, I do not know if your area has been covered, but do you still want to ask a question on the scrutiny issue? The concerns that you have expressed today in terms of the lack of scrutiny and accountability has been shared with the committee by previous people, giving evidence last week and before. Do you get in any sense that those concerns are being listened to in terms of potential amendments to the bill as it stands, or do you fear that, if the bill goes through as it stands, we are heading in the same direction that CETA went? Just on the general question of engagement, I do not have an answer to that of what is going to happen to the actual bill, but I have met a number of times the lead within DIT on stakeholder engagement, and what I am seeing over time is their thinking evolve. It started out by focusing very much on ad hoc mechanisms, so it is the traditional approach, if you like, but there is a movement towards more structure. As they learn how others do it and look at best practice elsewhere, they probably cannot give you a definitive answer to your question, but I think that the direction of travel in policy terms looks promising. I can give a fairly straightforward answer to that. I have major concerns about the lack of consultation and listening mode of the UK Government in terms of trade policy. As we mentioned in our wider UK consultation, which was attached, we were consulted last October on the white paper on trade policy. Within hours of the closing date of that consultation, we had the taxation cross-border trade bill tabled in Parliament. For people who spend a lot of time trying to give technical responses to Government policies, it is difficult not to feel contempt for your views when that happens, not least when the bill that comes out has some of the weakest trade remedies that we have seen internationally—never mind at EU level—in terms of how we protect and promote the interests of UK industries and other companies. We are going to come back specifically to trade remedies issues as a specific as well as part of this evidence deconcession, which Neil was interested in. I could just add that at this stage, because what that point does come on to in the light of concerns that we had about the fact that the Government did not have listening ears on, you may have picked up, and certainly we mentioned it in our response, that we have formed a joint grouping of trade unions with some of the biggest manufacturing employing federations in the UK, the Chemical Industry Association, glass, furniture and building materials. Because of our concerns that UK industry was being left wide open in the Government's trade remedies process, we are currently jointly providing amendments to the Government and having to battle them through every stage of this bill. We are picking up a lot of traction in the Parliament. MPs are referring to our group, but it is not changing the written word of the trade bill or the taxation cross-border trade remedies positions and the dumping positions at the moment. It is a major concern not just to trade unions but to the employers in the UK. It is important for this committee to know what levels of joint work are going on at a very technical level and, sadly, not being listened to in the way that we would hope we would be given a fair hearing. The STUC has not had any direct contact with the UK Government at all in this work that has been led by the TUC and our affiliate unions, as Kathleen Scott described. The only thing that I would say in addition to what Kathleen Scott said is that the frustration is evident across a whole range of our affiliates. There are a whole range of sectors that are feeling very unsure about what is going to happen in the future and feel that the process is moving at peace without any real engagement in a useful way. If there are no provisions or amendments to embed scrutiny in proper—we understand to be proper scrutiny in any trade bill or trade process, would your organisation be supportive of the Scottish Parliament giving consent to the bill, as it currently stands, or would you oppose that? From our perspective, we are looking for a bill that gets us ready for day one of Brexit, so it does the bare minimum that we need. From our perspective, the bill does that already, so we would hope that the Scottish Parliament would consent. We are not involved in trade remedies at all, so it is not our area to be honest. I think that we would be a bit more ambitious, perhaps. We would encourage the Scottish Parliament to consider not giving consent to a bill that is not laying a foundation for appropriate trade policy in the UK. We know that the bill is fairly limited in scope, but it sets a precedent for what is likely to happen in the future. I feel strongly that we need to build in those principles of democracy, that principle of scrutiny, that principle of democratic accountability at this point, and that you are currently in a position where you are being asked to give consent, so I would encourage you to consider those issues. Murdoff, I will write that your question is related to the series, before I move on to Ivan. It is. I wanted to put some of the discussion in a bit of context. I wonder if I could direct my question initially to you, Mr Bell, because we have had quite a lot of evidence verbally, but you are the only person who has come to the committee from an industry perspective representing a body that is really wanting to see deals done and trade being promoted. In the post-Brexit scenario, I did not support Brexit, but Brexit is where we are. We are going to have to deliver a lot of trade deals pretty quickly. It is in our national economic interest to do that. The evidence that we have heard both last