Welcome to the third meeting of 2015 of the European and External Relations Committee. Can I make the usual request that mobile phones and electronic devices are switched off or on silent? Agenda item 1 is to take business in private and to seek members' agreements, to take agenda item 5, which is consideration of our approach paper to the inquiry. Agenda item 2 is our new inquiry connecting Scotland to how the Scottish Government and its agencies engage internationally. This morning, we have a very eminent panel. We have with us this morning Professor Michael Keating, who is Professor of Politics, University of Aberdeen and Director of the ASRC Centre on Constitutional Change. Welcome back to committee. Professor Keating, Dr Daniel Kinaley, who is a lecturer at the University of Edinburgh Academy of Government. Welcome back to committee, Dan, but on the other side of the table this time. We'll be gentle with you, don't worry. We have Dr Eve Hepburn, who is a senior lecturer of politics and international relations at the University of Edinburgh. Welcome to committee for the first time, Eve, but your written submission has gained a wee bit of coverage this morning in the media. Well done to that. It always gives a good focus to the committee, but I'm delighted to have you all here. We weren't going to go with opening statements, just I'm going to do a general opening question, which is really just, you know, what do you see as the main drivers for sub-state governments and international relations and international work that they do? If you've got different perspectives on that, we would love to hear it this morning. Just give me a nod to who's going to go first, Eve. The main drivers of external relations of sub-state governments are usually quite functional, especially with an emphasis on economic relations. The primary activity of sub-state governments is trying to increase trade and foreign investment in the country and boost the economy. There are various ways that sub-state governments have gone about doing that, engaging in trade negotiations. Bavaria, the land in Germany, has been very successful at doing that and has recently finalised some biotechnology trade agreements in the Far East. Those functional considerations are one issue. There are also political considerations as well to try and achieve more representation in international bodies. The European Union, UNESCO, the Nordic Council or other areas whereby sub-state regions seek to gain a higher political profile for themselves. Something that I've been interested in as well is an ethical or moral aspect of a sub-state government's foreign relations. It appears that many of the successful strategies adopted by sub-state governments have had an overarching moral dimension to them. For instance, the human rights dimensions of Catalan and the Bas countries' external relations, California, which seeks to be the moral consciousness on environmental matters and the island islands, which have developed a notion of being the islands of peace and a model for conflict resolution in the world. The minimum aim is to represent the internal competencies abroad. There is a spillover of what the Belgians call internal and external, which means that if you have responsibility of something internally, you have responsibility externally. This is particularly important in Belgium recently because they've just had another state reform, which is a round of devolution, which a lot of competencies have been devolved to the regions and the language communities, and they automatically get the external consequences of that, which involves being represented in Europe, but it's also being represented in the OECD, the International Monetary Fund, the International Labour Organization and international negotiations generally. That also includes economic matters that Eve referred to, which is the biggest driver because of the notion of competition that seems to have taken over the entire world, and it applies not only to states but sub-state entities as well, competition for investment, competition for technological advantage, but also partnerships which other places so that they can jointly work to improve that competitive advantage. The environment has become extremely important because this is something that cannot be contained within national or any other boundaries. It's also one of the kind of normative issues that Eve has referred to places try to demonstrate, whether it's stateless nations, cities or regions, that they're good global citizens and that they can do more for the environment despite the demands of competition. There's a big cultural element, especially in those places where there is a distinct language or the language is threatened. There's a political dimension which is sometimes important in itself, and this shades into what is known as proto-diplomacy, that is where there is a nationalist government in power preparing the way for maybe independence or at least constitutional change. This is the dominating theme at the moment in Catalonia where they have been making a lot of effort around the world, especially in Europe, to assert their right to have a referendum on independence and seeking recognition and external support for that. Then, an area that's been of growing importance as well as international development, partnerships for international development and aid. Scotland has a small programme in relation to this. The Basque country has a very large programme. Those are the main things. They become more important as the world is internationalised, but in all cases they're running into serious resource constraints. All the cases I've looked at recently, just updating the paper I did a few years ago, shows that all these sub-state governments have increasing ambitions and increasing international aspirations and responsibility, but fewer and fewer resources to meet that. That's why they're forced to make some very hard decisions about priorities. Dr Canealy. I'd agree largely with everything that my colleagues have said. I think the point that I'd add is that a lot of these areas are linked. These drivers are quite linked. The functional driver has historically been the main one in terms of boosting the economy, trade, FDI and so on. If we think about the cultural side of sub-state diplomacy, obviously promoting your culture has an element of promoting tourism and so on. That has a feedback into the more functional economic side. Likewise, often times promoting your culture is part of your political sub-national diplomacy as well. These things can shade into each other. On the normative front, often times you will find literature, academic literature on sub-states who are looking to stand out as normatively different from the state of which they're a part. Obviously that has a political dimension to it and the politics of difference between the sub-national government and the national government