 Good morning, colleagues, and welcome to the 11th meeting in 2019 of the Finance and Constitution Committee. Our first item on the agenda this morning is to decide whether to take item 3, consideration of our annual report in private, and members are agreed. Our next item is to take evidence on trade negotiations from Ivan McKee, the Minister for Trade, Investment and Innovation, and Stephen Sadler, who is the head of the Trade Strategy in the Scottish Government. It's the first time that Ivan McKee, the Minister for Investment and Innovation, has been before the Finance and Constitution Committee ministers, so welcome. I wonder if you wish to make an opening statement. Yes, indeed, just a few words, convener. I'm pleased to be here this morning to discuss developments since the committee published its report on the trade bill legislative consent memorandum and the Scottish Government responded last November. The trade bill was originally described by the UK Government as legislation which would build a future UK trade policy after Brexit, although the bill that was introduced in November 2017 was more limited in scope and fell some way short of that ambition. Despite some changes that have been made to the bill since then, the committee will be aware of the concerns that we still have with the bill and the constraints that it puts on the powers of Scottish ministers in devolved areas. Mike Russell wrote to the committee on 11 March to confirm that in the absence of any movement by the UK Government to address the Scottish Government's concerns in relation to the trade bill, the Scottish Government cannot seek formal legislative consent for the bill. More generally, the bill does not provide for sufficient scrutiny of trade arrangements by either the Scottish or UK parliaments nor does it establish the role of devolved Administrations in the development of future UK trade arrangements. The paper published by the committee ahead of this morning's session sets out the various strands of activity that are under way in this area. I will not rehearse this but suffice to say that your committee's consideration of the role of devolved Administrations in the development of future trade arrangements is well timed. I spoke to the Culture, Tourism, Europe and External Affairs Committee last week and I said that one thing was clear. If the UK is to create an independent trade policy, there is a huge amount to do. It is essential that the devolved Administrations and legislators should play a full part in this work and the voice of Scotland's commercial and trade interests must be heard. The Scottish Government is serious about enhancing and securing Scotland's role in future trade arrangements, not just for its own sake but because we know the importance of trade to the success of our economy. It was published in a discussion paper last year, which makes the case for a guaranteed role for the Scottish Government and Parliament in all stages of the formulation, negotiation, agreement and implementation of future trade arrangements. We continue to press this case in discussions with the UK Government and colleagues from Wales and Northern Ireland to ensure that economic and social needs of all parts of the UK are protected and promoted. For its part, the UK Government has made some suggestions about how this can be achieved and you will not be surprised to hear that we do not think that those go far enough yet but we are still talking. At the same time, we are working across Government and beyond to identify what matters to the Scottish economy and, in particular, the key differences between Scotland and the UK that must be taken into account in developing and negotiating trade deals that work to the benefit of the whole UK. The scope of modern trade deals is increasing and they now typically deal with and emerge a range of reserved and devolved policy areas. That is why it is so important that devolved administrations and legislatures should play a full part in developing them. Convener, I know that you have written to all parliamentary committees to seek views on this and that exercise will be invaluable. We have made it clear that there must be a role for this Parliament as well as the Scottish Government and I look forward to discussing what that might mean in practice. Thank you minister. I am interested in the area of state aid. That is a policy area that is described in our committee paper May Impact on Future Trade Deals. Therefore, would the minister agree that the state aid rules could have a significant impact on the ability of any Scottish Government to deliver across many areas of devolved competence, including regional investment, agriculture and fisheries? I wonder in that context what discussions the Scottish Government has had with the UK Government on this matter how would you describe those discussions and where are the areas of agreement and disagreement? I think that there are probably two parts to that. The first is round about the definition of whether a state aid is reserved or devolved. There is a disagreement on that, which comes down to how you read the way that the exemptions in the Scotland act are written and what they cover and what they do not cover. Our interpretation of that is that the state aid is not reserved and, consequently, it is devolved. That discussion between ourselves and the UK Government is on-going. On the practical aspects of your right that state aid and how it is applied can make a difference in terms of the impact on, as you say, certain sectors or certain policies within Scotland. However, it is also true to say that the UK Government has given a view that state aid regime would not change, at least in the short term. Clearly, that is something that we are comfortable with in terms of the practicality of it, but the debate about whether it is reserved or devolved is on-going. Of course, when you look at trade deals, whoever you are doing a trade deal with, be that the EU or further afield, clearly level playing field requirements will play some part in that, because for somebody to do a trade deal with you and for you to have scope to support your businesses to the exclusion of theirs is something that we would figure largely in those. I think that the reality of state aid is, in most cases, one of those things that, although if we were outside the EU, would not technically apply as it does at the moment. The reality is that, in trade deals, it would most likely be the same or very similar set of rules. I heard a bit about where there is currently a discussion going on about no agreement yet being reached. Can you tell us a bit more about where the areas of agreement are in terms of the principle of state aids? Should the UK leave Brexit and how those discussions are going? As I said, in terms of the principle of it, the disagreement is round about whether it is devolved or reserved in that manifest itself in terms of how the consent would be asked for or given in anything regarding any changes or proposed changes or anything that impact on state aid, but in terms of the practicality of it, given that the UK Government's position is understanding that the effect that they are going to carry on with the regime as it is at the moment under EU rules, then, in practical terms, there is no point of disagreement because they are not changing anything and everything will carry on as it is. As I say, in reality, when you go beyond that to negotiate deals, then, because the requirement from the other side would be that you would want to keep a level of playing field in place, then it is dependent on how things unfold, but at the moment there is nothing on the horizon that we suggest that that would significantly change. I do not know if there is anything that you want to add to that. No, just to say that it is more around what could happen in the future and potential changes for that and the importance of giving the Scottish Government and the Scottish Parliament a role in those changes. The issue of competency aside, there are areas of agreement about where the two Governments have captured that right. The agreement is that nothing is going to change, effectively. Having said that, if the UK Government then goes to a place where it does want to change things, then that is where that kicks in and it becomes an issue around about whether it is devolved or reserved. At that point, it could be an issue depending on what trade deals it wants to do with who and what the requirement of those other countries would be