week and today around additional scrutiny is not only understandable. There have been calls to give the devolved administrations a right of veto, calls for parliamentary scrutiny at Westminster and the Holyrood. We have heard calls for civic society to be involved in all those discussions. From a practical point of view, building all those levels of scrutiny and barriers, what is that going to mean in terms of the ability for the Government to deliver trade deals within the timescale that an industry body, like the Scotch, whisky association, is going to want to see in the interests of its members? It is important to take a step back and ask what trade policy is. Trade negotiations, trade deals are an important part, but it is not all there is. I spend my days dealing with trade barriers in markets around the world using the WTO and other tools that we have available. Often those are the major commercial issues for our members. If you look at many of our developed markets in the United States, for example, there is a 0 per cent tariff. The EU applies a 0 per cent tariff on spirits coming into the EU. The traditional trade issues that are dealt with in trade negotiations are often not the major hurdle for us. It is often about dealing with discrimination. We have had eight WTO cases over the years, seven of which have dealt with fairly flagrant tax discrimination in emerging markets around the world. As important as trade negotiations for us are the slightly less exciting but equally impactful issues of market access and disputes, one thing that is emerging in the way that the UK is looking at negotiating when it does start negotiating is that, yes, the ultimate objective might be a free trade agreement that can take some years to deliver, but on the way, what you want to do is to deliver meaningful commercial benefits. I met a colleague from the Association of British Insurers recently and I was very interested in their trade priorities because none of them is related to anything that would be dealt with in a trade negotiation. They were about having a licence to operate in market eggs. Those are things that, with political will and some negotiation, can be delivered overnight in many jurisdictions. A trade negotiation with the United States, for example, will take some time. We all know that, but if you have a working group with India, our top priority market worldwide, 150 per cent tariff, a lot of regulatory issues could be addressed piecemeal on the way to the final deal. That is an interesting response in the context of what we have been discussing, because what you seem to be suggesting is that the trade bill as a mechanism for then entering international trade treaties, whilst important and significant, perhaps is not absolutely essential because a lot of the trade that needs to happen, post Brexit, will happen anyway and does not require that level of serious involvement and development. The trade bill is about the existing trade agreements that we have and making sure that they continue after Brexit. What we would expect to see in a further bill is a much more detailed and inclusive approach to the issues that we were discussing earlier on, such as setting the mandate for negotiating ratification and implementation. The future trade negotiations would be developed in a very different context. When we are talking about stakeholder engagement in trade policymaking, yes, an important part of that is engaging in the trade negotiation, advising government and so on, but an important part of that is feeding in expert views from industry and from other stakeholders on the rather less exciting but very important everyday market access issues. In the United States, for example, there is a system of advisory committees run by USTR, which meet regularly and advise the US Government on how it should approach every WTO committee. That is very important. From a practical point of view, it is often more important. That is very helpful. I do not know if, Catherine or Helen, you want to add anything to that. Just to say that the question was guided in terms of is there not a danger of too many cooks spoiling the broth in terms of trade agreements? From my experience at EU and global level of some of the wider trade rounds under the WTO, far from it, the problem and what has stymied so many trade agreements in the last couple of decades has been the very failure to ensure scrutiny and stakeholder involvement at the right time and on a continuing and committed basis, which has derailed trade agreements. I do not think that there is any evidence to show that the more secretive and limited you are in terms of the governmental spheres that decide trade policy, the quicker it is going to happen, I would say, far from it. Far greater is the chance in current climate politically and of public unrest about these issues that you will derail it by not actually being more inclusive in terms of their development. I think that the only thing that I would say is that, just because this particular trade bill is limited in scope and is only intended to transpose existing FTA agreements, I do not think that that means that we should not be concerned about how we are doing that or the process for doing that. I think that some of the executive powers of rewrite that are contained within the bill mean that you could end up with quite different agreements from what you started with, even if that is not necessarily the intention to begin with. It adds to the on-easiness that exists around trade and the direction of travel within our country. It is important that we take seriously questions of democracy and scrutiny within the bill. We do not use the spectre of Brexit and the feeling that we need to get things