Economy and Fair Work Committee [Draft]

Meeting date: Wednesday, January 31, 2024

Official Report 713KB pdf

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Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill

Our second item of business is consideration of the legislative consent memorandum on the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill. I welcome Tom Arthur, Minister for Community Wealth and Public Finance, and Alasdair Hamilton, procurement policy portfolio manager with the Scottish Government. I invite the minister to make a brief opening statement before I take any questions from members.

Thank you, convener, and good morning, committee.

The United Kingdom bill makes provisions in three areas—public procurement, technical barriers to trade and intellectual property—where legislative intervention is needed to give effect to the terms of the UK’s accession to the comprehensive and progressive agreement for trans-Pacific partnership. Public procurement is a devolved matter, and the implementation of international agreements is devolved to the extent that it relates to procurement. The bill therefore triggers the consent process in respect of the procurement provisions that apply to Scotland. The amendments to Scottish procurement regulations are minor and technical in nature, relating to contracts that are awarded under international rules and contract award notices.

In contrast to the Trade (Australia and New Zealand) Act 2023, which conferred delegated powers on UK ministers for the purpose of implementing the procurement chapters of those trade agreements, and to which the Scottish Parliament withheld its consent, in this bill the UK Government has agreed to make necessary provision to amend the Scottish regulations in the bill. We welcome that change of approach, which affords the Scottish Parliament the proper ability to scrutinise the proposals.

We recommend that consent be given to the bill. My officials will continue to work with UK Government officials to agree a pragmatic approach to preparations for commencement of the provisions of the bill that relate to Scotland.

Thank you. I will take questions from members.

Good morning, minister. I remind members of my entry in the register of interests and my connection to the Scotch Whisky Association.

In that tone, minister, how does the Scottish Government view the opportunities from the CPTPP, specifically the opportunities for growing exports of Scotch whisky to important and developing markets? How will the liberalisation of trade and potential reduction in tariffs in countries such as Malaysia, which are currently an important market for Scotch whisky but with very high tariffs, benefit the Scottish economy?

We welcome the opportunities that the agreement will afford. The analysis that has been provided suggests that, overall, the impact on UK economic growth over the next couple of decades will be relatively minor, but any opportunities that are afforded for key Scottish industries, such as the Scotch whisky industry, are, of course, welcomed.

I am conscious that my colleagues the Cabinet Secretary for Rural Affairs, Land Reform and Islands and the Minister for Small Business, Innovation, Tourism and Trade have written to committees setting out in some detail the work that they have undertaken in engagement with the UK Government on the broader policy intent of the agreement.

The minister referred to correspondence that we have had from the rural affairs secretary, who has raised concerns that there would be potential competition from producers in countries with lower animal welfare standards. Can the minister speak to that this morning? I appreciate that it was the rural affairs secretary who contacted us about that issue, but if the Scottish Government is going to monitor the impact of the agreement on Scottish producers, is that still an area of concern?

We will of course continue to seek to engage constructively with the UK Government on the implementation of the agreement, and we continue to engage with stakeholders. I am sure that the convener will appreciate that it is my colleague the cabinet secretary who leads on those particular matters.

Thank you very much for that, minister. I know that you say that the relationship with or interest of Scotland is mainly around procurement, but I am curious to know whether you have had any discussions with the UK Government about the investor-state dispute settlement provisions in the bill. The UK Government has already agreed to exclude ISDS clauses from any future trade agreement with Canada. Have you had those discussions and received any such assurances with regard to this agreement?

The position on the engagement that the Scottish Government has had with the UK Government is broadly set out in the correspondence that I referred to. Clearly, the matters that are before us today—the issues that triggered the legislative consent process—are fairly narrow and technical and relate to the devolved aspects of procurement.

Do you not see that there is a potential impact on some of the broader policy work that we are trying to achieve in Scotland if ISDS clauses remain in place and foreign investors can then sue the Scottish Government over certain policy proposals that it enacts?

I recognise that there will be a range of views on the provisions of any trade agreement that the UK enters into. I recognise that the Parliament will have and take its opportunities to express its views on these matters. Ultimately, the decision on whether to enter into such agreements is a matter for the UK Government. We obviously appreciate and want to strengthen the opportunities that we are afforded for engagement with the UK Government, but the matter before us this morning is about the relatively narrow and technical aspects of implementation through the act and how they trigger legislative consent with regard to procurement.

I understand that, although I suppose that it can be seen as broader support for issues that could trip up the Scottish Government in the future. However, I appreciate that I am not going to get any further on that.

The Cabinet Secretary for Rural Affairs, Land Reform and Islands raised concern about the lack of a formal role for the Scottish Parliament in scrutinising free trade agreements generally. Although international relations is reserved, such agreements, in practice, impact on the competence of devolved Administrations in a number of areas. How would the Scottish Government like to see any future agreements progressed to improve scrutiny?

I am conscious that that goes beyond my remit on public procurement, and I recognise that, when the committee has previously considered LCMs regarding the ratification of trade agreements, its concern has primarily been with the contents of those LCMs. The Scottish Government’s position, in its constitutional aspirations and the policy position as set out in “Scotland’s Vision for Trade”, which was published at the start of 2021, is well understood. Our views are clearly set out.

With regard to how things operate at the moment, we always seek the maximum engagement possible with the UK Government to ensure that Scottish interests are represented, and our endeavours to that effect have been set out in the correspondence that the committee received and that I referred to earlier.

I will leave it there.

I have a technical question about the LCM. The Scottish Government says that the amendments

“do amount to material divergence from EU law, however they are very minor”,

and it recommends giving consent to the bill. One of the regulations involves the way in which a contract is advertised. Currently, there is an option to include the value of the successful tender, or the values of the highest and lowest tenders. To comply with the terms of CPTPP membership, the option to include the highest and lowest tenders instead of the actual contract value will be removed. Does that have any impact, or is there any significance to that change?

These are, of course, minor changes that we are required to make, given the requirement to implement this particular agreement. On the detail and any specifics, I ask Alasdair Hamilton whether he wants to comment.

That relates to when a contract has been awarded rather than the advertising of a contract competition. Once a contract has been awarded, an authority must publish what is known as a contract award notice. Currently, our regulations, which transpose the European Union directives, allow either for that notice to contain the actual value of the contract awarded or the highest and lowest tenders received. That is a choice that authorities have at the moment. Quite simply, the CPTPP does not allow that choice. It requires that only the actual value awarded be included. That is, as much as anything, a reflection of the fact that the agreement has evolved in a different space with different members. We do not anticipate any significant impact for authorities from it.

So it removes the ability to publish either of the figures.

Yes—it just removes that choice.

As there are no more questions, that brings us to the end of the session. Thank you for attending this morning, minister.

I will suspend the meeting to allow for a change of witnesses.

09:40 Meeting suspended.  

09:43 On resuming—