 Dwi gyntaf wnaeth y 23 ar y trafodreid 2014 o gwblionau oedd yn Ynrym yn ymwneud. Gallwn cyfnodd gyffredinol yn gwneud debyg y rai eth yn ei boblion yn rhaniadol. Hefyd, mae'n gwybod o'r agend ac yn Arwyr i'rThey Whale 1, myfwyl gyda Adam Ingromol am y Ynrym yn ymwneud, a Adam, mae efallai o wybodaeth hwn yn ymwneud hi ar gweithio'r Gweithwyd? No, rydyn ni mi ddim yn rylef efo yw chi eisiau gwblion i'r Gweithwyd. I welcome you to the committee, Adam. I'd put on record our thanks to Clare Adamson, who, as Hans-Alla has already said, came to the committee very well prepared and wished her well in the new committees that she's taken part in. Moving on to agenda item two is a decision to take business in private—which is a decision to take agenda item seven in private, which is our work programme—which is a usual process, as the committee agreed. Agenda item 3 is a report from the committee of the regions. As you know, we have two members of the Parliament who are committee of the regions representatives. One is Stuart Maxwell and the other one is Patricia Ferguson MSP. You have your report in your papers this morning that is paper number one. Any comments, questions, queries? The report this time is compiled by Patricia Ferguson. Patricia and Stuart take time about to compile this report. As I say, the report is there. Any questions or comments? Thank you very much, convener. The report, the agenda for the meetings looks fairly extensive and very interesting. There are a number of subjects that have came up at this committee for our members' interests. For example, climate and energy, the blue economy, the potential of developing the seas and so on, reconnecting Europe's ICT issues. There is a whole load of things in the agenda here. Is there any detail on the deliberations of the committee from the member about the contribution that was made and the discussions that took place that we might benefit from? I wonder if we could perhaps seek that and get more information on some of this. If there are specific items, yes, we can raise that. Is it specifically the ones that are of interest to this committee right now, whether there has been any? Those are the ones that occur to me. I have been interested that they have come up here, but other members may have other areas. I mean, there are 40 items that were covered during the two plenaries that I mentioned, but it is really just the agenda that we have got. I was just wondering what actually happened during discussions of some of those items and whether the member could give us some kind of information on what thinking is and what development plans there may be there to bring these matters to our attention. If that was possible, convener, I am sure that it would be of benefit to the committee. Thanks for any other comments. Rod. Let's make it a comment under the Justice and Home Affairs in relation to the comments made by the members of the European Violence and Women's Right and Gender Equality Committee calling for more EU-level action on gender violence and a new strategy published in 2015. The Council of Europe, the arm of the European Convention as it were, has obviously an Istanbul Convention. I think it would be helpful if we could find some kind of brief summary of that for the committee and consider that in terms of its overlap with what's happening in the European Union in terms of gender violence. I think it's quite an interesting area. Okay. Do you have any other comments on the committee of the region's report? So we're looking for some additional information on decisions and discussions. Some future time want to suggest to the committee that we explore that area, but I think we need some more information over that first. Okay, thank you. Any more comments? Adam. You know, do you have any sessions with the committee of the region's members, Ms Ferguson and Mr Maxwell? Does the committee actually... We invite them to deliver the report in some occasions, most occasions that's not practicable for them because of sitting on other committees and things at the same time we sit. But certainly that's why we wanted the report. I think that Willie's point's pertinent, you know, it's good to have an agenda, but what contributions took place, what happened, you know. Yeah, well, for example, with the tea tip discussions that we're having, it might have been interesting if either one or the other had come along and sort of given us a flavour of a debate that's happening in Europe and the committee of the regions just to that might inform us a little bit. Well, we still continue with our inquiry and tea tip well into the new year, so that's maybe something we can look at either some written evidence or, as you say, if they can make it along to committee to give us a flavour of what's happened at committee of the regions level. Yeah, no, that's a good idea. Yeah, particularly in terms of substate level and how people are responding to it. Yes, yes, that is in regions. Yeah, I did point well made. Yeah, okay. I think I agree, I think at least one of the members should really be here to assist us in getting the flavour as you quite rightly point out. I think it's important that we should have had at least one member in attendance. Perhaps we can extend an invitation to them next time saying that, you know, it was felt at committee that somebody's presence would have been appreciated. We always do invite Hansa and Salabot and what we'll do is just impress that. Chris, yeah, I think the sending of the report in itself is unreasonable to try and extract the actual flavour of what's being done and what difficulties if anything they had faced and how we could assist them in maximising what they're doing as well. I think it's it's something that we would want from them but also for them to get something from us as well. So it would be a two-way traffic. Okay, Billy. Notice that each of the items there's a rapper tour associated with those as well. Are we entitled to make contact with those people and similarly ask them for their summation as well? That will give us more of a European perspective on what to place. That would be helpful, I think, as well. We can ask. Yeah, definitely. Okay, is that completed with the committee that is in report? Yeah, excellent. I'm happy to circulate to relevant committees. Maybe highlighting some of the points that were pulled out. Yeah, okay. That's exactly I think that reinforces the view of attendance. I think that would be really useful because any input that would be added to the report at committee would be another useful tool for other committees to get rather than just getting a bland report as it is. Okay, thank you. Gender item four is your next paper, which is a paper on the usual reports from the Scottish Government on the work that they are doing generally EU structural funds, Horizon 2020, our foreign languages and trust that we have on this committee and any transposition of directors. So we've got paper number two, Willie. In relation to the structural investment funds, will we see the breakdown of, you know, on page five there it tells you that there's 900 million euros coming to Scotland over a period of years and so on? Will we get to the point where we might see a breakdown of where that money goes and what projects it relates to and so on? Again, I refer to my friend and colleague, Kelly Weedy, who raised this regularly, to be able to get some kind of insight as to how the money is dispersed and sheered out across various projects in Scotland. Will we be able to see that through that programme, do you think? I think we can ask for it. I think what's happened is because it's taken such a long time for the structural funds to kick into place, then some of the programmes are just starting now. So, yeah, it's something maybe we can look at. We ask for these reports every six months now. So, hopefully, you know, a pattern will emerge, especially when things are moving on. But certainly it's something to keep, you know, on the front burner really on. Where's, okay, how much money are we getting? Where's it being spent and what's the outcomes of that? Alec? When the minister gave evidence on the budget, one of the questions that we did put to her was around the different European funds that were coming into Scotland. I think one of the concerns we had is that there's different parts of government that are involved. The minister also said that it was difficult to clarify what funding was coming into Scotland that was not directly coming in through government, but that she would endeavour to go and look at that and talk to other departments of government. I'm just wondering if we're able to follow that up and see if there's been some progress there, because I do think it's an area that we need to actually look at. No, I think you're absolutely right, Alex. Before last year, what we managed to get was basically a chart of each portfolio, where the money went in, what it was spent on and whether there was any washback or unspent funds as well. It took a while for that to be populated, but it did give us some of that information on where money went to and how it was spent, what type of programmes it was spent on. But it's certainly something we can ask for again. But I do know the minister was keen, she expressed the view that she was keen to try and see what could be pulled together. I think that gives us a bit of a picture, because the question is, I suppose, are we taking advantage of local authorities as other organisations taking advantage of the types of funding that could be pulled into Scotland? The answer to that seems to be we don't know. So I think we need to do more on that. One of the question marks us is local authorities, in their own right, apply to European funds as well. That may never come near the Scottish Government at all. That's about sharing that information as well. I think we spoke to Cosly in the past about that, but it's certainly something we can chase up. Sorry, Hans-Ale. Rod. In terms of our languages inquiry, I was pleased to see that there's been a 45% increase in the number of modern languages assistants in schools since that started, at least that's a positive sign. Any other questions about the Scottish Government report? Thanks again, convener. It's just on page 16 and 17 there. It's in relation to the the foreign language learning aspect that the Glow online facility members will notice that Glow was successfully transitioned to this new, flexible, cloud-based environment. The Glow is an online learning environment full of resources for teachers and pupils and parents alike. I'm just saying I'm pleased to see it being used more widely. It was a subject of some criticism a couple of years ago, but I'm quite pleased to see that it seems to be developing into the useful tool that we all hope that it's going to be for kids and teachers and education. Any other questions on the Scottish Government reports? Transposition of directives. I think we're still chasing up on the Trafficking Directive and ensuring we're getting the most up-to-date information on that. I think there's an interim report due from the Trafficking European Commissioners Department. We'll keep our eyes open for that, certainly since it seems to be that the Human Trafficking Bill will be imminent. It's went from soon to shortly, and the Scottish Government speaks. I'm hoping it's imminent. The current sessions planned in the Justice Committee will be taking evidence from stakeholders on it, so imminent I think is very much the word. Excellent. Thank you very much for that information, Rod. It's a benefit of having the Justice Rappertour on the Europe Committee. Okay, happy to move on. We've got the Brussels Bulletin, which is the gender item 5. Again, any questions or comments? Rod. As you hadn't already spotted it, the comments I made about gender violence were in relation to the Brussels Bulletin, not the committee reading's report, so I think I should correct that for the record. I did realise that, but I didn't want to correct you in mid-flow. Any other comments? Alex Rowley. Under the shipping emissions, again in terms of the recite, there was obviously the question of the emissions regulations and the impact that was going to have. I'm understanding that what I've read in the press is that the Scottish Government has successfully negotiated a way forward with the company and fourth ports. I did raise this with the minister, and I just wonder if we can perhaps follow up and get a report back on where that is at and what the Scottish Government position is. In terms of the employment skills and education, the speech by the Commissioner for Employment, Social Affairs, Skills and Labour Mobility would be quite good to get a copy or a link to that speech and also maybe some more information about the growth and investment package in the European social fund and how those are being used or how that relates to us here in Scotland rather than just the general stuff with that. There was also this report in terms of informal learning and Scottish Credit and Qualifications Framework. Again, it would be quite good to get that report, first of all. I've got all of that, but could you set up for you? I was interested in a paragraph or two