concluded quickly in order to to keep things taking over, to mean that the UK Government can just put in whatever provision that we want and we agree to it. I think that it is important that we take time to put the appropriate measures into this bill and to ensure that we are laying that foundation and having the beginnings of those conversations about what democratic scrutiny in this area really does look like. Just for the record purposes as well, in terms of what you are aware of or what is on the legislative stock, in terms of making sure that democratic frameworks in place for a better description, is there any other legislation that you are aware of where we could deal with those issues or is this our chance to do it? There is a suggestion that we can wait and do this later effectively, but I am not aware of any other mechanism that is available to us apart from this bill at this stage. That is the point in some ways. We know that this bill is here, we know that it is an opportunity, and we know that you are being asked for consent. We do not know what is being proposed for future trade negotiations, which will have to happen. I think that that is absolutely true, but we do not really know what that process will look like or feel like. There is a possibility in my view that it could simply start to replicate what we did this time, and there might not be another opportunity for the Scottish Parliament to start to offer that consent. Potentially, I do not know. Ivan, you were in this area about consent. Yes, I specifically, and thanks and good morning panel. I know that we have talked a bit about the devolved Administrations and how you feel that you should be engaged in this process. I want to focus specifically on the area of consent versus consult, and I know that on the GMB submission, you have explicitly talked about that with respect to common frameworks, but also with respect to trade deals going forward. I do not know if you want to expand on that, and others might just want to talk around your particular views on the need for, as you see it, the devolved Administrations to give their consent to how we move forward. In the GMB's view, it is fundamental to the Scottish Parliament actually gaining a sphere of influence in terms of trade policy. From our own experiences at Westminster in trying to make a fist of what we have seen as trade bill proposals with taxation cross-border, bill that is far from where we would like to be on that issue, is that, unless you have that consent card to play, let us say, the consultation is, well, you are here saying it, but we are not listening to you. What sort of mechanism have you got to ensure that your views are actually taken account of? I think that that is something that is very important to consider at this stage. As we have said, the trade bill, part of the two pieces of legislation that are going through Westminster, is to a greater extent on the transitional nature of that. However, setting up a trade remedies authority that will go beyond that, so it is a little bit of a pick-and-mix. It is starting to set a precedent, and I would say very strongly the very fact that the devolved administrations are not seen in the current draft as players within that thing, that it is time to put a marker down in terms of consent on that area. It fears me to say, repent at your leisure. I think that that is where we are on it, that the Government is thinking about what it can get away with on trade policy. Here, we will set the precedent for how we go forward. I think that it is certainly something that GMB is reflecting on very strongly, and we are trying to make our voices heard at every level in terms of our concerns at this stage, because as Helen says, we are not sure how much we are going to be asked beyond it. I think that when it comes to trade negotiations, the time for consent is at the very outset when you are defining the mandate. That sets the parameters within which the final agreement must fall. That would seem like the obvious time to me. Coming back to the point about stakeholder engagement and having a formal structure that involves devolved administrations and devolved institutions as a whole, that would be involved throughout the process, so that would seem like the best way to dock in to that. I think that it is very important that consent plays a role in the process. I think that it is also important that on-going consultation plays a role. I think that those two things are slightly different, but there is a role for both. I think that we have explored the issue already. We are going to get into some of the specifics now. Procurement has already been raised, so James, do you want to get into it? Helen and Kathleen have both mentioned procurement, which has been an important aspect to us. Do you think that there should be scope for the devolved Scotland in effect to where there is a separate procurement policy? Do you think that it would be appropriate to ensure that it can stipulate terms of where the Scottish public bodies are affected, for example, on issues such as the real living wage? GMB has done a lot of work over the years on public procurement following two revisions of the EU directive over the years in 2004 and 2014. We are acknowledging that the Scottish Parliament has the right to devolve power in public procurement areas. In our experience, public procurement has been a very controversial and tense area of not just global trade agreements but EU trade agreements. I would say that, in our experience of the national context, the devolved administrations have been far more progressive and imaginative in their approaches to public procurement, particularly in terms of the social and environmental aspects of