can be quite important. I think just to bear in mind the linkages between all the areas is important. A quick question then. I've mentioned lots of areas that are the main drivers, cultural drivers, economic drivers, political diplomacy in regards to Scotland and other. What strengths do you think Scotland has in all of these things and what areas do you think are challenges? One of the strengths that you'll see from my written evidence is that Scotland has something that I believe is quite exportable to the rest of the world, which is its democratic credentials. I'm a comparative political scientist so I work in lots of other countries and I often find that many people are incredibly impressed by the peaceful constitutional negotiations that we've had in Scotland surrounding our future. I don't think that people within Scotland realise how well we've done in that respect. To that end, I've been looking at various other countries that have had more of a normative or ethical dimension to their foreign policy. The Holland Islands, for me, were particularly interesting because they have modelled themselves as the model of conflict resolution, which they've been able to export around the world. They've been able to attract hundreds of foreign delegations to the Holland Islands to learn from them and they've also been able to tie that in with their other functional objectives as well in terms of building economic relationships with places elsewhere. I think that there's an opportunity for Scotland, especially given that we've had the eyes of the world on us for the last couple of years and the independence referendum, to galvanise that interest and to valorise our credentials as a place where we have a strong democratic process. The Constitutional Convention is something that I've spoken to colleagues in Tobago and Tibet about as a way of engaging civic society and the public in our politics. Obviously, we've had the highest level of voter engagement in the referendum last year. A lot of people around the world are interested in how we're able to do that. I think that advertising would be a PR campaign. Advertising these democratic credentials would give us a focus for our other functional objectives and would be of interest to a lot of other countries around the world. Scotland has the advantage of name recognition that is really important. Of course, how we represent Scotland to the exterior is important as well because we're all familiar with some of the cliched representations of Scotland that have been going around the world, which need to be overcome. There's a lot of effort going into presenting Scotland as a dynamic, modern, outward-looking society. I agree with what you've said about the democratic credentials and the exemplary nature of our referendum, which people in Scotland don't appreciate, but maybe when they pick themselves up up the floor and their bruises have healed, they'll realise that it was done quite well compared with how these things are handled elsewhere or compared with what is going on in Spain at the moment. If the Northern Ireland peace process can be exported around the world as it is, I think that Scotland has got an even better case to say that these things can be resolved in a peaceful and democratic manner, in a way in which both sides accept the result. Scotland has also got a lot to offer by way of education because it has a distinct educational system that has many strengths and there's always a danger in educational debates here that we become to parochial law. We just compare ourselves with England. If we put the Scottish education system in an international context, it's got a lot to learn and a lot to teach. I would emphasise the theme of learning, policy learning, which is an important element of prior diplomacy but is very rarely done effectively because it requires a long-term engagement and engagement of civil society as well as government and certain amount of resources going into that so that we can improve our policymaking system. Not only by learning from abroad but also by engaging in a debate and showing maybe there's some things we can teach others. I'll come on to questions that are a little bit more problematic of relations with the central government in prior diplomacy. In Scotland, the referendum period apart, where there's a great deal of tension, tended to be fairly cordial compared with other places and not a lot of big, obvious clashes. There has been, again, until the referendum, quite a remarkable continuity in the main lines of Scottish external policy between different governments or different coalitions. There is a certain amount of consensus there but that does need to be worked on, particularly after the referendum, to make sure that there is a recognition of the position of Scotland without necessarily challenging the representation of the UK abroad. The other big thing that Scotland really needs to do is to internationalise itself. It's all very well going abroad and talking to people abroad but in Catalonia, for example, there's been a huge emphasis on the internationalisation and Europeanisation of Catalonia to make sure that society as a whole is informed about international relations and international opportunities. This is something that we don't do very well. We're just as bad languages as other parts of the United Kingdom. There's not a deep involvement in Europe. There's a feeling in Scotland that Europe is somehow a good thing because it solves all kinds of problems for us but not a deep engagement that I find in other places. There's a lot of work to be done here in the education system, in business, in civil society generally by exposing us more to Europe, becoming part of Europe and international societies and only in that way can we get more out of international linkages and international partnerships. I would agree certainly that in terms of what we went through in the referendum process, that is certainly something that we should make as much of as we possibly can in terms of exporting our knowledge there to other places. I think that the time now really is now to do that. That will fade if we don't strike quality irons hot, I think. Other areas, just to add, rather than to repeat what my colleagues have said, I think in areas, functional policy areas like energy and climate change, there's a tremendous amount of expertise and knowledge and we already see some evidence that is translating in the Brussels setting in the European Union context. I also think that a lot of the work that the Scottish third sector does in human rights is certainly something that is exportable and there may be other opportunities that currently aren't available to tap into networks and international bodies in terms of human rights. That would probably be contingent on a change in the relationship between UK Government, Scottish Government in terms of what Scottish Government is allowed to