on the energy union, European-wide energy union, and obviously particularly relevant to Scotland's notions of decarbonisation of the European energy mix and further investment in research and innovation, which is particularly relevant to the announcement this past week of a couple of our way-power companies being in trouble. Indeed, European state-age rules were mentioned in that context as well, so it would be useful to get some indication of how Scotland will play into this particular feature. If we could maybe get something back from the Scottish Government or whoever on this particular subject. We've got that. Any other comments on the Brussels bill or two? Thanks, convener. It's on page 4 in that creative industries section that came up at our committee previously where there seemed to be opportunities for media companies throughout European Union and Scotland in particular to exploit some of the initiatives going on here. My question is really to ask how do our SMEs or our organisations that might have an interest in this be made aware of this? Is there any way we can get this Brussels bulletin out to a wider audience? I'm sure it's online and it's posted and so on, but signposting these things is often the key step to finding out anything. I'm sure our companies, local companies, would be interested in this kind of initiative. Katie has just reminded me that the last time that was raised, we raised it directly with the organisations. Obviously Scotland was very limited in the scope that it's got and in contacting people, but certainly this committee and the work that it does can do some of that as well, but maybe just signposting. It's always been an issue when we've talked about any European funding that comes through Scotland and how people get access to it, how do they know it's there, that raised awareness situation and I know that the Scottish Enterprise do a bit of that and certainly Scotland Europa do a bit of that as well, but maybe it's a bit more incumbent or it was all to do a bit more and raising awareness, but we can do the direct. Exploiting and protecting, preserving our cultural heritage throughout Europe, so there's bound to be an absolute mountain of material that's around. It probably isn't digitised and protected for future generations and there's lots of companies, not only in Scotland but I'm sure throughout the European Union that it would really like to participate in something like this, but to find out, first-ever finding out that it's possible to become involved is a key step for them, I think. So anything that raises awareness amongst our companies in Scotland that there's potential here for them I think would be welcome. In that sector then the sector skills council skillset would maybe be the place to go because they obviously work with lots of individual, very, very small companies up to larger companies as well, so that's maybe a route to go skillsets, the creative industries sector skills council, yeah? Yeah, hands out. I'm just thinking there should be on the website anyway, sorry, should be on the website anyway, so that in itself would help, but I know where you're coming from in terms of, excuse me, sharing it with the industry itself, it might be an idea of sharing it with Scottish Enterprise and Scottish Heritage and people like that as well, so we can share the linkage and we can make sure that their websites carry it as well, so that's another way of doing it I suppose, but we would probably have to have a conversation with them in regards to sharing this type of information in the future, so it's a good point to bring up, I think it's worthy of chasing up. Okay, any other comments on a Brussels bulletin? No, I just wanted to raise very quickly on the very first page is the Yunker Investment Plan, which states quite categorically now that this is not new money, it's repackaged money, whereas I think the last time we discussed this we thought this was new money, so that's an interesting insight into that. But also the fact that it looks like it's going to be focused on infrastructure, but it doesn't really define infrastructure, whether that's capital projects or digital infrastructure for instance, so maybe keeping a close eye on where Mr Yunker is going with his repackaged money, but also the fact that the European Investment Bank will take a much bigger interest in this and the whole package of match funding I think seems to be much more reliant on private investment too, and then the impact that maybe have on the access of local authorities and other third sector organisations to get involved in that, but maybe just something would keep away their eye on and ask for some deeper detail on what the plan is. Okay, happy to leave the Brussels bulletin at that point and bring it to the attention of relevant committees across the Parliament. Thank you very much. I think we're going to suspend for a few minutes to allow our visitors to take their seats for the round table. Maybe we'll give it five minutes I think and allow people to get settled, so back in your seats for 9.27. Thank you. Welcome back to the European External Relations Committee, moving on to our agenda item six, which is the second evidence session in our inquiry on the Transatlantic Trade and Investment Partnership, commonly known as TTIP. We have a number of guests for our round table today and what I intend to do is just to go round the table to allow people to introduce themselves and very, very briefly give us the reason why your organisation or your industry or your sector is interested in this topic. Obviously, I'm Christine McKelvie, I'm the convener of the committee, and we would quite like to get a bit of a free flow of conversation around the table, so if you can just channel maybe your comments through me and keep an eye on me, I'm pretty good at picking folk up and making sure that everybody gets their say, and if you sit too quietly I will come and say have your say as well, because I don't want you to go away and think that you've not had a decent opportunity to participate. We're very, very keen to get everybody's views on this issue. It's something the committee and MSPs in particular have been lobbied very, very heavily on. We had trade unions, third sector and world development moving NFU organisations like that two weeks ago, so now we're looking to see what the trade side is saying and we're very, very keen to hear from you. So, as I said, I'm Christine McKelvie. I'm Hans Lamalec, I'm the deputy convener, and I'm MSP for Glasgow region. Scott Jonson, I'm the chief executive of Scottish Life Sciences Association. Adam Ingram, MSP for Carrick Cumnotton Dunvalley in Urshire. David Brackenrange, chief executive of the Scottish Textile and Leather Association. Roderick Campbell, MSP for North East Five. Benny Hartop, managing director of Hwyk Nytwyr. I'm Willie Coffey, MSP Cymar Nyrwng Vally. Good morning, I'm John Crawford, I'm the strategy manager at the Scottish Enterprise. I'm Alec Browley, MSP for the Cowanbyth constituency. Good morning, my name is David Williamson, I'm the government and communications director at the Scottish Whiskey Association. Good morning, Alan Pogarth from the Scottish North American Business Council and also representing ILD Scotland this morning as well. Good morning and welcome. I thank you for some of the written evidence that we got, that's extremely helpful in allowing us to deliberate on the questions, but maybe I'll just open with a bit of a general question and ask you all if you can comment on it, is to give the committee an insight into your thoughts on the transatlantic trade and investment partnership and the benefits and the pitfalls of the partnership. Maybe just by way of introduction, the Scottish Whiskey Association represents 57 different member companies, that's about 95% of the Scottish Whiskey industry. We are very internationally oriented businesses and members will be well aware and the United States is our largest export market already by value, our second largest by volume. It represents about £1 in every £5 that Scottish Whiskey earns around the world, so it really matters to us. It also matters to the Scottish economy because Scottish Whiskey is about 20% of all Scottish exports to the United States. The industry has been following TTIP very closely. Indeed, we've been speaking to the European Commission and the UK Government about this since even before the TTIP negotiations started to make sure that our priorities were being reflected. It's an interesting negotiation for us because our usual FTA issues, tariffs, taxes and the legal protection of Scottish Whiskey aren't actually at stake. We've already got a zero tariff in the US, there's a non-discriminatory tax and Scottish Whiskey is very well protected in federal law and international law. The negotiation has become for us about less sexy issues like behind the border issues, technical regulation, regulatory coherence and taking this opportunity, if at all possible, to set a precedent. You'll get a benchmark in place for future trade negotiations, which frankly would probably be more commercially significant to us and where we face more trade barriers. I'm thinking for example the EU FTA with India, which is being looked at at the moment. The other thing, we can go into some of the detail of our priorities as the meeting goes on of course, but the other thing I think for us today is to really stress from a Whiskey industry perspective is that it's not just about the United States, this negotiation. For us this is a much wider strategic issue because if we get it right with TTIP and we have an ambitious deal, we actually have the opportunity to set ambitious deals with other trading partners with India, with Vietnam, with Japan, these are negotiations that are going on at the moment so you get a gold standard in place, you can apply that elsewhere. I think the final point at this juncture would be to say it's already having an impact. We're very clear that only through TTIP starting did we get over the line with the EU Canada deal, the Comprehensive Economic and Trade Agreement, CETA. It's meant that the Mexicans suddenly have become very interested in refreshing their FTA with the EU because they don't want to get left behind and that's a very important emerging market for Scotch Whiskey. Brazil, a market that's been teetering on the brink of recession for a period of time, has started to look again at dormant trade negotiations with the EU for the wider Mercasur region, so this is an important deal both in terms of exports to the US and there are potential commercial benefits there through that gold standard but we also have to have a wider perspective and it's having an impact in other negotiations that run the go and potentially could be very significant in terms of setting that standard elsewhere. Thank you, Alan Walker. A couple of what David said, I think. The opportunity is once a generation chance to try and reach an agreement. Scotland is a small country trying to raise as much income as it can to pay for public services. The First Minister outlined last week the importance of going in the economy. TTIP provides that opportunity. Small businesses are crying out to try and break into that market. One of the issues is the tariffs. There's £1 billion a year that the UK business is paying tariffs currently but the real prize is also trying to remove duplication of regulations. For example, a soft furnishing company who manufactures cushions or mattresses has a burn test that has to satisfy Brussels, so they put together the kit, it burns and is safe, then if they want to import to San Francisco they have to do the same rigmarole again and there's lots of examples of which many can bring up so if we can try and get regulation tackled, the opportunities to small companies is huge and the appetite out there is as big as well. We've held five roadshows across Scotland with over 250 companies along to them so some of the misguided talk by trade unions and NGOs about TTIP needs to be addressed head on, to be honest. I believe that you had quite an arduous journey to get here this morning so thanks for getting here. It was an interesting journey, let's put it that way. If I could just perhaps from the perspective of the textile and leather industry here in Scotland just contextualise really what this is all about and where our industry sits with regards to the United States. Altogether in Scotland our industry employs just short of 10,000 people and that's directly employed, that's not including the indirectly employed in ancillary industries. We have a combined turnover in the region of £1 billion producing a GVA of around £350 million. Of that turnover about £375 million is exported. Now the thrust of our strategy and we have a strategy in place in the industry that takes us through beyond 2015. We're currently working on a new strategy but quite clearly the impetus for growth is going to come through or we would expect it to come through export markets. Our industry now has reached a particular stage if you like in its evolution where it's very very much at the high added value end of the spectrum. We produce really top quality fabrics, top quality garments, apparel and so