that, including wage-related things. We in the GMB believe that there is still a lot more that can be done, of course, but we see in terms of the Westminster approach to that, particularly in the last revision of the directive, where some of the elements of public procurement that we work very hard to get into the revision of the text. Nobody should underestimate how difficult it is to change EU public procurement policy. It is an area like trade policy where there is a lot of vested interests that just don't want to move, but it was something that had to move because the balance of the liberalising aspects of public procurement and the public interest and the social and environmental aspects of public procurement were going out of balance. In the last revision, we got this social clause, which, although it does not answer all the issues that you are relating to, Mr Kelly, in terms of establishing the living wage, and there are court cases that claim to be problems, the Rufford case, about why that might not be deliverable. It is something that the GMB does not agree with, I have to say. However, we got that clause in, and it was established as a general principle of the EU public procurement clause. We called it the social clause, where it recognises compliance with collectively agreed terms, social and environmental clauses, and in the contracts. It was not put in the general principles in the Westminster application. It was in the Scottish text. It was mentioned in the ability to exclude a contract in the Westminster provisions. The point that I am making is that there are differences in direction of where we are on procurement. Procurement is an integral part of trade agreements. Does the Scottish Parliament want to concede its progressive approach, or what might be in terms of public procurement, to a more restrictive and, let's say, less progressive approach to public procurement, and then be told what you can and can't do on an existing devolved power? I would suggest that that is not a route that either the Welsh or the Scottish administration would want to go down. As I said, coming back to the point of the fundamental of the trade bill, which is what Liam Fox is putting all his cards down on, we are going to remain in the governmental procurement agreement. If we look at the provisions and what the raison d'etre of the GPA is, it is to open markets, liberalise public contracting markets at global level. However, there is an interesting precedent. While we are talking about what might be, because as I said, GMB is all for let's see what might be possible, is that currently the UK is a member of the GPA as part of the EU 28. The Government is saying that when we come out we will be an independent member of that. Within the existing GPA agreement schedules, the Scottish Parliament and various roles within the Government of the Parliament is listed in that GPA, as it is with Northern Ireland and Wales, as well as the central government. Here is a question. If the UK can belong to the GPA as part of the EU in a plurilateral agreement that is within the WTO, but not binding on all, because not all WTO are members of it, what is to stop our unified collective group of the nations actually also having a voice within the GPA independently to protect their public procurement interests, of which I would argue wanting to level out and improve the social and environmental aspects of public procurement, including the ability to provide a living wage with a degree of legal certainty would be something worth going for. During the last revision, as I say, the article 18.2 was where we got to on a compromise, which is no mean feat, what our objective had been and which was supported by a number of the European Parliament committees that scrutinised the public procurement revision was the reintroduction of ILO C94, which is Labour clauses in public contracts, which does not talk about the minimum wage. It talks about collectively agreed or arbitrated wages in the sectors that are under the public contract. There was a lot of parliamentary support for that, and behind closed doors a lot of Governments across the EU did a lot of national level research on the merits of that. Sadly, it did not end up in the annex, which is attached to the ILO conventions that are listed, including and very importantly the freedom to organise and collectively bargain. But what we are saying is that there is a tipping point by which governments are accepting that something has got to give in terms of fair wages on public contract. For us, now is the time to start pushing that, and I would not want to see the Scottish Parliament losing any of its scope and of influence to actually get there. I feel that that was a very comprehensive answer. However, just coming from the public side, from our member side, I think that there was a lot of frustration about how high procurement was used and could be used previously. The European Union was, for a very long time, held up as the bad guy here. We would love to pay you the living wage, but we just can't because it is Europe's fault. We would love to not have to tender CalMac services, but we just can't because it is Europe's fault. That is a simplification of a complex argument, but ultimately that is what our members heard. I feel like there is now an expectation that some of those things will be in our control going forward. It will be very difficult, I think, for our members to understand why it is that, because of a trade agreement that we then concluded with other nations that those issues still exist and that nothing has really changed, we still do not have the ability to do what we want to do in terms of our own public contracts and our own public money. In some