around about state aid and what the UK Government may or may not want to do. At that point, it could become an issue. That is why it is important that the foundation is there that clarifies whether it is reserved or devolved. That is the area that I wanted to go into next, because there is potential in all those situations for consensus to break down. If that consensus breaks down, how will issues such as disagreements over competence or other such matters be resolved? What is the mechanism? I get out and we are going to talk about the wider context later on where it is clear what is reserved and devolved and the debate is what is the process for discussion around devolved areas. State aid is particularly different because there is not yet agreement as to whether it is reserved or devolved. We are one step back from that, which is something specific about state aid itself. If we go to a point post Brexit where the UK Government wants to do trade deals and wants to change state aid rules that are applied in the UK to some extent, then at that point, the discussion about whether it is reserved or devolved would come to the fore, how that would be resolved, which is not clear, and what the UK Government may want to do in terms of changing state aid provisions. It is not clear either at the moment because that is not on the table. I think that there is a general discussion around the involvement of devolved administrations and registers in the process of putting trade deals together, but there is a specific issue around state aid, because we cannot even agree whether it is reserved or devolved. I am not expecting you to say anything, minister. It strikes me in a number of areas in which I am watching across the Parliament as well as what we are dealing with. There is potential for dispute in a significant number of areas. It has all been dealt with on an ad hoc basis. I wonder whether, at some stage, there will have to be an overview of what is going on across Governments from both perspectives, where all the disputes exist and how we are going to get to a sensible resolution to all of this in terms of a process that we can find agreement. I think that it just talks to the situation around where we do not know if there is going to be Brexit or not, we do not know if there is going to be a customs union or not, we do not know if there is going to be a rollover, we do not know if there is going to be trade deals, so there is hypothetical up on hypothetical up on hypothetical before we even get to the point where we start to talk about the mechanisms for resolving these, so it is extremely unclear and probably becoming less clear by the day. Thanks very much. I am still just a little bit unclear about the Scottish Government's policy preference on state aid. Those who would argue that state aid is a restriction on the ability of public policy to meet public objectives and that the absence of state aid restrictions would be one of the very few upsides of being taken out of the European Union. Are you saying that the Scottish Government's position is to reluctantly accept that the state aid regime will be what the UK Government has in mind, or are you saying that the Scottish Government's policy preference is the same as the UK Government's preference in terms of what state aid regime should apply? It is a reality of trade negotiations, so we can negotiate, in the broadest sense of us, doing the negotiation. We can negotiate with another country a provision whereby we can do what we like to support our businesses, but they cannot unfairly support their businesses. We of course would sign up for that as anybody would, but that is not the reality. The reality is that it comes down to the trade negotiations, which is going to be that whoever you are negotiating with will, in all likelihood, expect level playing field provisions to be in place. In such negotiations, the Scottish Government's preference is for a more restrictive state aid regime, a less restrictive one or something broadly as it stands at the moment? It is asymmetrical. Clearly, we would want something that was less restrictive for us and more restrictive for them. Of course, we would, and that would be part of any negotiation. If it is going to be symmetrical, the starting point is where we are at the moment, because that is what the EU has got in place. That is what many of the third-party trade deals will be in place. Shifting the dialogue on that would require negotiation with the EU in the broader context in terms of when the trade deal with the EU. Clearly, the starting point is where we are at the moment, but where do you want to get to? As I said, to be fair, that would come down to the negotiation, because it is giving take. In all those things, it is like saying to you that you are going to have a negotiation. In the negotiation, there will be offensive and defensive positions that you will take on specific aspects that you may then want to negotiate aware of. It will vary across different sectors, depending on whether we are in a position to export something to somewhere else. Therefore, we want something that is less restrictive or defensive in terms of whether we have sectors that we want to protect and, therefore, we want to protect the other. I think that it comes down to the detail of the specific. Is that it? It is very general and simplistic for us that we would want to remain as closely aligned with the European state-aid regime as it currently is. Adam? Yes. As you said, the conversation has been hypothetical, piled upon hypotheticals. I wonder if I could bring us back from the future into the present. I like that reaction. Let's see if we can sustain it. I understand that the Scottish Government is continuing objections to the trade bill, as set out in your opening remarks. Given that the bill has been very substantially amended in the House of Lords since this committee reported on it and, indeed, since the Scottish Government published its legislative consent memorandum in relation to the bill, and given that those amendments have very significantly enhanced both parliamentary scrutiny of trade policy and of future trade deals and have formalised a role for the devolved administrations on the face of the bill, why are SNP ministers continuing to resist this legislation? Well, the position is that we are only at half time in this particular event, if you like. The UK Government has proposed the bill. The bill went to the Lords, the Lords passed some amendments, which the UK Government objected to, and the bill is now going back to the comments where, in all likelihood, we expect the UK Government to take those amendments that were made in the Lords out of the bill to put us back to square one. At the moment, there isn't clarity on where we are. As I say, depending on where the bill ends up, it is in all likelihood that the comments will take those amendments that the Lords have passed back out of the bill, and we are back where we started in terms of our objections to it. So, our objections have been effectively added to the UK Government's position. If the UK Government accepts those amendments, we are in a different place, and we will see how that plays out, but that is not where we are or we are expected to be. Is not it the case that the UK Government has accepted the thrust of those amendments? Its command paper published in February of this year on the process for future trade agreements, for example, on page 8. There are no paragraph numbers in this document, but on page 8, the UK Government says, and I quote, that international treaties are a reserved matter, which is true, of course, but that devolved Governments have a strong and legitimate interest where they intersect with areas of devolved competence. Is that not a recognition that you would want to welcome, but notwithstanding the fact that international trade and international treaties are formally reserved under the Scotland Act, that their impact is likely to be significant on devolved competence and that therefore there needs to be a formal role, as provided for in the bill, both in clause 7 and in schedule 1, for devolved Administrations? Given that UK ministers have listened to objections to the bill and have accepted in the House of Lords amendments to the bill, why are the SNP ministers not welcoming that and trying to work with that, rather than just continuing to resist it? Adam, just for the sake of clarity, just so that other members understand the document, can you just reference the document? I