on. Typically our customers would be some of the major global brands like Louis Vuitton and Hermes and these sort of people and those products will go into these particular customers and then be exported all over the world from those particular markets really from France primarily. What we are doing in Scotland at the moment is very very much developing a brand identity of our own and that is going to be central to our growth in the future and looking at certain markets it's clear where the potential lies for that growth. So the far east Japan in particular despite its economic problems is still a hugely important market to us. China is, everyone talks about China and China is potentially again a huge market but that's a long long way to go for us in terms of development. The United States is the obvious one, it's the biggest luxury goods market in the world by some distance it still remains that. So it's hugely important to us. There are all sorts of reasons why it's instructive market to approach, there's a reasonably common language, there's a long history I think of understanding of what Scottish luxury textile product is about. So the Made in Scotland brand is hugely important and that's something I'll come to later on. However there are serious barriers in place at the moment to growth and this is what we're hoping at this particular agreement when it comes and we do hope it comes. We're very much behind the need for a transatlantic trade agreement of this kind. We're looking at in particular tariffs as unlike the whisky trade unfortunately tariffs really is a huge issue for us. Not least the weird and wonderful sort of discrepancies that there are and my colleague Benny Hartock will give some detail to that later on but there is a really confused situation where some particular products attract one level of tariff and others attract either a much much higher or a much much lower level. It's extremely confusing. Furthermore it's not a level playing field because there are countries out with the EU who have zero tariffs on their goods going into the States. Now we are directly competing with them but competing very much at a disadvantage. A because they're coming usually from low cost countries but also B because the rate of tariff is zero and we're paying perhaps 14% or in fact more on some goods so that's a serious issue for us. I mentioned also the Made in Scotland brand and there's some confusion at the moment. I have to confess I'm not quite clear about how this is developing but there has been a suggestion that the American side if you like in these negotiations is insisting on a definition in terms of a country of origin label so a Made in Scotland label let's say they're insisting that I think it's three processes at least three processes be processes that have been carried out in that country. Now that may in the face of it sound quite sensible but the reality is that certainly in textiles a lot of our raw material we purchase from out with the UK out with the EU in some instances so you know it could be Australian wool or it could be New Zealand wool. Now that traditionally has always been the case. We don't have the level of production in the UK of wool to meet that demand. Also other fibres like cashmere for example most certainly comes from out with our shores because we don't have the climate despite the weather we've got today. We don't have the extremes of climate where you need a very hot and a very cold sort of spectrum of climate to produce cashmere. We don't have that so we purchase our fibres from outside the country very often. If in fact the Americans are going to insist on this three processes rule then that's going to mean that we perhaps cannot put a made in Scotland label on our product despite the fact that the entire process other than the patches of the raw material has been made. Now we're not sure about that and if anyone is able to clarify that for us that would be hugely useful. But there are other technical barriers and they've been alluded to already by Alan and I think these are serious matters actually for the industry. It adds a huge amount of cost when you have to employ a broker to ensure that your goods are taken through customs in the United States. That can cost something like 20% on to or add something like 20% on to the cost of your product. Now why does that come about? Because actually the United States seems to us from outside to be an incredibly bureaucratic country in many ways and certainly when it comes to customs regulations that's most certainly the case. So getting our goods into the States can be a headache. There are other issues and again Alan has alluded to this on testing standards which in textiles are extremely important and that can be again it can be very confusing, it can be very costly and it's actually duplicating what is going on elsewhere. So that's a serious issue. Manufacturing identification codes is another one. They have one system, we have another system in Europe. We need some degree of harmonisation there so we know that we're talking about the same sort of thing. These are key barriers, technical barriers if you like but barriers nonetheless. But finally what I would say is that as far as we're concerned we have the product, we most certainly have the product, we've got the service to go along with that product. United States presents a fantastic opportunity for us. We can grow business there but we do need to have a level playing field. We shouldn't be competing against low cost countries who are being favoured by very favourable tariff rates and that's not not helping us at all and we need to have these other technical barriers removed or at the very least harmonised. So overall that's our position. Okay thank you very much. I've got Benny and then John. Yes so again maybe just some context on my business. We are a big employer in the border area employing over 200 people and the textile trade is still a very important part both of the Scottish industry and the local borders economy as well. We currently export about 30% of our turnover to the USA and that is by far and away the largest market for us. It's mainly cashmere that we sell into the States at the moment and this attracts a 4% duty tariff. Now 4% is bad enough on a high value product that adds a considerable price for the end customer and certainly detracts from the volumes that potentially we could sell. However if you compare that to the woolen span tariffs which attract a 16% duty rate it just kills any opportunity stone dead. This is a real barrier to entry and we just have to get a level playing field. I mean I had the sourcing director of Brooks Brothers in my factory last week and they by a large part of their cashmere business from us at the moment they are keen to expand that into woolen span products but he's as well aware of me about the problems with 16% import duties and I mean he's looking at options to perhaps knit it in Scotland and then get it finished in Mauritius which is one of the duty free countries that David mentioned which just lowers the costs of importing it into the States and we're just holding back development and potential growth in jobs in the local economy. We just absolutely have to find somewhere to get a local level playing field. Thank you John. Yeah just to thanks convenient to building the points made I think you're hearing the US is a huge market for Scottish exports it's our biggest market accounting for 13% of our exports it's also the biggest investor in Scotland around 40% of investment in Scotland across the sectors is made by the US so already it's you know an incredibly important trading partner and we believe that TTIP could across the various sectors you know really help contribute to the Scottish Government's objective of increasing economic growth and that through international competitiveness we absolutely have to increase the international competitiveness of Scottish companies and Scottish sectors in order to achieve that that growth objective so it'd be really interesting to see how TTIP plays out in terms of the opportunities and challenges and implications across Scotland's sectors. Scott I think maybe you're you're if we get some comments from you and then I'm I think Adam Ingram would like to pick up some of the points on the US market yeah Scott. Yeah I just think on from the life sciences point of view and just a brief background to to some of you who who get confused with the term life sciences as I do. Life sciences spans from everything from making penicillin in Scotland to touch bionics the bionic hand to digital health so ICT applications so it's very broad in Scotland it means about three billion of turnover to our companies and it's been something that's growing and from 2009 to 2012 it grew in employment terms 15% so it's something that we're we're really keen on in Scotland and we're we're very good at it and one of the things that we are very good at is is the regulatory affairs part of it because quality is it's in our genes in Scotland and it's something that we we promote and indeed a lot of the US companies that are here are here to have a footprint in Europe and in Scotland because of our ability to to regulate and to have products that genuinely will not cause harm to patients and I think that's something to be proud of so I think a lot of the regulatory issues that are discussed under t-tip are very important to us and we regulate here in Europe we have standards and if we want to go to the US we have a similar but different set of standards that we have to regulate to which to be honest is a bit of a pain but we've just been getting on with it for years and some of it is for investors if you go down one regulatory path a lot of investors will say well I'm not I'm not interested in investing if it's a if it's the the more friendly 510k equivalence type regulatory path then investors are more interested in that but primarily investors are investing and they're asking you how much of the US market are you going to get with this and the world is a big place we've got companies that don't deal with the US because of regulation and they're doing very well but at the end of the day US is our it's our big big goal for us and we we've worked very well with them and I just see t-tip as a a potential step forward in terms of harmonisation of the regulation a lot of US companies are actually see the european regulation as a less onerous regulation and indeed will try to have their products regulated in the US before they then go back to Europe before they then go back to their home market and then regulate in the US so I think there's an advantage I think Europe's slightly ahead of the game in regulation and I think we can build on that through t-tip to try and get some harmonisation thanks very much Scott Adam yeah well thanks very much for that evidence gentlemen we're kind of genetically programmed to believe that free trade is a good thing and to help to create jobs and the like however I did see some negative comment on the NAFTA agreement from the United States the United States were sold the agreement on the basis that would mean significant increase in jobs and economic activity for the American economy and the opposite appears to have happened and what you've told us this morning is basically you've laid out some of the opportunities that would be available in the American market for Scottish goods like luxury textiles or life sciences but surely there's another side to the coin in terms of the impact of American or North American exports into Scotland and the UK so one of the things that perhaps I'd like to ask John Crawford is what work has been done in terms of the net impact on jobs of if t-tip came to be the net impact of jobs in Scotland which is really what we're interested in so I've heard one side of the argument from you I'd like to hear a bit more in terms of the threats posed by such an agreement John Crawford, do you want to answer that question directly then I'll bring you on that one John? Okay and thanks very much for the question and yes obviously there are going to be implications on both sides for the sectors and companies so opportunities trading out and investing in but also you know there could well be you know implications in terms of more competitiveness for Scottish products and companies and as our market has opened up to US products and services in terms of the net impact on jobs and Scottish Enterprise or Hans Hans Enterprise hasn't done any analysis of that at the minute so that could well be something that you know we would like to undertake as t-tip plays out so we haven't done that analysis yet Okay Alan do you want to come? I guess the answer to that is whether the glass is half full or half empty and in my case it's always half full and the opportunity is there as Benny is saying for him to try and grow his business and there are thousands of companies like Benny's who are trying to create new export markets and create jobs by exporting the US there's already two million jobs that coexist between the US and UK and there are hundreds of big US companies located for example Morgan Stanley in Glasgow that does lots of the back office stuff and financial services