ways, it goes to the heart of the legitimacy of some of those agreements and the idea that we are genuinely taking back control of how we run things and how we do things. It is essential that we find a way for the Scottish Parliament to be able to have meaningful ways of controlling procurement and putting social issues at the heart of procurement, because otherwise it will be a very difficult conversation about why everything changed and yet nothing changed. I am going to go to GPIs now. GPIs is not a huge issue for the Scottish whisky industry. Emma, in that case, do you want to have a chat about GPIs and tariffs? Thank you very much, convener. Good morning, everybody. I am interested in issues around protected geographical indications, label and tariffs, especially when it relates to Scotch whisky, for instance. I note that, in the submission from the Scotch whisky Association, it says that you have worked hard for years to ensure that consistent EU rules on production labelling and geographical indications are in place and enforced. It is also interesting to note that 90 per cent of Scotch whisky product is exported, so obviously trade is vitally important, and 39 bottles are exported every second to 180 different markets. How important or critical or significant is the Scotch whisky brand? When we are looking at the geographical indications of even other products, there are 14 categories, there are 67 products, there are even additional schemes for food, drink, wine, whisky and all that. How important is the Scotch brand for our trade? Scotch whisky has to be produced in Scotland, according to our law, the Scotch whisky regulations. That is fundamental to the success of the industry. We exported £4.3 billion of Scotch last year, the biggest Scottish goods or services export worldwide. 30 per cent goes to the EU 70 per cent elsewhere, so 180 markets around the world. We are a premium product and much of that premium comes from the fact that we are produced in Scotland and we have the reputation that has been built up over many many years. We have been suing people around the world for many many years to protect that description and we are very pragmatic in the legal tools that we use. The GI concept comes from the TRIPS agreement in the WTO, so that dates from the mid-90s, but we have been suing people for many years before then, often using the common law tort of passing off, so people pretending something with Scotch whisky when it wasn't effectively. What TRIPS gave us was a higher level of protection and an obligation on WTO members, of which there are now 166, 167, to give us as GI right holders the ability to enforce our right. Different countries will have different approaches. Some, like the EU, will have a very sophisticated GI regime, others will have a register of GIs, others will still allow us to protect through the trademark system, for example. We have a policy of registering wherever there is a register worldwide, sometimes we are registered as a GI, sometimes we are registered as a collective trademark, sometimes we are registered as a collective mark. It depends on the regulatory regime in the marketing question, the tools that we have available, but in no market is Scotch whisky generic and that would be a big blow to the industry if we became generic in any market. That is why we spend a lot of time and money making sure that that does not happen, so it is absolutely fundamental. Does the trade bill propose to protect the geographical indications for Scotch whisky, for instance? Under the continuity of existing EU FTAs, in many of those, Scotch whisky is one of the EU's list of GIs to be recognised by the other country. That gives us another string to our bull, if you like. With the exception of Korea, we already have some kind of formal protection in place and in Korea we are in the process of registering. It is a good to have, it is important for us, but we already are protected in those markets. Last week, I asked about Scotch beef, Scotch lamb and other things in tariffs that are involved around that. There are issues around competitiveness that might be put at risk by tariffs on supply chain inputs, glass bottles at 3 to 5 per cent and even corks up to 5 per cent. All of that is a real challenge when we need to protect the product that is Scotland's brand. That is playing into the UK-EU trade negotiation and what that is going to deliver. We are looking for an ambitious FTA that eliminates tariffs on inputs, as well as we do not have a tariff going into the EU anyway. Certainly, on our inputs, we would not want to see tariffs on those. Kathy? GMBs are very interested in geographical indications. We have done quite a bit of work, not just in the agrifood sector in terms of the existing EU coverage of GIs, but the European Commission consulted a number of years ago on the scope to extend geographical indications beyond the agrifood and what the appetite was on member states to consider that. It saddens me to say that it was 50-50 in terms of support for extending it beyond the agrifood sector. The companies that we were working with in relation to the broader scope of that, I was a member of the European Economic and Social Committee and took the opinion on that, was another area where we have members. Unlikely, though, it might seem in several row that we have several row tailors, and they, like Scottish Whiskey, are permanently in litigation to defend the integrity of their products. They thought that a very valuable way would be to extend it. I have to say that the UK Government's position on the extension of that was less than lukewarm. Martin and I have had discussions about how safe the GIs are. GMBs might come from our trade union backgrounds of the