did. It is page 8 of the UK Government's command paper on processes for making free trade agreements after the UK has left the European Union published in February 2019, which it seems to me is a document that contradicts what the minister has just said about the UK Government's intentions. I think that there are two parts to that. There is where we are going to end up with the bill and, as I said, we feel that we expect men and men sort of putting in the lords to be taken out again, but we will see where that goes and then we can reflect back on where it ends up. The statements of a tent by the UK Government, in other words, recognise that there is an issue, but in our view they do not go far enough in terms of providing a process for resolution of those. Can you be specific about that, please? Why don't they go far enough and what more do they need to say, in addition to what was already said in close 7.5 and schedule 1.1? We are looking for what is in the discussion paper here, which is at the devolved administrations and legislation. This is Scotland's role in the development of future UK trade arrangements, which are published in August 2018, which lays out that the devolved administrations, along with the legislators, should have engagement in that process right from the start, which is beginning with which countries we should be talking to about trade negotiations, how we prioritise those, what we are negotiating mandate as offensive and defensive positions through the negotiation process and through the ratification process, so a process that involves the devolved administrations and all aspects of those trade deals is what we have set out in the paper. I have read the paper and we have talked about it in the past, both in the committee and in the chamber. What I am asking you to do for the benefit of the committee today is to specify exactly where in the UK Government's command paper of February 19 and in the bill as amended in the House of Lords, as it is at the moment—I am not interested in future speculative issues about what may or may not happen to this bill in the future, but we are looking at the bill as it is today, as the bill is at the moment—where does the command paper and where does the bill not go far enough in satisfying your demands that, as you just put it, devolved administrations are formally involved in setting trade policy, in negotiating trade deals and scrutinising trade deals and in passing trade deals? That is all provided for on the face of the bill as it exists today and on page 8 of the UK Government's command paper. If it does not go far enough, I need to know how specifically it does not go far enough and what specifically it wants in addition to what is already there. I will let Stephen take the detail on that. That is a political question. It is a Scottish Government's position and I have said to you that there are nice words there about a recognition that there should be some involvement, but the bill is in the detail of the mechanics of how that would operate and the experience that sales and officials have had engagement with the UK Government, where we are very often in a position where they will say, yes, we need to involve you more, yes, we need to talk about things, yes, we need to have a concordat, yes, we need to move forward and engage you in those processes. The reality is that you get told at the last minute or not at all that something is happening and that it is largely a box-ticking exercise. That is the reality of the engagement of experience and that is why it is important that what is in there has to recognise that there is a more formal role. I think that the devil is in the detail and the mechanics of that. That is clearly our position and the mechanics of that in terms of what you would change to make that happen. I think that it is important to nail down. One of the things that we would say is that the amendments that were made in the House of Lords were designed specifically to pick up what some members of the House of Lords saw as deficiencies in the UK Government's proposals, particularly during the scoping and negotiation phases. I think that the bill, as amended still, gives a role to the devolved administrations, but not perhaps one as far as we would like to go to. The other point, to go back to your first question, is why do we still have an opposition to the bill? I think that we have an opposition to the bill because there are certain clauses in the bill that are still the same, where they seek to constrain the use of Scottish ministers' powers in devolved areas. That is a Brexit-wide difficulty, if you like, and not specifically on the trade bill. That is a position that we have discussed with colleagues of ours in this committee and in the chamber. It is a general Government view of those restrictions on Scottish ministers' powers to legislate in devolved areas. I think that it is also worth referencing the TRA, the trade remedies authority, where the UK Government has resisted having any role for the devolved administrations in that process, which is something that we think should be necessary in order to protect Scottish interests as we go through that process. I remain distinctly un-enlightened about what it is that you are objecting to in clause 7.5 of this bill in schedule 1.1 of this bill or in page 8 of the Department of International Trade's paper published in February. In all three of those instances, two on the face of the bill itself and one in a Government command paper, the UK Government is providing exactly what it is that SNP ministers demanded. That is to say, a formal role for the devolved administrations in the making and setting of trade policy and in the scrutiny of trade deals. You are telling me that it does not go far enough but you are failing to tell me how it does not go far enough or why it does not go far enough or what specific amendments you need to see to clause 7.5 or to schedule 1.1 to obtain your recommendation that this Parliament gives its consent? I think that there are two issues. There is a constituent of powers that has been referenced, which is a wider issue around Brexit policy and the trade remedies authority issue, which I have referenced as well. Angela, you are a supplementary. Notwithstanding that the bill is still to go back to the comments and none of us knows what the outcome of the bill going back to the comments will be, I have been looking at the role of the UK Parliament because it is the UK Parliament that has some role in approving trade agreements. There is an obligation on the Secretary of State on two occasions to consult with devolved administrations on the content of the draft negotiation mandate before the text of the proposed agreement is approved. The UK committee has to take into account the views and circumstances of devolved administration. Given that, at the end of the day, we do not need our consent, we have no veto. It has been touched upon earlier that ministerial powers and rule has been constrained by both the readover between the trade bill and the EU withdrawal bill. I would be interested to know what assurances the minister has had that consultation will be meaningful, because there is consultation, and then there is consultation. As I said, we can only go on the experience of what we have seen. That has been a difficult process that is involved us very often, not being informed that things have not been consulted and only told about what is happening late in the process, rather than being brought in earlier on its own as if it is an afterthought and a bit of a box-ticking exercise, rather than taking on board the specifics of what the Scottish Government's requirements and the Scottish economy's requirements are at an early stage in the process. I think that it is fair to say that we have not had any response back on that. For example, the response that we put in about the four free-trade deals that the UK Government has identified has been there. Their first priority is a fairly substantial piece of work on that. We have not had any response back on that. Another example that we might want to talk to in terms of their all-over deals is that there are different priorities for Scottish business around some sectors, such as access to North African markets and seed potatoes, which we feel should be priorities but have not been prioritised by the UK Government in the role of our deals. There are examples of that, and that is because I took quite a bit of detail about the differences between Scottish