do, but the potential certainly exists. If you look at Quebec, for example, since the mid-70s, they've played a relatively active role in what is now the UN Human Rights Council and what was previously the commission because they have that opportunity that's available to them through their system. So I think human rights, I think energy, climate change, I think the cultural and creative sector, I don't just want to sort of get into doing a list, but in terms of things that are actual opportunities right here and now, just to go back to what Eve started with absolutely the issue of constitutional change and how you handle that peacefully. But also Europe, to me as someone who is in support of the UK's membership of the European Union, looking at the opinion evidence in Scotland, yes, there certainly does seem to be a difference in public attitudes towards European integration in Scotland, but it's not as dramatic as sometimes it's made out to be. And actually, Euro skepticism, softer forms of Euro skepticism have grown over time in Scotland. Quite alarmingly, if you look at the shifts in the Scottish social attitudes survey over maybe 10 or 15 years, the number of people who respond to the question, we should be trying to repatriate powers from Europe has gone up really quite significantly. Perfectly legitimate position to agree with, but I'm just saying at the moment I think there's an opportunity for the Scottish Government to articulate something quite different on Europe and really take up the role alongside others in the broader British political context of a champion of Britain's membership of the European Union and that's an opportunity for the here and now. I think it's an opportunity that will arise over the next few months following the general election as well, absolutely. Willie Coffey. Thanks very much, convener. It was just to come in on this point, I'm really interested in this idea about Scotland advertising or exporting or democratic credentials and it's to get your thoughts on who's best to do that. Now that may seem like a daft question, but should Europe do it, should Scotland do it, should Britain do it and how would we do it better? The example that I can give you is that during my time on the Audit Committee here, we had several visits from countries particularly in the Balkans, emerging democracies for example, that had no systems of democratic scrutiny or accountability and they were looking to countries like Scotland for assistance. Now, it tended to kind of stop there though, there was a visit and we all had a good time and we shared some time together for an hour or so, but that was it. It needs to be more than that, I would suggest and I'm wondering what thoughts you might have about how we could extend that and reach out to countries like that to make sure that they do develop their democratic systems much more powerfully than they are at the moment. Thank you, that's a very good question. One of the examples that I looked at a lot was the Allland Islands and how they went about exporting their model of being a place of conflict resolution. The Allland Islands, for those who don't know her, about 6,000 islands in the middle of the Baltic Sea and have been fought over by Sweden and Finland, they were eventually granted autonomy to Finland under a League of Nations resolution 1920. The Allland Islands are interesting because it was decided in the 1980s that they had to have a bigger international impact but also that they had something to tell the world, something that the world could learn from. So it started off with the political parties themselves engaging in discussions on how to do that. They also involved a lot of civic society actors who also had a stake in seeing or promoting Allland as a place of conflict resolution. For instance, Audit Scotland would be an important actor in contributing to debates about how Scotland could be advertised as a bastion of democracy for other places that are undergoing similar constitution negotiations. The Allland Islands then identified certain parts of the world that could potentially benefit from their advice and support and invited them to the Allland Islands to learn more about their model and their process. In addition to that, they got the support from the Finnish Ministry of Foreign Affairs, who also helped to advertise the model to the rest of the world and their own foreign policies. As Michael was saying earlier, it is important to have good lines of co-operation with the central state government to advertise that model. In short, you need to engage a range of political actors but also civic society actors in order to come to some sort of agreement on what that model might be and where you could best target it. What countries in the world could benefit most from that type of model? The problem with these kinds of initiatives is the follow-through. As you say, you can have meetings and everybody says let's meet again and nothing ever happens. You need to have some partnerships focused on things that are going to have some outcomes because people are not going to meet unless they can see that something is coming from it. It requires resources, not a huge amount of resources, but a time when resources are very scarce. This is the easiest thing to cut, even though it's very important in the long run. At the political level, there are international linkages in which political parties tend to talk to their counterparts elsewhere rather than talking to people who disagree with them. There are networks where they don't really come together. There is also quite a lot of reticence because of the political sensitivity of many of these questions. Once you start talking about independence or self-government, whatever it might be, people become extremely defensive and so we don't have that conversation about creative ways of working our way through these kinds of things. This was apparent in the referendum here. It's a constant problem in Catalonia. When I go to Catalonia or when I'm somewhere else in Europe and the Catalans turn up, either the Spanish government is not there or there's somebody sitting in the back and taking notes and taking people's names. I never see them actually debating amongst themselves once they get outside of their own country. We need to involve all levels in these kinds of debates, open up these kinds of debates at the political level. We have these wonderful debates at the academic level but at the political level you don't have that kind of learning. People tend to fall into rather rigid positions and simply promote these rather rigid positions abroad. Then there's the way in which all these various things go together. There's a disagreement in Scotland about whether we should become independent or not, but there's a huge amount of consensus about what kind of society we would want to be. I'm setting up a link with an institution in the Basque country. We had