and many other US companies who come here so we could sit back and worry about it but let's be positive look forward to treat opportunities and accept it's not a zero sum game that there will be some jobs that will be created in the US to sell into Scotland but let's try and do more to sell into there I would be a bit more comfortable if I wasn't depending on blind faith but with your respect your mark there are there have been many other trade agreements across the world David mentioned the Canadian European trade agreement that comes into place next month and we'll see opportunities arise from there so it's not an unusual step for nations to reach trade agreements or trading blocs to do so and free trade has for centuries driven and Glasgow was built upon free trade to back lords and all the others so it's not something that Scotland hasn't done in the past we did have such a thing as imperial preference of course which might be had some something to do with the growth of I wasn't suggesting a turn to that yeah and I believe the workforce doesn't have very many rights either but that's another story for another day David just a couple of points to pick up on there if I may I think from a scotch whiskey industry perspective trade liberalisation the reduction of tariffs easier operating environment has been fundamental to the industry's success over the last 30 to 40 years I mean there's been at a wto level and get a number of deals since the second world war and the industry has consistently benefited as a result in terms of being able to grow its exports I mean to give you some examples it's only through those trade disciplines being in place that we've been able to get fairer access to markets like Japan to markets in South America some of the trade deals that I was alluding to earlier have been beneficial to us I take the point though I think it's important to stress when you're looking at this in the widest perspective and we have to understand what that picture is and at the same time as the EU and the US are looking at a trade deal the US is facing in the opposite direction and looking to negotiate a trade deal with its partners around the Pacific Rim the to throw in some more letters at the same time as TTIP we've got TPP being negotiated and now those are with countries with a lower cost environment than we have here in Europe in my sector if you look at the countries involved in that negotiation you've got the likes of Chile Japan Mexico Peru all of them produce high quality spirits we have to be alert to that and that's why making sure that we have the best arrangements in place with the United States to promote that trade is important because if we don't you know there's one example there's already an agreement that is just as far advanced in terms of negotiation probably even further advanced that will change the dynamic in terms of trade relations with the United States so we need to be alert to that I think there's just like one other thing I wanted to pick up on if I made us from earlier remarks from from David which were very interesting the technical side of things is that the rules of origin arrangements are notoriously difficult and the negotiation is still at a very early stage in that respect so I think there's still all to play for there David from a spirits industry perspective we've tried to be proactive in this sort of area so we've been working with the United States spirits industry and through them the USTR ourselves with the European Commission and other European spirits partners to get ahead of the game and put up a potential spirits annex to this agreement which tries to take head on potential issues and put in place the sort of standards that we believe would be appropriate right across the US and the EU for our sector now that would have a benefit in terms of our industries exports to the US but also as I said right at the start of my own remarks it sets a benchmark that other trade agreements then have to reach the TPP countries are trying to do exactly the same thing so we have to stay ahead of the game here be proactive and that's where you can gain the advantages of the agreement thank you Adam do you want to come back on that well as I say I think we're perhaps represented here by sectors who would obviously benefit significantly from an easing of trade barriers with the United States or regulations and alike but there may be other industries which might suffer I'm thinking perhaps of the food industry in particular where American imports might have a significant impact here and I'm astonished actually we don't actually have a hard and fast figures in terms of estimates of the impact on jobs or in our own indigenous companies of this agreement impact assessment until we know what the outcome is I mean if if as we hope it's a fulsome agreement that the tackles reduces tariffs and use regulations then impact could be good if it's less ambitious and less successful the impact will be less so until that outcome is known the figures themselves could be open to severe scrutiny the figures that have produced are based on a middle ranking result but if we push for a higher standard then it's not going to get a lot bigger but I don't think it's unfair to expect to have figures on something which haven't yet reached agreement on if I mean in terms of the food and drink sector Adam there actually hasn't been a round of negotiations yet on food and drink issues we've had seven rounds of negotiation the expectation is that the first discussion will take place in February next year so there's still as I say there's all to play for here by making sure that Scottish interests are as well represented in the commission's negotiating positions as possible okay the other aspect of this is of course the level of investment in Scotland from from us companies and one of the reasons that we seem to attract attract a fair bit of investment from the US was for those companies to enter the European market as it were to have a base within the EU now if we're going to liberalise trading investment between the US and the EU is there not a threat of disinvestment in Scotland as a consequence of that because the people can suggest it's the opposite there's even more reason to be based over here because the opportunities for them will be bigger and one of the reasons they come to Scotland are many reasons but we have a highly educated workforce our costs are lower than many other locations across Europe and we've ready supply of labour and we have good contacts with the continental Europe so the reasons why they could come could become more as long as we avoid increasing costs on business which some some people wish to do then they then try to attract to scott could prove more difficult yeah and just to build on that as i said earlier 40 percent of scottish investment comes from and the US and that's compared to an overall UK figure of 26 percent so it just shows the attractiveness of scotland as an investment location for us companies and just to also that that investment 40 percent of scottish research and development expenditure you know comes from these US companies so it's incredibly important when the US companies come in here and they're creating jobs and i know that scottish development international have helped to secure over 13 and a half thousand jobs from US companies over the last five years we've also got major employers such as amazon that employ 3 000 across four sites in scotland we've got morgan stanley is alluded to earlier employing 1200 in Glasgow and hula packard 1400 nerskin so US investment is incredibly important at the minute i think there's a strong connection scott is incredibly attractive as a place to invest particularly for US companies so you know building if there are things that could enable that make it easier then you know surely it's going to be a good thing and it's also a good example sometimes American businesses are portrayed as being uncaring large multinationals that are just over here to kind of take advantage of us in the head back home memex which was based in East Kilbride a software security company found i think 10 15 years ago grew to a level where it became attractive for purchase from a US company and it's now it was bought over by SAS and the number of employees increased and it's now reaching markets never used to before which is another example of where cooperation as long as we've got the skills then the US will come here and create jobs and opportunities for our people which i hope is what we're all about scott well i think your concerns are valid to be honest but at the moment for us we take a sledgehammer to crack the nut to get into a yet america and we'll set up operations in the US just to get a head start into their regulatory process so if there was a harmonisation we could get around not having to set up those operations the barrier that the US companies have or the reason that they wouldn't stop investing in scotland is it's the people it's the quality it's that regulatory framework and we've tried through outsourcing our manufacturing to places like india or even to the US and i think if i look at the US in the NAFTA agreement and what happened in the automotive industry where they tried to outsource a lot of their quality automotive jobs to to mexico and in fact mexico had a better quality standard at the end of it and that's why they've kept the manufacturing there and i think that's the same parallel we can have in scotland is that we could have an agreement like NAFTA for all the flaws but at the end of the day the american companies would want to be here global companies would want to be here and we have global companies trying to locate in scotland one of the issues we have in scotland that i think is a detractor if you don't have a notified body to regulate companies in scotland it's something as the life sciences association we're looking to to do and if we had that then that would be another incentive for companies from all over the world to come to scotland to manufacture well regulated high quality products which then you could send throughout the world the outsourcing that GSK have done in india for example they've brought it all back into scotland and we're seeing the plants for GSK up in montrose and down in urban as you know they're increasing footprint at the moment so we've kind of been down that route and you know it's coming back because of the the good people and you know back to the research and development i think a lot of the money that's going into research and development it goes into our universities but i think the important thing for me for the universities is that we are training and upskilling graduates that can come out that have an expertise in the quality in the regulatory framework and being working with universities like edinburgh napier and glasgo caledonian to make sure that the graduates coming out have that quality have that regulatory skill that you have a source of those people in scotland so we're working very fleet of foot at the moment to make sure that we've got the things that the american companies just don't really get to grips with on quality that we can in scotland okay rhod caml next vina i'd just like to follow up some of the themes of my colleague adams i've already alluded to and particularly to pick up some points which were made in evidence in a previous session by steven boyd of stuc which i took to mean that that it wasn't rejecting the possibility for one of a better word there being a good ttip but just that the information and evidence wasn't currently there um i think it's also been accepted in evidence uh before select committee in the house of commons in london that the cbi hadn't done an economic analysis of the impact on different sectors and mr boyd when he gave evidence said that even if the model that the commission was using was correct it would imply an annual increment in gdp of about 0.03 percent and that the models being used to promote ttip's benefit explicitly do not include those areas in which it could have a detrimental effect on growth and jobs you mentioned patents and the cost of drugs very important to remember that ttip is not a free trade agreement it's about common regulatory structures big pharmaceutical industries will seek to ensure that their patents are stronger longer and more far reaching i think we know enough about the dissemination of knowledge on economics to know that that will have a negative effect on the wider economy over a longer period and the models used just do not consider such issues i'd like to put that out for general comment and discussion do you want to come back in that score i was thinking given this um so i mean the patenting issue i don't think patents are part of the ttip agreement it's certainly something that we've dealt with separately and we now have a european wide patent that's incredibly helpful to us i think on the on the us side it's still you're not likely to get the same level of cover in your in the us that you will in europe i think that's a separate issue the fact that the pharmaceutical companies are looking for increased cover on their patents is crudely to cover the cost of developing these new drugs i