interests in terms of offensive and defensive sectors for those four trade deals that the UK is negotiating at the moment, which is the US, Australia, New Zealand and the Trans-Pacific Partnership, and the differences in approach that would be required there. In all of those, and in a range of contacts at ministerial and official level, the engagement has, while they have said that they want to do more, has been lacking in substance and often quite far down the process before we talk to them. Given that it was one of Westminster's own committees, the Public Audit and Constitution Affairs Committee, that raised some concerns that 20 years into devolution there was still that lack of understanding or indeed appreciation of the devolved settlement, and also given that past behaviour is the best predictor of future behaviour, have you seen anything that gives you any confidence that, in terms of any consultation process, there will be a willingness to compromise and to negotiate over the detail? Have you had any examples of where your counterparts have came and went with you? Other than the trade remedy authority that you have already mentioned, what else could be put in place in terms of process that would actually help? The indications, as I say, you often will get a recognition. I think that it's fair to say, Barnas Fairhead made comments on that as well, that they could do better. Certainly, George Hollinbury has, when we've talked about this, said that we need to do better and we recognise that it's not when it's good, and then you might get official contact that steps up its game for a short period of time and then reverts back to where it was. I think that there's something in the system there because there's not capacity, which is something that we might talk about, or because there's such a focus on the uncertainty of what's going on and trying to just deal with the things that are hitting them in the wider environment around where we go with all of this. The instinct is always for them to deal with what they've got on a day-to-day basis in terms of almost crisis management without reflecting back and bringing us into that process until often it's too late. Among some individuals, there will be an understanding that that's a requirement, but in terms of the reality of how that's embedded in how it works on a day-to-day on-going mechanism, it's hard to see that there's anything substantially changed there. So it's about culture as well as process? Yeah, absolutely. The other example is the Concordat, where this is supposed to lay all these requirements out in something that we can all work together on, and the process there has been faltering, has now been stalled for a period of time, and is not making any progress. So that's supposed to be the document that outlines how we do this work together, and even the process of pulling that document together has kind of stalled, which gives an indication of where we're at. Lord Llywodraeth. Yeah, thank you, Comedian. Just in the same area, in relation to the new call 7 that's been inserted in the bill, it has put significant obligations on the Secretary of State to consult with devolved Administrations before a draft negotiating mandate is laid, and then before the text of any proposed agreement is laid as well, minister. I hear what you had to say about the fact that this is only in the House of Lords, and it may be amending the House of Commons, which is a fair point to make, but the advice that the committee got earlier from our adviser was that the UK Government seems to have accepted the position that is set out in call 7 as it stands. What I really want to understand is that, if the bill ends up with call 7 as it currently is, is that the position that the Scottish Government will accept? Or are you looking for more, and if you're looking for more, are you in fact seeking a right to veto over trade agreements for the devolved Administrations? No, I think that it's fair to say that we understand that it's not a veto, and if you look at what we're again referring back to our Scotland's role in the devil in the future, UK trade arrangements paper, we identify international examples that work well where devolved or subnational jurisdictions are brought into that process at very early stage and work right through that process, including being present in the room, where the negotiations are taking place and so on and so forth. So there are specific international examples here that you can refer to, where it's not a veto, but there's a very strong engagement right through the process. I think that in terms of what you're talking about, we'll see how that amendment goes at indication or how understanding it is different in that the UK Government will look to withdraw those amendments. However, as the other points were referred earlier around about the constraint of powers in terms of devolved Scottish ministers and devolved areas, and the trade remedies authority are concerns that we have on an on-going basis, notwithstanding anything else that may or may not be changed in the bill. Okay, that's very helpful. I thank you for clarifying that you're not seeking a veto, but if that's the case, and given that there are quite serious obligations, we don't know the Secretary of State in clause 7 as it currently stands, would the Scottish Government be seeking further amendments to clause 7, and if so, what would they mean? In our position, we'll wait and see how that goes when it comes through the comments and where it ends up. However, as I said, there are other concerns with the trade bill in the wider context of the EU withdrawal bill, which is problematic because the constraint is a part, and that also applies to the trade bill and the TRA, which is obviously a concern as well that we've raised repeatedly. So you can't tell me today whether you're happy with clause 7 as it stands? Well, there are other concerns on the trade bill in general. No, I'm not on clause 7 now. You're happy with clause 7 as it stands? I don't have clause 7 behind, but our requirement is that we're involved, as I've said, right from the start in terms of deciding who we're going to be negotiating trade deals with right through the process of the negotiating mandate, through the process of the negotiations, through the ratification and subsequently to that. Can I just add something? The point that you made about how effective consultation is is a very important one. I think that it's something from a practical evidence of the last year, 18 months, we would have concerns about, unless there was more specification about how and when that consultation would take place, we would be concerned that just something that said we would consult devolved administrations went sufficiently far enough. I think that we've mentioned the UK Government's document published—sorry, I haven't got it in front of me, but Professor Tomkins mentioned it in February—we're talking there about establishing a ministerial forum, a senior officials group policy roundtables. The ministerial forum hasn't been established yet, so we can talk about how effective we think on a working level the roundtables are. As Minister mentioned, we've had discussions around the Concordat for several months around the turn of the year, based on our document and UK Government proposals. They have stalled now, and we've not heard anything from them since February, so in that kind of context there's a degree of concern around how this would work out in practice. I'm a bit frustrated, because this is a wee bit cloudy here. I just want to make sure that I understand what the Scottish Government is saying. Yes, there are more promises on consultation, there are more promises on engagement, there are new forums, there are senior policy groups, they are all being suggested in the command paper and we've got clause 7. At the end of the day, the fundamental issue for the Scottish Government might all be progress, it might be slow progress, it's all progress, but at the end of the day there is no movement from the UK Government on mechanisms to seek agreement and consent to be found. If that is where you are, can you make sure that we get that on the record? That's a very fair summation, convener. As I say, there are words there in terms of intent, but the reality is that what we haven't seen is that carry-through-it-in-the-day interaction a willingness to engage and consult through the process as it stands just now. It's not clear yet where that amendment is going to end up when it