rule of thumb is preparing for the worst and everything else is a breeze. I have concerns about where the Government's commitment to GIs are. Of course, you asked about does the trade bill cover that, and Martin rightly says, where we have existing trade agreements at EU level that are going to be transitioned over, then we would expect that the integrity of the GIs status will be maintained within that transition process, but the bill itself is silent at this stage on GIs. As we said, it is not going into any detail of what will be. I think that it is an important issue for the Scottish Parliament with such products, such as Scottish Whiskey and the export value of that, that we are not left uncertain about that. The reason that I have concern that we need more clarity from central government on their commitment to GIs in future trade policy and future trade negotiations is the wider EU withdrawal negotiations that we have currently had. You will be aware that a text came out in March, which filled in colour-coordinated the European Commission's original draft withdrawal agreement proposals, where under intellectual property, geographical indications under article 50 were very specifically mentioned in item 2. They released, after the negotiations on this discussion, colour-coded. Green is where the commission and the UK Government agree. Yellow is where we are negotiating, but we still got some T's and I's to dot and cross, and white is where we have no agreement. I will just hold this up for you. Intellectual property in general is green to good to go. Geographical indications, white, we don't know. I hope that that will soon be green, but the point is that today it is not green. I think that we could ask with good reason to central government why it is not green and what their aspirations and their direction of travel is on ensuring that the coverage that we want to see in no doubt in terms of the future protection that we want for GIs is clear as soon as possible because it is a fundamental issue for us. My personal view is that the reason that this is white is because the Government knows that also agreed in this document is their ability during the transition period to start trade negotiations. You will know from recent press coverage that the United States is less than enthusiastic, in fact, is actively hostile to geographical indications. They were up about the Cornish pasties again. I don't know what it is about Cornish pasties getting a hit in all the time, but now Donald Trump is doing it, but he does not want these what he sees as restrictive regulatory proposals damaging the US's ability to make anything that it wants to. I suggest that they are maybe hedging their vets a little bit to pull people in. Do we want geographical indications to be a sacrifice of a trade agreement with the US? I don't think that we want to be making those kinds of concessions, so I think that it's a priority that we know where the Government is on the issue. That point is really important because Ivan McKee asked about consent versus consultation. When we are looking at the point of trade being reserved, does that mean that we just have to sit down and say, okay, go and negotiate for us when Scottish industry and business is absolutely dependent on protecting things such as the Scorch brand? We need to be shouting about being round the table. Martin, will you be able to turn that chart green, Martin? I think so, I'm fairly confident. We are discussing with DEFRA at the moment what the UK GI regime is going to look like. I suspect that that's why your paper is white rather than green. It is a sine qua non of any FDA that the EU negotiates that there will be the same level of protection for EU GIs in the marketing question as there will be in the EU, so that is a red line for the EU. I think that there is a great debate about GI that plays out internationally between largely the US and the EU. It's happened in the WTO, it happens at bilateral level. All I would say is that, in the TPP, the US concluded a number of side letters with trading partners to recognise the distinctive product status of Bourbon and Tennessee whisky. Of course, that's not GI at all, but I think that it's a recognition that there is something in this GI concept for US exporters as well. Catherine is absolutely right that the US takes a different view from the EU, but there are one or two kinks in that view. Alexander, have you got any— He's been covered already. Thank you. I just wanted to pick up on this. Kathleen has covered some of the territory, but the evidence that we heard last week from one witness about the US position on this referred to the US annual foreign barriers to trade document, which will set the agenda that the Trump regime will be looking to achieve from any future negotiations. It says that the US remains troubled with the EU system that provides over-broad protection of GIs and, firstly, impacting the protection of US trademarks and market access for US products that use generic names in the EU and third country markets. In that context and acknowledging that this is not only in relation to this bill but also future legislation about future trade negotiations, would it be a positive step for the Parliament's plural to pass an amendment, even if only symbolic at this stage, setting a clear expectation at the moment that policy will be based on the intention to protect and, if possible, extend geographic indication? Would an amendment on that set the right context and give a clear signal to government that that is what is expected of them? I personally think that that would be a very helpful move, yes. I'm not sure that we'd have to think about that. I mean, I don't think that we would see that as