think going back to the cost of developing penicillin versus the cost of developing some of the newer drugs it's now into billions of dollars i think if you look at synofia ventus's last drug if you look at how much it really cost them i think it's probably up in the sort of 11.8 billion for them to develop these new drugs there has to be some kind of an incentive that they will get a return on that so i i kind of get that i think for for any new looking at some of our smaller drug development companies trying to bring products to market you're really looking at working hard to get that that patent cover i don't see the other side of that coin being of greater economic benefit than having our drugs manufactured in scotland there's not a general comment really about that we're getting kind of one side of the coin the opportunity side of the coin and we're not we're not also looking at the other side of the coin and no work the last session was 100% on the other side of the coin or the last session of the evidence that you took yes but yeah okay but what we're trying to get at is what analysis is being undertaken across the piece does it work about you know what the impact might be both you're presenting a pro side of the coin but i don't really get any impression that you've looked at it in a big way at the negatives well i think i think we have um i think the reality of um but where's the evidence that you could share with the committee well the evidence i'll give you statistics if that's helpful that if the regulations are removed which is the hope from the outcome of successful t-tip and the saving and cost to businesses such as benes and the others trade bodies representatives could be eight billion which a lot of money that could be saved which is currently spent by by uk and scottish businesses um you've got tariffs which david referred to earlier you've got tariffs bizarrely on synthetic woman's quotes at 32 percent it's slippers at 26 percent so if you're a scottish slipper maker if there are any then the the savings of 26 percent could be huge to their business you've got benes at 16 percent who may have to face the ludicrous position of setting up an outsourcing arm in Mauritius which i wouldn't mind applying for the job helping them there but um so the evidence is all around you of how the benefits could arise from a free trade agreement what about what about analysis of the losers but well the losers but um let's let's look but i would i would hope um mr camber that we'd rather look who could be the winners are going to be and the jobs and new constituencies and the other msfuture on this table the harsh reality of trade is for every company who sells something someone else doesn't but let's try and be in a position where it's our companies that are making the sales i think it's a yeah sorry thank you um i think it's a trade body representing the the textile leather association basically we can only look at it from from the point of view what what benefits would accrue to our members and that's the approach that we've taken today we've come along today to try to express uh our frustration actually at the uh the barriers there are to growth in terms of our business with the united states and those are quite clear uh benny has articulated that perfectly well i think in in very real terms his business uh with a particular customer who incidentally is one of the biggest customers in the united states for scolish products groups brothers um that could grow significantly if that particular barrier were to be removed or at least if he his business was on a level playing field with uh with other regions out with the or the producers out with the eu so we can only look at it from from that perspective and from that perspective it's it's it's all a win now i understand completely and the one thing that hasn't been mentioned here i mean i read the newspapers uh as anyone else does and i'm well aware of the problems uh in this regard with transparency the problems about american corporations dictating to governments uh basically what their economic policy would would be as it seems to me but i can't come here and comment and that's not for me that's for economists it's for politicians it's uh perhaps a scottish enterprise actually to be looking at this kind of thing but i represent uh the textile industry in scotland i know that if we if at least as part of this agreement we get that playing field leveled then we will benefit as an industry very very significantly now that may be a relatively small part of this agreement but for us it's an extremely important one and that's that's what we understand David thank you i was just a couple of things there i agree with what davis just said about you know i represent the scotch whisky association i can give you a scotch whisky association perspective of what this agreement would mean for my industry i said right at the start i mean it's an unusual negotiation for the whisky industry in that our usual big ticket items are not on the table we already have a zero tariff for example that doesn't mean there's not a potential opportunity there if you removed the remaining customs border fees that are applicable to our industry our assessment is that that saves the industry about four million pounds a year you know from a couple of border fees so that you know there's some work done there regardless i would also just want stress though it's easy just to focus in this one agreement but i think it's important that politicians look at that wider picture because if you get it right in this agreement this has a very significant knock-on impact to other very commercially significant agreements that the industry is looking at so india if you get it right in the us the indian market it's 150 tariff we face going into that market it's a huge potential opportunity for the whisky industry you could grow that market from one percent market share to five percent market share in relatively short order if you got the the agreement right and this sets the right benchmarks we need to take that wider perspective i think on the transparency side our experience has been that there is no lack of willingness in the part of the european commission no lack of willingness in the part of the us tr no lack of willingness part of the uk government to talk to stakeholders to take on board their priorities and to share information i mean we know the lead negotiator mr bercero very well he understands the industry's perspective he's willing to talk to industry sometimes though you have to go and ask to make sure that they understand where you're coming from so i think from our perspective we've been pleased with the the opportunities we've had through a number of different avenues we're not shy about going and asking as an industry and that's important you can't always expect people to come to you to to hear your views and so you have to take that opportunity i think the other thing is i mean there's there's undoubtedly a recognition in the part of the commission that more needs to be done to make the negotiation as transparent as is possible whilst acknowledging this is a negotiation and you don't show all your cards during a negotiation so commissioner maelstrom since she came into office has been absolutely clear that she wants to make negotiating texts available as as and when is possible and when it doesn't compromise the opportunity for the euw to get the best you're possible for jobs and growth right across the the member states get we've we've invited the lord lovingstone we've invited the commission and the scottish government as well for our future so we're taking very very very broad view on this i've got hands island i've got everyone who's indicated to me that they want to come in and i'm going to just take them in turn so that everybody gets their shot i've got hands island it don't fear you're all getting it don't worry good morning and welcome gentlemen to the committee this morning um i wanted to ask david in particular about the code barring you you refer to in terms of your products and in terms of our codes are different from their codes could we not double code our product so that you don't have that problem yes i i guess you could but uh you know why would we want to add more um more hustle basically you know i think i think the important thing here is harmonisation and i think that's where i remember i mean we're we're we're dealing with a far bigger partner than we are and their their expectations from us are higher and i don't i mean end of the day it's who dares wins and who goes the extra mile wins the cherry and i think it in terms of products i mean i don't think it's such a huge deal that you know to to have a double coding is going to put you out that much i just i just i just wanted to just bring that to your chances maybe a small consideration might be helpful in that aspect another aspect i wanted to talk the other point i wanted to bring on board was about um no direct imports in certain products in terms of taxation and um one of the things that was mentioned about that you have to send your products elsewhere before you can take them straight to the us um and i'm just wondering whether we can actually negotiate something quite special for scotland a very small trading post i think that if we can possibly have our cabinet secretary to have a stab at negotiating a tax-free zone for scotland on its own right i know that there would be complications in terms of you know what is actually produced in scotland and then sent to the us and we could we could have various they could have various conditions attached for example having at least three um three forms of work on a product before it would be considered scottish for that free zone um what's what's the opinion around the table about should we have a stab at something like that that i mean we don't want to send products to other countries nor do we need to it's simply to reduce the import tariffs into the states i mean it was a request from one of our customers to look into this it's not something that we are particularly interested in but it's to reduce their costs of buying the product effectively from us so if we if our politicians tried to negotiate something for our industry that is you know Scottish firms are are manufacturing something or treating something making the product in scotland so in essence it becomes a Scottish product just because the raw material came from elsewhere doesn't mean that all the processes were done elsewhere if we could satisfy our customers that we are making this product for you to a certain standard um it could be considered as a free import would that be something worth pursuing i mean i don't want to ask our cabinet secretary to pursue something if you the experts and the sellers won't find it helpful but if you think that that would if there's a mileage in that we could try and pursue that as i said earlier actually we are unclear at the moment quite what is happening here in terms of the this i am alluded to of three processes which you mentioned this is something we've become aware of only in the last day or so and we're not clear about whether this is in fact a part of the us negotiating position or quite what it is it's first we've heard of it but it certainly is of concern to us because it means that raw material that we purchase from out with the eu then doesn't become it's not one of those three processes so it it could be a problem for us but we're we're not clear on that so i'm sorry it's um what you suggest could perhaps be an interesting way to to look at it but at the moment we're not clear enough about what the problem might be so but it's perhaps something to bear in mind i'm sure your view on them who dears wins i think it'd be perhaps rather ambitious for the Scottish Government to start setting up its own separate t-type negotiation between scotland and the us and i think our your efforts we've ever spent influencing the current negotiations rather than trying to establish a new trade agreement i certainly admire the mr malik's ambition in terms of the idea but in reality it simply is not going to to happen in this negotiation remember you know this deal will need to be ratified by 28 different member states you know 28 27 other countries are going to be looking at this and thinking why not so even on our own side in terms of our own negotiating position as the eu it's unrealistic at the same time you've got tpp partners in the pacific rim who would be looking at why for one particular part of the eu and not for for the countries of that negotiation in terms of the context i don't think it would run very far and you have to understand also the us mindset in relation to this in terms of importing products at the moment you have to deal with bioterrorism laws you have to deal with food modernisation legislation you still 50 different us states to deal with as well at a sub federal level so when you put all that together it's a very complex playing field and a particular scottish dimension to that in terms of some sort of tax free zone would be unrealistic i think if you if you look around there are examples where some countries in south asia for example have been given