goes through the further stages of the process and, as I've said, the issue is round about the constraint of powers on the Scottish ministers and all the areas and the issue round about the TRA, the trade remedies authority mean that we are not in a position where we would give consent to the trade bill. OK. Patrick, we're going to come in a bit later, but given that we're now in the area of consent, I'm going to bring Patrick in at this stage. Thank you. I just want to follow up very briefly on the points that you were raising there, because yes, the language around consultation from the UK Government is vague and ill-defined, but I'm quite disturbed at how vague and ill-defined the Scottish Government's position is on some of that. What we should be seeking to achieve, surely, is democratic accountability for decisions that will impact on all of our lives, from the work that we do to the food that we eat, to the air that we breathe, and pretty much every aspect of how we live, including huge swathes of devolved responsibility that can be impacted by those decisions. Given that those areas can devolve responsibility, that democratic accountability needs to be here, as well as at Westminster. Why, then, is anything less than the same parliamentary lock in the devolved settings, as Clos7 proposes for Westminster? Why is anything less than that tolerable? You're absolutely right in terms of the devolved administrations, the Scottish Government and the Scottish Parliament, as they say, because those are by definition default, and that's absolutely clear. When you go through the trade negotiations, clearly there's a lot of other aspects to that, and as we recognise, the all-parts of the UK will have an input to that, and that discussion will take place. We'll talk about frameworks and how those are going to work out in that whole context, so, of course, there will be areas where discussion needs to take place around where, as you say, you'd put common frameworks in, etc. Yes, you're still talking about input and discussions. Are you talking about votes taking place here, at Holyrood, and in the Welsh Assembly, where trade negotiating mandates or final texts impact on devolved competencies? Are you seeking a change to Clos7 to ensure that parliamentary approval is required for those steps here, as it is required at Westminster? Yes, and where is the devolved area? Of course, the Scottish Government and the Scottish Parliament have an authority to pass legislation. I'm going to come on to the question of your position on withholding consent. There'll be some people who think that the UK Government's position is fine, and they'll note the commitment to not normally acting on devolved competence without consent. I think that that commitment has been shown to be utterly meaningless, and we shouldn't take it seriously at all. I think that the idea of consultation is pretty meaningless as well. Assuming that that's not the Government's position to give consent, surely we need to be doing something much more proactive now than merely indicating that we might not give consent. Surely we should be indicating to the UK Government and to any of its potential negotiating partners around the world that the Scottish Government will use every possible legal challenge against a trade agreement that impacts on devolved matters without consent, and that we would do everything possible to frustrate and undermine anything that does that, because it would be a fundamental blow against the authority of the devolved Parliament and Government. When you say everything possible, what are you envisaging? We should be indicating, or the Scottish Government should be indicating, that it would do everything within its power, legally, to challenge and undermine and frustrate the operation of a trade agreement that impacts on devolved areas that have not been agreed by this Parliament. I'm not sure that we've got the legal authority to, depending on what you're talking about, to do whatever it is that you're describing, but clearly the position is that if the UK Government is negotiating trade deals, there are Scottish interests there, and be those around about maintenance of standards or whatever in devolved areas, or commercial interests, be they offensive or defensive, where the Scottish Government would input into those, of course we would. I'm not sure what you mean by all means or what the formal word that she used was. Minister, we know what this process is about from the UK Government's perspective. There are people in the UK Government, potentially the next leaders of the UK Government, who want to strip away the social and environmental protections that have been built up within the EU. They've made that clear on numerous occasions. What I'm asking for is for the Scottish Government's posture to that to be explicitly hostile. I think that you're adding a whole lot of very different things there. There's issues around about offensive and defensive sexual interests on trade deals, which is important. Let me finish. There's issues around things that may impact on devolved areas where we may or may not have a position that we can agree with the UK Government, depending on what it is, and then there are other things that you're talking about that are, as you said, stripping away rights and protections, etc. Clearly, if that's what's on the table, that's something that we would wholeheartedly object to and make that position very clear. However, there's a whole range of stuff there. You're jumping into the issues where there would be direct challenge to establish rights or protections or standards. Clearly, in those areas, the Scottish Government and devolved areas would have a very strong view on that and would resist that. Of course, there are other areas where you would look at it and say that there are things there that are areas that you could look at and say that we could perhaps agree to that. It depends on what it is. There's a whole range of different things in there, and there are other commercial aspects that are hugely important around sexual interests, which you would take a different Scottish position on based on the differences in our economy, and we seek to input on those. In some areas, yes, of course, we'll seek to input and understand that influence the UK Government's trade negotiating position is important, and there are other areas that some of the lines are alluding to where clearly we would have a very hostile take on to any measures that the UK Government was trying to impose around about stripping away standards, protections, rights, etc. Of course, we would. You also want to come back in the principles and trade as well. Do you want to come back in that later? Do you mind if I allow other folk to come in? I want to go back into some of the specifics of the legislative process. I was just interested in the wider issue about scrutiny. Consultation isn't scrutiny. I think that you're right to be cautious about just exactly what's meant by the consultative side of this in the clause 7 and all that, but this committee at previous stages, even when you were a member, were interested and concerned about our ability, the Parliament's ability, committee's ability and members' ability, to hold ministers, UK ministers to account and to scrutinise any of the deals and proposals that come forward. Is it your view that we're anywhere even near that at the moment in having that ability to have that close scrutiny that I think we all shared and said that we wanted at this committee? No, I think that we're a long way from that. If you look at the examples, I've mentioned the four trade deals that are on the table just now and the Scottish Government's response to that, which we published last November that we haven't had any discussion with the UK Government or any response on that, on those four trade deals that we've had meeting since then, but that has not been discussed in detail and we've not had a response to that. That's one aspect. If you say if you talk about the mechanics of it, where we are with the Concordat, if you talk about the rollover deals as well, where there's been a number of those that have been flagged up in Norway, for example, where it's been flagged up as a rollover has been done, but with changes because there are parts of it that haven't been rolled over and the Scottish Government hasn't been engaged or involved in that process at all in terms of how the changes to those rollover deals look like. Another example was that there was no