being necessary, at least from our perspective, but that's the perspective of a mature GI that's well organised. To feel that that's not necessary seems to suggest that you have confidence that it is already the intention of the UK Government policy to protect GIs, not only in relation to your own industry but more broadly. I think that I go back to the UK-EU negotiation and I think that the reality is that the UK is going to have to have a GI regime that gives EU GIs the same level of protection as the current EU system. Even in relation to future negotiations with the US? I mean, if you have that system in place it's going to be difficult to change it because you will have made that commitment to the EU. Unless you want to contribute, we've got two other distinct areas that we want to cover, ash and dispute settlement issues. Thank you convener. I just wanted to ask the panel about this issue of investor state dispute settlements or any varieties of clauses that might cover that area. Obviously, in the GMB submission, you stated that governments must be free to apply public interest policy without the risk of challenge. We know that the Scottish Government, in particular, has a history of pursuing quite distinctive, I'm thinking, particular public health policy. Obviously, we'd like to still have that on the table in the future, but we could still do that. If those investor state dispute settlement clauses are a feature of any future trade deal negotiated by the UK, I'm wondering if the panel could explain how you think they might impact on to Scotland. Well, investor state dispute settlements, as they are currently, are corrosive to the point of actually paralysing the ability of governments and various levels of government to act in public policy interest. What they also do, which I think is equally as damaged, is that they actually cause a sort of regulatory chill, so certain public policy decisions that, for instance, the Scottish Parliament might want to do, and as I say, Mr Kelly raised the issue of the living wage, might genuinely want to drive that forward. Egypt actually was taken to court for that very issue of wanting to raise the minimum wage on a contract for investor benefits, saying that that was actually impinging on their ability to make profits. It's hard to imagine, but that is the reality of ISDS in operation. As I say, if you go on websites, you will see armfuls of examples of governments and local authorities being sued eye-watering amounts of money in Romania recently, the entire equivalent of their health bill, their health budget being lost in ISD cases. At European level over TTIP and CETA, it was a flashpoint of those agreements, because public opinion is now becoming very aware as the corrosive effect of these provisions. Spectacularly, the EU commission sort of shuffled a bit of paper, and we've got rid of ISDS, but instead we've now got ICS instead. Same thing, just different name, but the public opinion is not going to wash with public opinion. These systems are not necessary in trade agreements, and they are everything getting back to my initial point when we started today, of what trade agreements should not be about. Let trade agreements be about tariff reduction, duty reduction and free access. Let them not be about a power grab of corporate private court-settled investment interests that are completely undemocratic in themselves. They are secretive, they shouldn't be legal, but they also undermine public policy, decision making and democracy at every level. There is a growing tide of countries that have had ISDS that are starting to move away from South Africa and New Zealand. There is a tide, and I don't think it's a time for the UK to be actually looking to resuscitate and prop up a system that has already proved to fail, and not just fail, but actually be very, very damaging to governments across the world. They are trying to resuscitate that for this. Well, Liam Fox is committed to having ISDS in future trade agreements, whether he's changed his mind now, but when he initially started the consultation, the white paper did actually support ISDS. Anybody else want to make any comment? Just to add to what Catherine is saying, we see it very much as a form of private justice that is completely illegitimate, and we see it as just robbing Parliament's ability to make decisions for their community. It can lock in privatisation, and it can lock in decisions that are extremely negative, and it ties the hands of governments and the hands of citizens about how it is that we organise our own society, and it is the exact opposite of what I think people are trying to achieve when they voted for Brexit. We've been involved in WTO litigation, which is state-to-state, which is very different from investor state, which is a company involved in an arbitration with a country directly, which effectively grew out of commercial arbitration, so it looks very light commercial arbitration. I know from a GMB perspective the commission's new approach is not satisfactory, but it addresses some of the concerns about secret courts and the lack of transparency, lack of appeal, but it is not an area that we have been involved in. The policy question is whether ISDS facilitates investment, if that is the policy road that a Government wants to go down, and there is an academic debate about whether it does or whether it does not. I think that there is a question from a practical perspective whether it actually delivers increased levels of investment at all. Thank you. I want to declare that I am a member of the GMB. You said earlier that there should be trade union involvement in the trade remedies authority, which I think is important. GMB also said that there is no recognition