preferential treatments where their products particularly cotton is allowed to come into the the european market there are examples around the world where we can piggy bank on those examples to say well okay and i'm talking about something that why also i totally agree with you in terms of we try to influence the current negotiation that is happening but i think we might want to look outside the box and say how do we improve on that and remember we we are a quite pacific market we are we are quite a limited market but we are very specialist market and i think those in themselves open up the idea of perhaps looking outside the box to say how do we speak to some of our major trading partners to say listen how about looking at us in a slightly different way in terms of you know one ensuring that we can continue to supply the quality and the the specialist product that you are looking for but also give us an opportunity to be able to do that to compete with with others because we're not competing life for life we have something quite unique that we are offering them and therefore they might i'm just say thinking that you know if we go to the the US quite regularly in terms of marketing Scotland and its products perhaps we should we should be going the extra mile ourselves to say well okay we've got this on the table just now and this is what this happening and this is what the whole crowd was a dealing with however it's only you you're the ones who're going to tell us well there might be some ilegenda okay it might not happen today but the fact still remains that if we want to open the door we have to start somewhere before i bring in i've got a scott and david and i think maybe the scott's whisky associations in the best position to you know understand possibly that yeah the department of trading industry might be very interested in Scotland going on its own on these things given the legislation the regulation is reserved to Westminster so i think maybe that's something we should put in context scott and then david yeah well i'm happy to explore that with the cabinet secretary i think it's challenging but you know why not we have a good relationship on the medical device side for example with Minnesota Minnesota is probably the world leading place for medical devices and it's certainly the leader in in the us and we've had very fruitful discussions and over the rider cup for example and they're going to be hosting the next rider cup and we have agreed with them and in fact we spoke to alex neill at the time to see if we couldn't have some kind of a delegation going over to talk to the Minnesota government and industry in Minnesota about how we could work more closely together and that was welcome so i think we're in an even stronger position now that for the next rider cup we'll have uh nicolas sturgeon will actually be there because there'll be a hand over so there's an opportunity there i think it's challenging in terms of where we're regulated in europe and uh with uh biz and and these issues but uh there's certainly a an openness from the us side to to have discussions on how we could work closer together and certainly one aspect of that is is um our work with the uh with the nhs and what and how we work very closely with the nhs uh very conscious that the nhs is a big issue for t-tip um that same issue is not an issue for us in in scotland because we have a good relationship on developing products for the nhs which will shift the balance of care reduce costs all those things we are not interested in privatisation the nhs in scotland from an industry point of view and indeed we would probably support the scotland Government and fighting against that as part of this agreement i believe phillip hamont has said that scotland should seek out an express opt out on its nhs services and i think that's something that this committee and this government will probably pursue very vigorously actually well well it's doable because um we had the nicolson review which came out with a a set of recommendations which um as far as i know nhs scotland didn't have to actually take up and indeed they have gone down or we have gone down a different route in scotland under the health innovation partnership banner where industry and nhs work very closely in in the nhs helping industry develop products which are of use to them and also in industry coming to the nhs and well what are your needs what what kind of products are you looking for and that has been something that we've started since the statement of intent and which was announced by nicol at the nhs conference in 2012 and that's now a position where we've got 55 companies working very closely with the nhs developing products for the nhs which once developed and bought by the nhs nhs is not going to be the biggest customer buy away for us but the fact that the nhs is buying scottish manufactured products is a huge selling point absolutely huge if you look at companies like touch bionics the bionic hand that sell mostly into the us but through that new partnership they've managed to come from a position where they've never sold to the nhs in scotland never sold to their home market to now selling six bionic hands just to come back on hands on us suggestion which i agree i mean if we if such a thing were possible that that would be great i think it hugely unlikely however i share david's view on that i think it'd be hugely complex thing to try and achieve what's much simpler from our point of view is to get that level playing field and that's the really important thing that we need is to get the our competitive position relative to producers from out with the uk to get that on to a level playing field to remove the barriers that are there these are if you like technical things but they should all be part and parcel of any negotiation of this kind and and if our negotiators our european negotiators are strong enough in this then i would like to think we would get the result that we need and that seems to me to be a much more obvious and much easier and aware i don't think it will be easy but hopefully it will be something that's achievable so that that is really the central thing that we we wish to see john did you want to come back in some general comments about just a couple of words to come back on i mean just to go back to the previous conversation around there are opportunities but there are also challenges and what we will be doing in the scottish enterprise scottish government and how and ziles enterprise because there's various national bodies responsible for the economy we will be working very hard with all the industry sectors that are implicated by this not just the ones here today but also energy with oil and gas with with chemicals with them with creative industries so we've been working very hard with them and the national institutions to really look you know once we get into these particular sector agreement and negotiate discussions really look hard at you know what's happening what the implications are and make sure that you know we're playing scotland's advantage the other thing that i'd like to say is speaking to a couple of mds of companies that they do trade with the states and and it just brought home you know that the escape whilst the us is the scotland's biggest export market and that many scottish mse smes are very keen to export there it's a very complex you know market there's over 300 million people there's 50 states all thrown regulatory frameworks so it's a very complex market to get into if you if you're not aware of it so anything that can help to you know make that transition make that journey into what is a complex market would be welcome particularly for scotland which has a very broad sme base 300 000 smes the vast majority of whom are 10 employees or less so it's really hard really important that we work with our company base and to get into that market and we've obviously got scottish development international out there with five offices in the united states so you know we have the channels but just the last point and speaking to an md of a company yesterday they were saying that you know in america and in united states and they have a sort of by america you know policy anything that can help to get a company to drive a usp that unique selling point that's the big differentiator here you know if you have an equivalent us product trade or good of service that is viable they wouldn't really look at a foreign one but if you've got a product or service that genuinely has a unique selling point you know that's where that real niche competitive advantage like whisky like high luxury textiles that's you know that's the big winner here and just to go back to what i was saying earlier we absolutely have to get more scottish companies that SME base we have to get internationally active we are not internationally active enough as a nation we reckon we need we need around 5000 more SMEs being internationally active just to get to UK export levels so you know we've got a big task on our hands here and if this is our biggest export market then as i said earlier something that can that can you know help enable trade investment on both sides and make that that commerce easier is to be welcome out of the third right one of them is health related we've got Craneware which is a technology company based in Edinburgh and it's so customer based as us hospitals so all it provides to is the us health service and we've heard lots of ill informed comments about the dangers to the NHS but there's a company that's actually doing business from Edinburgh into the us health service which is worth members thinking about and employees and creates taxes to pay for the services in Scotland we also have Sky Scanner a travel based technology company started in Edinburgh six people started up next to the Edinburgh University because of the excellent graduate it produces is now going office in Miami and it's taking on Kayak which is another travel technology business in the Americans backyard and lastly you've got Fanduil which is a a gaming sporting related business based in Edinburgh which has grown across the us and that the book backs up joins point that Scottish companies have got the have got the usp technology to take them forward and they need support and tita can help provide it but also need to avoid their cost increases and so policy makers have to consider that as well excuse me if i'm sorry but we've got lots of members want to get in and could you please let me know if you want to get in because i know we want to have a bit of a fair flow conversation but i've got many members and many other people needing to get into the conversation as well Jamie you've been waiting a while oh well thank you and i'm sorry i wasn't here at the start convener just in relation to what John Crawford said the Scottish North American Business Council explained that it had organised two roadshows in Scotland and the key lesson from the roadshows was the potential benefits for SMEs and the message really was that the smaller you are the more the huge obstacles which businesses face when doing business with the US that the smaller you are the more these obstacles get in your way now these negotiations have been going on since June 2013 and there's been seven rounds of negotiations have so far taken place and the agreement is more encompassing than a normal free trade agreement because it just it's not just about learning of tariffs but also about regulatory regimes there's an awful lot to be told about this now we have received the committee some evidence from stakeholders that there's a lack of awareness across the Scottish business community about the TTIP negotiations and i have to say that last week i went to a briefing from one of our largest banks in Scotland on food and drink a business a breakfast meeting and when i asked a question about TTIP they hadn't heard of it which i thought was rather astonishing and my question i suppose probably is to first of all John Crawford i suppose is to say you know what is the work going on to make Scottish businesses more aware of TTIP because you you were saying yourself you needed another 5000 SMEs to to get involved with this is there enough you know halfway through the negotiations nearly now um or possibly it is enough being done here to make people aware of all of what this this agreement actually means in terms of opportunities for for businesses especially so just to go back to what i was saying i think it's really important that the national agencies alongside industry channels like the institute directors and cbi and the chambers of commerce and the business gateways that we we collectively understand to get a better understanding across the sectors of what the implications are for our companies and really help to you know get the message out um but it is a challenge but to go back you know most of our scottish companies are small and medium-sized enterprises very small ones so we absolutely have to work the channels and it's not just TTIP it's trying to get them much more internationally competitive and that that is about the only thing that can really improve the scottish economy can i just add something in that chamber the scottish