involvement with us around about when the UK Government published their no deal tariffs for day one after no deal and we heard about those the same as everybody else when they were published. So there's a number of areas where, while there's talk about you need to be more involved, the reality of it is that that hasn't happened. The UK Minister wrote to the committee, George Hollingbury wrote to us, and he described this intention to set up this new intergovernmental ministerial forum to provide the formal mechanism for the devolved ministers to discuss and provide input, but it doesn't really mention scrutiny. It says that it's a matter for our Parliament to determine how we might scrutinise our government in this, but I think that the impression that we had as members of this committee that we would be able to reach out and invite and bring to our committee UK ministers to scrutinise their proposals. That's what I understand by scrutiny, and I hope that you share that. No, that's absolutely true, and I think that's what you would expect and hope would happen. As I say, we've got a long way to go to see evidence of that, and I'd refer back to the Concordat, which is stalled. It would lay out some of the processes that are around that, but we can't even get the process to find as to what the process is. That ministerial forum that the UK minister referred to, Mr Saddler, did you say that it hasn't been established yet? Is there any indication of when it might be? No, my officials have any further information. That's part of the discussions that we've had at official level to begin with on developing Concordat on international trade. As I said before, at the last we heard from the UK Government on that was in February, and I think that the aim had been to develop a degree of understanding and agreement at official level before putting it to respective ministers, including Welsh ministers as well. We haven't heard back from the UK Government since February, so the rest of it, what follows, the ministerial forum and other things, have not been able to be set up. Okay, thank you for that. Alex Rowley. Thank you for being there. I know that there is a lot going on behind the scenes, and I want to be able to scrutinise it here at the committee. I wonder if the minister will give a detailed account of the work that is being done by the senior officials group? That's an official group, so is there anything happening on that? There is interaction, but it's patchy. When I go to meetings, it's that the officials have been talking, and then the officials have stopped talking because the UK Government is too busy with something else, so it's kind of on and off. The sharing of information hasn't been to the level that we would hope and expect. While there has been discussion, Kenny goes through cycles of getting a wee bit better, and then dropping off again and tailing off, and then nothing happens for a period of time, so it's patchy, it's not regular, and the amount of information that comes through that process is not to the standard that we would expect, but Stephen might want to— I think that sums it up perfectly. Above all of this, or restricting all of this, is the fact that there's been no progress on developing a concordat. When UK, Scottish, Welsh and Northern Ireland officials get together, there's a constraint on them about how far they can go to talk about things, because there's not been a concordat on what the UK Government is able to or willing to share with the devolved administrations. Are you on that group? My bosses. I'm on them as well. Have they been meeting regularly? Have you met them around every six weeks? Have they still been going on? Yes. They are actually taking place. The next meeting? Sometime in June. I don't think that it's been set yet. James, common frameworks. Minister, you'll be aware that the committee has been looking at the issue around common frameworks. In terms of future trade deals and agreements, what do you think are the main issues that need to be set up in the common frameworks to help to facilitate those? Obviously, we're very early stage in that process, as in much of that. There's going to have to be, across a whole range of the devolved areas, a look at what needs to happen. I think that there's a list of 24 areas where there's potential requirement for common frameworks. I suppose that it's the process of what the frameworks cover is a discussion that needs to happen first before we actually get into the details of each one of the 24, how they're going to be run and what the mechanism is going to be, or what the details are going to be in each of those areas for discussion or agreement or disagreement around that. As I said, I think that we're still, because everything else is going on, at a fairly early stage in terms of understanding what those are going to look like. One issue that's come up in the committee evidence sessions is procurement. Just in terms of procurement, it's a big area around trade deals and agreements, a big area that the Scottish Government would have an interest in, where the trade deals affected Scotland. What do you think are the main issues there? Yeah, you're right. It's a devolved area, so there's a need for the Scottish Government and the devolved Administrations to have their views and the Parliament to have their views heard on that. Depending on what happens, if you end up dropping into WTO rules in a no-deal scenario, there's still GPA rules around that as to what you can do and what you can't do around about procurement. It's constrained at many levels, regardless of what kind of trade deal you go into, but notwithstanding that, it's important that, because it's the devolved area, the Scottish Government has got input into that. As I said, the mechanics of what that framework looks like is still to be resolved. What do you think the Scottish Government needs to see in the other common frameworks of those agreements to ensure that, again, given the example of procurement, that the agreements are consistent with the Scottish Government and Scottish Parliament policy? There's two different things. There's the issue around how you structure the framework and the mechanics of that and how that works, which will still take place. There's the detail once you've got the framework, having the discussion around what the issues are and how you resolve those issues. There's two different things. I think that we're a ways away from getting into the detail on any specifics, but you could identify areas where there's potential. There will be areas of disagreement about procurement, but we've got to go through the process of deciding on how the frameworks get set up and then going through, for each of those, what the areas of disagreement are and how they're going to get resolved or not. On that specific one, the procurement one, and I understand it correctly, the common framework around procurement is not—I don't think it's one that's going to be considered to be a legislative process, so if I've got that right in those circumstances, there will be a requirement to be agreement between both the UK and Scottish Government on that common framework before it can progress. Is that correct, but maybe I'm wrong? In parallel to the main international trade concordact, there is also a procurement concordact being developed. That envisages a degree of consultation, involvement and engagement but, again, progress on that has stopped for a couple of months as well. Tom, do you have a supplementary on that area? Yes, it's really just picking up. It picks up on James's point but also some of the points raised by Murdo and Adam earlier. One of the amendments that was ultimately withdrawn with regard to the trade bill was that in the name of Lord Stevenson of Balmucara, and it sought to introduce a requirement for the consent of Scottish ministers for use of powers under section 1.1 and section 2.1 of the trade bill would be the fair to implementation of the agreement on government procurement and implementation of international trade agreements. When we—it was vicar in younger and on behalf of the UK Government—was responding, he committed that the UK Government would seek to respect the sole convention, which applies to primary legislation. However, it was stated that that should not be extended to secondary legislation. As I understand it—perhaps you can clarify if I misunderstood this—the UK Government has left the door open to implementing common frameworks via secondary legislation, which would