of the evolved administrations in the TRA. In answer to Lily Coffey, it was one of the examples in the UK that the Government was not listening to. Do you know if that is something that the Scottish and Welsh Governments are pushing for? Is there anything that you want to add in relation to the panel as well about the importance of changes to the membership and function of the TRA? I have not seen anything going through the Scottish Parliament. You would obviously probably know that better than me in terms of your discussions, but we are pushing amendments at national level for the Trade Remedies Authority to include trade unions and also to involve the devolved powers, which I think is essential, not least because in Scotland, as they are in Wales, through procurement and other means, you are developing your own industrial strategies. We wish that there was more of a comprehensive one at national level, but the trade remedies provisions that are in the taxation cross-border trade bill at the moment, so dealing with dispute settlement remedies, anti-dumping provisions and other trade defence mechanisms in our view are not robust enough to protect industries. My view is that the Scottish and Welsh Parliaments would want some involvement in a trade remedies authority that may decide that they are not going to take action in terms of trade remedies in the defence of a Scottish industry—for instance, whisky—heavens forbid, but we have seen a very hands-off approach to Government in terms of the level of involvement that it wants in terms of dispute mechanisms and trade defence mechanisms. There seems to be a line of thought at the most senior level of Government in this that any kind of involvement in trade is encouraging protectionism. As we have said to the central Government on a number of occasions, it is very important that the Government makes the distinction between protection and protectionism. They are very different things. I think that there is no industry in the UK that does not want its Government to go to the ramparts and defend their jobs, their future, if we are gaining unfair competition as we did with the steel crisis. It is important for the committee to perhaps know that I followed that very closely at EU level. When the Chinese dumping on below market value steel products was going on a few years ago on an on-going basis, the EU commission did want to raise punitive tariffs on China. I think that it is important to know that the level at which they were set finally was below what the aspirations of the EU commission had been. Now, GMB is not one to be an apologist for the EU commission, but on that level, the reason that those trade levels went down in terms of punitive tariffs on steel products was because the UK Government thought that they were too high. I think that it is important for people to know that. We blame the European Commission for an awful lot. They wanted to increase those tariffs against China to a level beyond what the UK Government was prepared to accept. In my view, I think that they might not have changed their spots in terms of how they would protect that at a domestic level. Therefore, I think that it is vital that you have a very central role, particularly given the individual power that the Secretary of State has given himself within the trade remedies authority. You need to have some corner to fight from there, as do we and industry, because it is going to get very nasty. I will throw in another example that we had in terms of political will or lack of experience, but we recently went through a trade dispute with Bombardia, our Northern Ireland members who were facing a hostile and thankfully unfounded challenge from Boeing supported by Donald Trump at every stage of the process. Had we not had the European Commission fighting our corner for our members in Northern Ireland to save their jobs and actually refute that challenge, on the basis of the submission given by the UK Government, I am very fearful that we would not have won that case. I saw both. I think that the UK Government put in about a page and a half in defence. The Commission had a very compelling and legally sound case. When we went to Brussels to try and defend that case, the European Commission put up nine lawyers and industry experts to meet with our trade union reps, gain information and help to strengthen that case in defence of Boeing, the challenge from Boeing. I do not see the robustness there in the UK provisions. I think that we need to give very strong focus on doing something about that. I would just like to add that, in terms of the trade remedies authority, it is essential that it has both business and trade union representatives on that authority, because that level of expertise and that level of understanding of sectors is absolutely essential, as well as the representatives of the devolved administrations, as we have already said. I also think that it is worrying that the trade bill, one of the bills anyway, allows the Secretary of State to override the view of the trade remedies authority. I think that that is a very worrying provision and again suggests that this is very much about executive power rather than parliamentary power, rather than proper sort of trade scrutiny. As well as the involvement of the devolved administrations and business and trade unions, we need to look at that aspect of power for the Secretary of State. Thank you very much for witnesses for coming in today. It has been very helpful in helping us to draw together some of the threads that we need to prepare a report on our view on the legislative consent for the trade bill. Again, thank you very much. As we agreed at the beginning of the meeting, we now move into private session.