chambers of commerce when we asked them to come to committee said they didn't think they were in a position you know to to have enough information to to give to the committee so there's maybe a bit of a job of work to be done there and we did get some written evidence from the cbi as well jamey sorry can i just oh can i go on of course yeah well independent studies have projected that the eu exports to us would increase by 28 percent each year as a result of of a good t-trip agreement and it also just predicts that the UK economy would given a be given a boost of 10 billion each year and i think scotton was something like 1.7 billion um why would it surely if the if the independent studies are projected that the eu exports would increase by 28 percent why would the UK only only benefit by 10 billion and surely this would be an increasing figure would it not it's very it's very hard and the part that might be earlier on in evidence it's very hard to give precise figures but the harsh reality is if you saw an increase in exports of that level then the benefits the UK and scotton would be very significant would be as far as i'll go okay i've got willy coffee can i just one last point very quickly we talked about businesses um i would just like to discuss with witnesses the possible benefits to consumers in scotland uh from a good t-tip agreement uh benefits to consumers would be they could hopefully be when the retail sector which is thriving at the moment the the costs of american goods coming into the UK would could be cheaper and also the those who go on holiday to the states could buy um benny's jumpers a much more reasonable price than they can currently another goods over in scotland okay jimmy yeah willy coffee much convenient good morning to the panel i mean there there have been some precise figures shared with us around the table already allen you mentioned a potential saving of eight billion and both david and benny have mentioned some of these percentage duties and so on as high as 16 percent and higher so if these savings are realized i'm absolutely certain that that's welcome to be welcomed but there is a quaint pro quo with t-tip isn't there what is what is america getting out of this presumably they are also looking forward to harmonisation of regulation and reducing tariffs to perhaps zero and i suppose my question from a naive point of view is why is it not been possible up until now without this thing called t-tip being invented if that was always possible to do what were we waiting for so long to to try to to achieve that and isn't a concern that was expressed at one of our previous sessions that what's happening on the back of t-tip is providing guaranteed and legal access access to our services products and services within the european union and that's where some of the concerns are coming from that have been shared with the committee previously so a what's america getting out of this that they couldn't already have gotten out of this beforehand without a t-tip and are the fairs genuine about giving legal access to services within the union that hitherto may not have been available what's america getting out of it the opportunity to sell their goods more easily into the us and for their companies that are many of them as i've mentioned earlier already based here which we shouldn't forget that the companies that are based here are more likely to remain here and companies such as sas who have purchased the Scottish company and grown it companies such as morgan stanley hp and others who are based here are more likely to remain here but the harsh reality is we saw in the 80s some companies invest in scotland and then when the climate changes they leave and if these chains are brought in that's less likely to happen which is good news for your constituents and the scotch economy and it frees up trade both ways so that Scottish businesses can sell into us but what's in it for us is a greater access to the european market and but then the that creates supply chain jobs for the for the businesses that they are looking to invest in and create opportunities for employment and growth but is that what's coming about through the t-tip i mean harmonising regulations and reducing tariffs was always in the agenda but the harsh reality now it is though that's my point it is now so what is the gain or the big win for for example the us to agree a t-tip arrangement with european because it's very difficult to achieve those those harmonies without having some kind of trade agreement running alongside it it's not as easy as that as that sounds many trees have died in the in the cause of trade agreements over the over decades and it's not as easy to achieve as that as that sounds and the last point about the legal challenges since 75 the UK has negotiated 94 bilateral treaties almost all of which included ISDS provisions and it's important to note that UK investors have brought at least 43 ISDS claims to protect their investments and the way that this challenge has ever succeeded against the UK it requires that the last meeting ISDS was raised some great bogey that would allow businesses to or sorry allow governments sorry allow businesses to attack democratic governments the harsh reality is idea ISDS is it's the reverse we'll have used for it's for business people like Benny and others who face harsh treatment from governments they're there to they're there to protect them which is sometimes forgotten in the argument put forward by those who are opposed to it. David I think you'd come in because your bat would be tariffs your industries bat would be tariffs for years and maybe give you a bit of insight into what's happened so far. I've lived this for a long time Mr Coffey so it's it's a it's a really interesting question I think you have to think back and look at the context why has this not happened before it's not happened in recent years because of an economic recession and during that time people become more protectionist in terms of their own industries rather than looking outward and looking for trade liberalisation things like beef hormones airbus and Boeing have been huge trade disputes between the EU and the US and there was no way of starting this sort of negotiation until those sort of issues had been resolved or at least parked in some sort of way so the context has has gradually changed and that's why there was an opportunity to do something at this stage the regulatory approaches side of things it doesn't make headlines but the difference in regulatory approaches between the EU and the US shouldn't be underestimated and getting different regulators around the table to look at this sort of issue is a long term piece of work people are protective of their of their own patches and their own approach and that's why from a from a whisk industry perspective we've tried to look at this slightly differently by putting up a joint proposal with our American colleagues in the American spirits industry who've already spoken to their own regulators about it as we've spoken to the commission on our side to try and cut away through it because it is very difficult even in a category like whisky or the wider spirits industry there are different interpretations different approaches and so regulatory coherence is something that is a prize whilst it may not gain many headlines the day after a t-type negotiation is concluded so is guaranteed access to our markets and services then not a concern that you share I think from the US side that I can only speak from a spirits industry perspective this is not going to dramatically increase their access to the European market in the same way that when I started I'm not suggesting this is going to have a dramatic increase in terms of scotch whisky exports to the US it's that bigger picture for us and from the US side they are looking at to make it easier and labeling certification and testing in different member states not suggesting this is a UK issue but in different member states in the same way that we would like to see a more harmonised approach in those sort of areas across different US states as well as at the federal level okay Scott I think on the on the regulatory side I guess the concern was maybe it's a raise to the bottom in terms of lowering the standards and the US could potentially move us to a less regulated less quality type framework I'm pretty sure that's not going to happen I think regulation change is a difficult thing for us at any stage and we're going through some major regulatory uplifts at the moment in both the material medical devices regulation and also in the in vitro diagnostics regulation and that is primarily come out about because of the pip scandal on the implants so it's unlikely that the European Union are going to lower those hurdles so if anything the US are going to have to raise their game if they want to deal in Scotland and do they have the ability to do that it's having lived in the US it's going to be a tough one for them it would be much easier for them to get a footprint into the into Europe to start manufacturing their products to that higher regulation so that's that's the potential downside for the US and maybe why they might not be that interested but they won't be able to sell their products into Europe unless they comply with these new regulations anyway and access to public services and you know I think we all know it's very difficult to access the NHS be it a US company or or be a local company I don't think that's going to stop and I think having worked with the NHS now for for several years again it's you're not going to be able to sell it unless you've got the highest possible regulatory standards so I think again we're that's going to be something that will will will be of benefit to us the US might just walk away from the table I'm just saying we'll just keep doing what we're doing if we push on that one I think that would be fine but you might lose out in some of the the tariffs are you quite clearly saying then because some of the concerns that's been raised with this committee is that there would be a race to the bottom on regulation it would be the lowest of standards rather than highest of standards are you saying that the opposite of that's true would be the highest as an industry we're not going to lower our regulatory issues and I think in the US being a highly litigious environment it would be very difficult for a hospital to take a product of lower standard if something goes wrong they will get sued if there's a higher regulatory product out there and that's that's a benefit and our opportunity for Scottish companies to get into the US that's why we're keen to go over to Minnesota because we'll be able to give the US hospitals products Craneware for example a good example here's something that you won't get sued on I just finally on that point that scott raised there Dr and Rian jelly and her evidence told us quite clearly I think that the european union doesn't have any competence and health related services in any case and that the risk doesn't come from tita because of that so I take it from what she said to the committee was that if there is a risk to providing access to UK health services then it's it's a risk that the UK government has most influence over and that was my understanding of it the european union doesn't have any competence in that area to to give that away as part of a tita agreement that's what's confirmed to Europe as part of the member state yeah Alex Rowley and thanks I mean I think they're perhaps a differently come at this is what's in it for for the US because a note scott said there about the US walking away if you know if we stick hard and fast to regulation and in other areas and it may be I mean the point that David makes that in terms of tariffs for for your sector that that's important I think where we need to get to that really is more for John in terms of whether there is more analysis that needs to be carried out and as it's Scottish enterprise that needs to do that and what are the sort of key sectors that are that are exporting into United States what are the key sectors that there would be influenced by this if you mentioned earlier for example in terms of the American companies here but perhaps not the best example was Amazon you know where where if we look at the kind of employment standards and sdc where we're raising this when you talk about a race to the bottom zero hours contracts now it's true that across and of family right now people are are glad to be be working and having having an income of some sort coming into the Christmas period but that's not really the type of economy that we see for the future of Scotland surely it's about an economy that's a high skilled high wage economy and I can't help but think that in terms of regulation go back a decade and you know politicians were lining up as were others to talk about the light touch regulation that we needed to have within the financial sector and then we have a global economic crash and suddenly suddenly politicians are being blamed for for that light touch so in terms of regulation I think these are issues if I can really pull it back to this question of transparency for me it's not just the transparency