their air will not be subject to the sole convention. It is said that that sole convention does not apply to subordinate legislation. Subordinate legislation could be used potentially to implement some common frameworks. Is this a get-out-of-sole-free card that the UK Government can play in the implementation of common frameworks, or have I misunderstood the UK Government's position? That is a potential and that is a concern, and there are discussions on going at the moment to deal with that and close that loophole. If I understand this correctly, in the UK Government's paper on common frameworks, it made the explicit—perhaps the word explicit is a bit strong—but it suggested that, as Tom has outlined, that common frameworks would be potentially brought through secondary legislation. In these circumstances, the consent of the Parliament here or the Government here would not be required. Is that something that the Scottish Government is taking seriously? What are you doing about it? That is something that we have raised. It is potentially problematic. There is a potential for that to be used, as you say, to bypass sole on specific aspects, and that is something that we are aware of and are concerned about. Is that something that the minister might rustle as prosecuting, or is that something in your bag? That would make Russell be taking that forward. I am interested in some of this devil in the details stuff about sectoral interests, and specifically food and drink beef sheep as well. On my notes here, it says that the food and drink industry is a major contributor to Scotland's economy. It is worth about £14 billion each year and accounts for one in five manufacturing jobs. I know that we have about 660,000 workers in agriculture in Scotland, so my concern is that there might be some risk or constraints with trade deals, particularly with the US. We have already seen that the National Cattleman's Beef Association have already stated that US beef sales to the EU have been flat over the past few years, and we cannot continue to justify the continued application of non-science-based standards on US beef, especially in the UK once they leave the EU. I have been looking at issues around the US Department of Agriculture. They logged 97 meat recalls for serious health hazards in 2018, ranging from £12 million of raw beef that made 250 people ill from salmonella, and there was a withdrawal of 174,000 chicken wraps for possible listeria. That concerns me, minister. Additionally, there are issues around antibiotic resistant salmonella on beef products in the US. As a nurse, I have real concerns about antibiotic resistance as part of my health committee role. I wonder what you see as specific trade concerns if we start doing negotiations with America, Trump, bargain basement, cheap Trump trade deals. Is that what we are looking at in the future? I would hope not. You are absolutely right to raise those concerns, and there are concerns. When you talk about the agriculture sector, I suppose that you are talking about the importance of the economy, which you started off by talking about, which is, as I say, when you come down to negotiate the deals, what the offensive and defensive positions you are able to take are, and what the tariff regime is going to be and so on and so forth, and clearly what is the start of a process there, depending on how those trade deals work out in terms of food standards, which is the second part that you raised, and something that Mr Harvie mentioned earlier. Clearly, we are very concerned about that. We see a potential risk of entering those trade deals with the US in particular, and it is something that we have raised and highlighted in our information that we have put back to the UK Government around the four trade deals. We have talked about what we have started to look at, as I say, of which the US is one. Maintaining those standards to our mind is hugely important, and it is something that we would argue very strongly for. Part of that is the protected geographical indication status of our beef and our lamb and our whisky. It is £5 billion to the UK economy last year alone. I have been battering on about PGI for a while now, and I think that we really need to look at how we protect our brands, our beef and our lamb, from inferior imitation products that might come in. I know that there have been rumination about Scotch whisky, changing the definition of what Scotch whisky is, so that maybe a three-year-old brand can be called Scotch, which is completely different to the way that it is made in this country. Those are all concerns, and clearly the different geographical indications are depending on whether Scotch whisky has its own separate set of protections in addition to that. On the food staff, the GIs are critically important to many producing sectors in Scotland. At the moment, we have a situation in which those are protected through the processes and through the EU. If we are going to open that up and have those trade negotiations, then, of course, that is something that there is a risk that would not be protected as well as they are just now. It talks to the concept that would go in the big wide world and negotiate all those trade deals ourselves, but what that does is put a lot of those sectors, the sexual interests in Scotland, the geographical indications and other aspects on the table for negotiation, which is something that you would not want to be given away. That risk is there, and we will open ourselves up to that by the fact that we are looking to negotiate trade deals. The UK is independently from a position, frankly, of some weakness. It is in those negotiating instances that you end up having those kind of problems. From the Scottish Government's point of view, we are very aware of that. We talk about it constantly. It is something that we put on the table with the UK Government to raise the profile of an opposition to any demunition of those standards and opening up or removal of failure to protect the GIs. It is a risk that when you end up in that environment, there is potential heading into that. Do you think that the UK ministers are listening to the concerns in Scotland? When George Hallenbury was here, he said that Scotch whisky was very important. That is good for Scotch whisky, but are they listening to the concerns from the National Farmers Union and the Scottish ministers? If you look at the broader context of the process, there are discussions that we can have just now, and people will say that this is important and that is important, etc. The reality is that when you get into those kind of trade deals, which has been on run for years, and go through many iterations and many trading of different aspects—offensive, defensive, and back and forward—which sectors are important, what tariffs do you want to put on, what standards do you want to put on, there is an awful lot that gets put into the mix, and at the end of the day, as you get towards the end of those negotiations, there is to get a deal done. If that is what you want to do, you have to give things up to get things you want. Is not it a question of saying that things are important? Everything is important, but that is not the point. The point is that the most important and which ones are your red lines around the negotiation. We clearly would have different red lines or an intent to have different red lines in those negotiations to what the UK Government might have. If you look at what the most important sectors are, clearly food and drink is Scotland's top export sector, number one or number two, and the UK Government does not figure as largely, so if they were looking at what sectors to protect in trade deals, they might end up in a position where food and drink is not as highly regarded and as important to them as it would be to us. That is why—I think that I talked very—we have had a lot of discussion around the scrutiny and consent in people listening to people and talking to people, but when it really gets down to the detail, that is where it impacts, is where Scotland has important sectors that are worth a lot to our economy that are not worth as much in a UK context and protection through GIs, in terms of tariff regimes and in terms of standards that could get thrown under the bus as part of a tense fraught negotiation when it reaches the final stages. The words expendable come to mind from previous negotiations. Okay, thank you. You are right. Patrick, you know what you go into principles issues. You exhausted that earlier. No, I