European Committee, 13 Jun 2000

Meeting date: Tuesday, June 13, 2000

Official Report 166KB pdf

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Convener's Report

I want to delay the convener's report on the items on the agenda, to discuss the trade dispute between the European Union and the United States and its implications for Scottish industry. Cathy Jamieson has been doing some work on this, but she has another meeting to go to. Christine Grahame also wished to comment on it.

Thank you for putting this on the agenda, convener. I am sure that many committee members will wish to comment on it, so I do not intend to take up much time. Information on the issue has been circulated.

I wish to express concern at what might happen to a number of industries in Scotland—notably the textile, and especially the cashmere, industry—if there is no resolution to the EU-World Trade Organisation dispute over bananas. People may be aware of problems on this issue last year. At that point it was assumed that a solution had been arrived at by the EU that would prevent the situation arising again.

Unfortunately, it has been indicated that within the next two weeks the US will relist some of the items that were taken off the previous list. The cashmere industry in particular would be affected, but additional items, affecting a number of Scottish industries, may be included. It is important that we take a view on this and that we support the UK Government in trying to resolve the situation and to protect jobs in the Borders and elsewhere in Scotland.

I hope that the committee can agree today to write to the Scotland Office, to the UK Government and to the relevant bodies in Europe, to press the case. The UK has consistently argued to protect jobs; it is inappropriate that jobs in this country will be affected.

There are other issues in the longer term. If the situation is not resolved, we could face it again in six months' time, when the carousel is considered again. We could face it again in a further six months' time. That in no way gives assistance to what are already, especially textiles, vulnerable industries.

Can you be clear about what you are asking the committee to do? In which direction shall we make representations?

We ought to make representations to the UK Government, supporting its attempt to resolve the dispute, and to the European Commission and to the European Parliament, to urge a speedy resolution.

Before Christine Grahame speaks, do any other members of the committee wish to comment?

While I am supportive and consider that we should avoid anything amounting to a trade war, can the clerks or the Scottish Parliament information centre find out the background to the conflict? As I remember, the conflict is not directly with the United States, but with the World Trade Organisation's ruling that the European Union is in breach of regulations. I would like to know the background to that. The USA is responding to that ruling, rather than directly to the UK. I wish to know how we can help influence the situation through Europe.

The letter from the Scottish Trades Union Congress covers that. Was it circulated?

Yes, it was.

I wish to be clear about exactly what we will say in the correspondence. My understanding is that cashmere has not yet been added to the list. This goes back a stage further, to earlier discussions on the WTO's position in relation to bananas. It is a complex issue.

I hope that members find the letter from 6 June helpful. I passed round 10 copies, so everyone should have one. The letter is to Tony Blair, on behalf of the Borders Knitters Forum and the Scottish Cashmere Club, from Tony Taylor, the chairman of Scottish Enterprise Borders. It gives a full history of the cashmere-banana war, which now involves hormone-implanted beef. The UK supports the WTO decision; it is the EU that is resisting the decision. There are political reasons why cashmere may be put back on the carousel on 19 June. It is one of those pressure points that the US trade representatives know will cause a quick response.

I hope that members will have a chance to consider the letter later. I passed it around because it will give them a clear picture of the impact on the Borders, which accounts for 90 per cent of cashmere production in Scotland—40 companies are involved and 2,000 jobs would be directly affected. The current order book is worth £21 million and most orders are from the States. Much of the purchase of raw materials has already taken place. It is a serious matter for an area that members know is in great difficulty already.

Further, in the third paragraph of the second page of that letter, it is made plain—

I do not have the letter.

I do not know where they went.

It is a fair point. The letter was not circulated through the clerk. Committee members are at a disadvantage. We will leave those comments—

Perhaps I could say that—

Briefly, because I will draw the meeting to a conclusion in a few minutes' time.

The effect on the Borders would be devastating; that is made clear in the letter, which is non-political. There are long-term impacts. I will get the letter to members of the committee, as it seems to have disappeared. I did not want to interrupt the previous evidence. As you know, I did not know whether I would be able to make it to this meeting.

I would like the committee to send a letter to the Commission on this issue, supporting the UK position and setting out the committee's view. I would also like the committee to make representations to the US trade representative, to the US consulate in Edinburgh and to the US embassy in London. This is a very serious matter for a vulnerable small community in Scotland. We want to know why we are in this situation again when the industry thought that the issue would be resolved in April. Why is it taking so long?

Brian Wilson, Minister of State at the Scotland Office, has taken up this issue and has made clear the UK's position to the Commission. We should support that position and argue for an early resolution of this issue in line with what was understood to be the previous agreement between the EU and the WTO.

Without wishing to minimise the potential effect of this decision on the Scottish cashmere knitwear industry, its effect would not be limited to the Scottish cashmere knitwear industry or to the Borders, but would extend to a number of product lines in different parts of Scotland. Many Scottish jobs are dependent on a favourable outcome to this dispute. I am sure our representations will want to reflect the fact that this is a broader threat.

Any letter that we send will not single out a particular industry. Cathy Jamieson is suggesting that we write to the Government to support the line that it is taking, that we write to the Commission and that we write to the European Parliament. I suggest that we copy those letters to the organisations that Christine Grahame has identified.

And to our Scottish MEPs.

Yes. Is that agreed?

Members indicated agreement.

We move on to the Commission's white papers on environmental liability and procurement directives. If members have an interest in those issues, they should indicate that to the clerk to the committee. We will receive a private briefing on those documents before we consider them again in committee.

We propose to appoint a committee reporter to prepare a response to the Digital Scotland task force report. I do not want to suggest David Mundell, but he has expressed an interest in this issue.

I would be happy to prepare a response to the report. My aim will be to put the Digital Scotland task force report in the context of the e-Europe initiative, which is an appropriate thing for this committee to do.

Thank you.

The last item is simply for noting, as we will come back to it. Stephen Imrie has made contact with his equivalents in the Northern Ireland Assembly and the Welsh Assembly. It would be useful if we could develop reciprocal links with the committees of those bodies that deal with European matters. We will probably need specific proposals for doing that, but today I would like us to agree the principle of making those links and initiating discussions.

I have written to the Presiding Officer to ask for guidance on how we might take forward the idea of links with the Republic of Ireland, which is a different matter. We have also had some discussion with the European Scrutiny Select Committee of the House of Commons and the European Union Select Committee of the House of Lords. We need to consider our relationship with equivalent committees both within the UK and in the Republic of Ireland.

That is very welcome. I draw members' attention to the fact that each member of the Welsh Assembly, even those who do not sit on the European Affairs Committee, is entitled to one trip to each member state of the European Union, funded by the Assembly. That compares rather favourably with the restrictions that the Scottish Parliament places on members of this committee.

That issue will, no doubt, come up in discussions.

I apologise for the short notice, but we have been asked to participate in a meeting with the German-British parliamentary group from the Bundestag at 3.35 pm on Thursday 22 June. I have not been told the venue, but the clerk will inform members of that.

Our next meeting will be in private and will take place next Tuesday at 2 o'clock, here in Edinburgh.

Meeting closed at 16:19.