the negotiations themselves because that's important and I think David Martin and other MEPs that we took evidence for a few weeks ago said that there was greater transparency starting to come through but it is the transparency of this whole agreement because it is raising concerns and the public are starting to become more interested in it and hopefully the work of this committee taking evidence for yourselves and others will will will actually bring a greater transparency and understanding if what this agreement is about so for example I think Alan you and evidence talk about significant benefits to companies on both sides of the Atlantic presiding major boosting jobs and growth my glasses always have fuel as well but I think we need something a bit more that takes it a bit forward because you do talk about raising global prosperity yet right across the globe we have widespread inequality deprivation and poverty in America is perhaps one of the most unequal countries in the world and people across Europe are starting to I think speak out about the levels of inequality that exist so we do need the evidence to start backing that up you know it can't just be yeah but Malahood an apple pie yeah I appreciate that but the point I've made earlier it's very difficult to the the the evidence shows that the the reductions in tariffs will allow for your trade to flow which will benefit exporters in Scotland. The reductions regulations will reduce the duplications of costs of companies who currently have to comply with European regulations and then I put off by the cost of considering going across the Atlantic as John mentioned it's a very uh it's a very big step to make to serve the business in the US that's quite daunting to do and if you're facing increased costs or new regulations you might put it off but the harsh reality unfortunately is if you look at the economic picture currently you're seeing the challenges in Greece and other parts of the EU where those economies are facing evidence of fuller slowdown thankfully the American economy is continuing to grow a pace which then gives us opportunities to take advantage of that growth and Scotland has as David mentioned has built up great historic links with the US so the opportunities are there to try and build those links and the t-tip can't help to achieve it. I don't think it's isn't the issues raised over inequality and any of such is that a trade agreement isn't going to be any strict solution to tackle those kind of issues but it is interesting to consider why the Canadian trade agreement hasn't raised anywhere near the same level of attention as the US EU trade agreement and on the 10th of January the Glasgow City Council is hosting a dinner to commemorate the 200th anniversary of the birth of John McDonald the first Canadian Prime Minister and Canadian foreign ministers are coming up to try and push forward the benefits of trade between Scotland and Canada and it's a shame that the t-tip has got criticised I believe unnecessarily. What about the regulation do you think that we are looking at more like-punch regulation? The point that Scott has made is that it will be the highest level of regulation that won't be rushed to the bottom it will be maintaining high regulation so that consumers have confidence in products. We now have a transparent consumer who's very concerned with what they buy and I don't see any evidence that will be rushed to the bottom regulations we maintained at a high vigorous level especially in the US which has also been mentioned to a very religious society. Alan in your written evidence to the committee you raised some issues around about the investor state dispute mechanism and we've had lots of evidence to this committee where even just on our Twitter feed on very very grave concerns about that and you're saying you know in your evidence that it's a way to protect you know and ensure that businesses aren't discriminated against or whatever under you know changed to legislation and regimes within the actual host state for instance but if you look at the Egyptian model where the Egyptian government increased their living wage which maybe is where Alec is coming from as well where they increased their living wage and then became subject to you know a challenge on that and you know and costs related to that. How do you marry these two things up that you know this is a good thing and it protects people but when states actually take action and like you know bringing their minimum wage up up to a better level then that has an impact on that state. The point I made earlier about the figures that have happened in the UK that there's not been one case against the UK which has been found against us and there are 43 cases which have been taken by UK companies who have faced harmful changes to their regulations which impact upon their business and their jobs that they have been successful in it and I don't think because one business takes action against the Egyptian government then that whole notion should be rolled out of hand and that overinflated fear should be given currency. Okay okay and I take that on board very much so but let's just say in the Smith commission the Scottish Government eventually you know negotiates the ability to you know change the minimum wage to a living wage would that then make us subject to something like the Egyptian situation? It's unlikely because I with all due respect to the Egyptian economy I don't think because you're comparing like with the Scottish economies a mature economy and we have good standards of pay and good working conditions and I take Alex's point about to do our contracts and those kind of issues but by and large we have a workforce which is well regulated and actions in place and I think it's highly unlikely that that kind of action would be seen in Scotland. Okay okay Alex did you want to continue? Well David's going on but can I just I want to pick this point we we we we John in terms of Scottish Enterprise and whether they can do much more detailed analysis and give this committee more information on the companies that are trading in America and the likely benefits and it's about the threats as well I think there's the there's opportunity but there's also threats what are they? Sir I absolutely agree and we do need to undertake with our partners in industry that robust economic analysis of the opportunities and the challenges and you know as a result of this so you know I think that's something that we should definitely be doing with our partners in terms of Scottish sectors exporting to the States and we've got some great examples financial services we've got Aberdeen asset management Martin Currie Bailey Gifford out in the States in terms of energy we've got a Greco with significant operations in North America and we've got the Weir Group with 80 operations in North America employing 4,600 out there and the Wood Group's US operations is the largest and with 34 percent of their global headcount food and drink we've got Edrington with five locations in the US we've got Albert Bartlett and Sons making deals around their rooster potatoes and we've got small companies like smarter grid solutions so across the sectors we've got Scottish companies you know doing well and active and of all sizes and you know trading out in the States. Just one final point in its energy and that really raises a point in a sense if you look at the the American economy right now shale gas is seems to be having a major influence on driving that economy driving down oil prices and certainly finishing the coal industry in this country. The regulation of shale gas in America I don't think is up to the types of standards that are being talked about if shale gas proceeds in this country. Is that an example where there is a threat that American companies want to get in on shale gas here and if we've got much tougher and tighter regulation is that an example of conflict? I doubt it on the basis that the well for example the company that John mentioned the weir group they're heavily involved in supplying into the shale gas boom in the US so Scots benefiting from the shale gas boom and the engineering manufacturing sector is benefiting from that currently and we are all benefits consumers reductions in the petrol prices of the of the shale gas boom but I don't see any reason why there'd be a change in regulations to allow a flood of US companies in to to take out whatever shale gas exists in Scotland I think that's higher there lately. David. Thank you it was just a general point just because it's been touched on a couple of times I mean part of the challenge here is of course we're still in negotiation and so we don't actually know what the end point of that is and that creates questions and uncertainty and that's understandable I think therefore it's certainly worth studying the EU candidate agreement because due to TTIP that got over the line that set the benchmark for what a next generation free trade agreement looks like that's probably the sort of area that TTIP will end up in perhaps going further but in terms of trying to understand what will be in that agreement if the negotiation comes to a conclusion the Canadian agreement is certainly worth taking the time to understand and certainly when it comes to regulation and standards that was about levelling up than more than anything else. Yeah we've had some briefing from our very helpful spice people on some of the other trade agreements but maybe just drawn our attention to the Canadian one it's very helpful thank you. I'm conscious of the time now and we're sort of a due to finish this session with you now because we've got our other business to get on with but is there any final comments or questions Rod? I just just wanted to follow through we were talking about ISDS I think Mr Martin MEP in his evidence session with us suggested that TTIP might be possible without ISDS provisions I just wondered what the panels view was with the thing that ISDS is such a fundamental part of this agreement or could it be removed and we could then have a just TTIP on its own. I think it's unlikely for the reasons outlined earlier that in order to avoid regular changes by governments which would negatively impact on businesses then they'd wish to have that kind of protection for their workers and their businesses. Okay any final points? Just one. Hanzala? There was an earlier point raised that you know why would they the US be interested in us and I think it's quite clear that they would be guaranteed a quality they would be guaranteed a workforce that has reasonable working hours and conditions to work in terms of health and safety so that they themselves or their retailers wouldn't be prosecuted in courts so we give them something very valuable and they do to us the whole point of the US wanting to trade with Europe is quite clearly they're looking to ensure that they safeguard their citizens and that's what we intend to provide but it works both ways and I think what we need to try and make sure particularly in Scotland is that we do provide something quite unique and special and I mean and it's not just risky I mean you can go from iron cheese to yogurts to you know we can provide stuff that nobody else in the world can provide and and that I mean if I am and can recognize that I'm sure in the international business communities will also recognize and I think therefore there is a call and I think there's a greater call for us to try and make sure that we press home that message and we do look at ways of enhancing our position in terms of how we trade there we like there because we're the cousins so you know let's let's deal with that on those bases that's not say it's too difficult and it's too complicated I think that those are just challenges and we should we should face up to them I think it just to finalize this this session and to add to that point the scots have always liked a good deal anyway but we're rather canny and that's why this committee is looking at every aspect of of this agreement because you'll understand that over the summer we were lobbied very heavily on the negativity of the process so it's been very very valuable to hear you know the possible opportunities in that and some of the pitfalls but certainly you know your experience and your input has been very very important in forming that process now this inquiry is going to continue on well into the new year and we are very very keen to hear from yourselves if you have additional information or from anyone you know in the in your sectors that that would maybe have you know something peculiar or something a bit different or you know something that could inform us is further or anyone wider that you think should inform our processes as well would be extremely helpful in that and I mean just a wee gentle prod to Scottish Enterprise I think you've got some homework to do and we'll look forward to hearing from you on that homework in the near future but thank you very much for your your involvement in our committee this morning and hopefully we'll look forward to hearing from you in the future thank you I'm going to suspend it to allow the committee to go into private now and kind of thank everyone for coming along