think that it is still worth exploring. I am interested in what the Scottish Government's general approach to trade policy is. Either in the longer term, if the Scottish Government has more of a role or in relation to this process, because we are living at a time when there is a rise of economic nationalism, trade war being waged by a chaotic US administration led by someone who does not appear to understand how tariffs work, we have the Brexit process, which is a project being run by hard-right ideologs, free market obsessives, and I am a little unclear what the Scottish Government's position is other than seeking to get some narrow sectoral advantage whenever it has the chance. Does the Scottish Government believe that free markets are inherently a good thing? Well, you need to define your terms there, but we believe that trade is important. We believe that the Scottish economy needs to internationalise more, and we take great efforts to do that. However, the devil is in the detail, and we recognise that there are interests that we need to protect and opportunities that we need to secure. As I say, all of that comes down to in any given trade situation, what you want to be pushing. We think that market access issues about food and drink for Scottish products are important, and we seek to identify and do what we can to support removal of those where it makes sense. There are other areas where, as we have talked about, the protection of Scottish sectors because of its important economy or because of the standards issues that we have talked about are important to defend. I think that, to say that there is a blanket you are all in favour of this or that, the world is, unfortunately, slightly more gray than that. Protect once and protection once. Does the Scottish Government believe that there is a legitimate role for protectionism? When it comes to standards, yes, I think that you do too. I do indeed. I am unclear why there is no political substance, for example, in the paper that you described earlier. It is all about how important trade is, but it does not seem to set out a clear, principled position. For example, it states that the Scottish Government wants a role to help industries to protect and devolve public services and ensure the higher standards of environmental and consumer protection. Do you recognise that there is a tension and sometimes a contradiction between protecting industries and protecting public services and environmental and consumer protections? The whole trade negotiation process, the clues and the name, is a negotiation where you have different interests that you need to balance on your side and on the part of your trading side. As I said, it is complex and it takes years for a reason because there are not just blanket statements about what is 100 per cent in favour of this or 100 per cent against that. There are standards that we think are hugely important that we would take every step to protect, and that is clear. There are areas where there will be negotiations on differential sector interests, which are important to— There will be times when it is not possible to help an industry and protect a public service, for example the private healthcare industry. You cannot be on the side of a public health provision. We are very clear that we would not want any privatisation of the health service in the NHS. We have made that very clear. We have made it very clear that the difference between the direction of the NHS south of the border is different to that in Scotland. We see it as a risk of opening up the health service in Scotland potential as part of a trade deal to privatisation is something that we are completely opposed to. I think that that is clear. I think that that is clear. I think that what we have said on standards, food standards, environment standards and others is clear as well. I do not have any doubt about that that is clear. If you take a step back from that, you would ask what is our position on trade policy. Our position on trade policy is that we should stay in the customs union and single market because that is the best way to deliver a trade policy for Scotland. The customs union and the single market are also entities that act on a trade policy. Your trade policy seems to be that trade is good and you would like to do more of it rather than having a clear principle position. For example, when the convener was asking about state aid, you seem to be saying that in relation to state aid you want some sexual advantages, but you did not seem to articulate a clear stance about what is the legitimate role of the state in intervening in markets in the public interest. I think that you have to recognise the reality of where we are. I think that it is clear that the start from position is trade good and yes, trade is good. Of course, as we want to internationalise Scotland's economy, further I have said that the whole export plan is about how you do that. It is about identifying opportunities to increase trade internationally to further strengthen Scotland's economy, to use our technological and other advantages to deliver products and services around the world. We are very clear on that direction, but there are areas that are all part of the complex situation. It is not a simple blank white. There are areas—I will say them again—about privatisation of the NHS and other public services and about food safety standards and environmental standards and workers rights. A range of issues are areas in which our perspective on those is hugely important. We see a difference between our view and the view of the UK Government. Consequently, that is one of the substantive reasons—rather than just talking through process—why it is critically important that the Scottish Government and the Scottish Parliament have an input to those trade negotiations right through the whole process. We are clearly not going to resolve all of this— I do not understand what you are— I will end, convener, by encouraging the minister on the next occasion that you produce a document like Scotland's role to include some kind of attempt at defining a clear principled stance in relation to what trade policy should look like, rather than just how we get a bit more advantage in the short term. The whole point of trade process is to get a bit more advantage. That is the whole point of it. Given what your red lines are around about the issues that I have talked about and I will mention them again around the protection of public services from privatisation, food standards and other safety standards around environmental standards, those areas that you mark out are red lines for you. Beyond that, it is about how you build your economy and trade more internationally. Minister, we have all been round the houses a few times this morning. However, the bottom line—the heart of the matter—surely is that the EU currently has the largest web of preferential trade agreements at last count, 70 spanning across five continents. Is there anything on the table that will match that? No. The reality is that, as I correctly identified, the EU is one of the three large trading entities in the world with the US in China. It is able to do deals because of its scale and scope that other entities are not able to do. As you correctly identified, it has more than 40 trade deals plus other deals on top of that. The UK Government, after the best part of three years, is struggling to transition more than a handful of those, and even those aren't complete. Some of the countries—Canada, South Africa and others—have said that they see no interest in talking to the UK about roll-over of deals because the UK has had to give away so much on the no-deal deal and tariffs that those countries have pretty much got what they want from that process, so they see no need to give anything away by rolling over the existing trade deals that they have with the EU. The UK is starting off from a much weaker position. Because of time constraints, we are much further behind because, as many of those deals take years to do, the Brexit process puts us in a position where we do not have the luxury of that time. When the clock is ticking on your side and not on the other side, you are in a weak position. For all of those reasons, it is a weak place to be negotiating from. Thank you very much. I thank our witnesses for their time and contributions this morning to the discussion. At the start of the meeting, we agreed to take the next item in private and, therefore, now close this public part of the meeting.