a little Skype conversation the other day about this in which they're promoting some notion of the Basque country broadly around development, inclusive development, the social environmental dimension of development and the way in which these ideas can be thought about internationally. In their case they've got a big problem, namely the association of the Basque country with violence. They've got a peace process and they said beyond the peace process now we want to think about things where we may be able to get some consensus. We can show the world not just the peace process ending with violence but how one can have new ways of thinking about sustainable development at the sub-state level. Now these things are not politically polarising. These are areas in which we can think about learning and mixing and matching policies in different ways. Again, that's something I think Scotland will be very good at because we have had these debates and our referendum debate wasn't just about independence as it is in Catalonia. It was about what kind of Scotland there should be and I think we should take those bits of the referendum debate and ask ourselves what are the implications of it, what kind of economic model do we want, what kind of social model can we do, what kinds of things we can do with what constellations of powers, whether it's independence or otherwise. We've learnt a huge amount of data. We've had a very intense conversation and I wouldn't like to lose it just because the independence question is off the agenda for the moment because there are other aspects of that debate that are really very important. Professor Keating, you said that we had a lot to do in terms of education and business. We in Scotland launched a languages programme for our young pupils in primary and secondary schools in a bid to try and enhance the skill level of our youngsters so that when they go on to university and hope for you when they graduate, they will be able to acquire the skills of young people. We've had employment in Europe as well as work with European partners almost on equal footing. Is there something else that we're missing that you feel that we still need to do a lot on and if so, what areas would you suggest that we need to perhaps concentrate more on? There are international educational networks in which Scotland participates and others where it doesn't get really involved because it doesn't have the resources, for example, in UNESCO or in the European higher education area, the so-called Bologna process, where Scotland has a kind of watching brief, but it's not really thoroughly engaged in that. So it will require resources to participate. As far as the languages are concerned, yes, the Scottish Government has done things, the UK Government has done things in England, the Welsh Government has done things, it doesn't seem to work and I don't know what we're missing there. But there is this very reluctance of British people to learn European languages and to engage and even I were both at the European University Institute in Florence for a while and it was almost an embarrassment, the lack of language capacity of British students and they were the most linguistically capable of British students and even they were frightened about learning languages. I think that takes a cultural change and we've got to get rid of the idea that because everybody else speaks English therefore we don't need to speak foreign languages because we can talk to them but we can't hear what they're saying to each other. We can't really understand the meaning of what they say unless we get into those languages. Now there are certain arrogance here and a certain laziness that really needs to be overcome and people have got to realise that learning languages does have rewards. Not only is it culturally enriching but it is really important to be able to operate in the vernacular languages of other countries. I've talked to my colleagues in education about why this doesn't happen and they don't know any more than I do about why it doesn't happen. Another thing is international exchanges, student exchanges, particularly student exchanges within Europe under the Erasmus and other European programmes for student exchange. We've got a lot of students coming here but not a lot of students going out and that really is a great pity as well because they're losing out an enormous amount there and so there should be greater incentives, greater encouragement for Scottish students and indeed other British students because it's as bad as elsewhere to go out and learn not just other languages but other ways of thinking. This is critically important in business as well because you go somewhere else and you do business. Yes, you're all working in a market economy, you're buying, selling things but there are cultural assumptions about the way you do business that are really important to get into market elsewhere and sometimes we lose out on those opportunities because we don't understand that. You've touched on almost everything that we are doing in terms of encouraging language skills amongst our student population so if we are doing and if we are touching all the bases, what is it that's missing? Now you're saying that yourself and some of the academics are finding it difficult to explain the shortcomings that we've had but those are historical, they're not for the future. I think what we are doing is dealing with issues so that when in the future we will be able to communicate better than we have done so historically. Do you still feel that we're cutting ourselves short or do you feel that the steps or the measures that we've taken to date hopefully will go somewhere to addressing those issues? Many of the policy measures are there about teaching languages in schools. Unfortunately, the state of languages at the university level in Scotland is very poor because of the emphasis on research and language departments very often don't do research. They teach languages but that's not well regarded within universities. Universities are all competing with each other fiercely so they're all trying to get into the areas that attract most students and attract most resources so nowhere are there certain things being done. Certain things are just being left out particularly less used languages so Slavic languages is one example which is a very poor state in Scottish universities. That requires some leadership from the centre whether it's government or the funding council to say we need to have this capacity somewhere in Scotland and some universities got to do it and get the resources to do it. Then there's a problem more generally in society that students should be surrounded by an environment in which this is appreciated. This is a responsibility of government, responsibility of the universities, responsibility of business and everybody to say that this really matters. To present to young people the opportunities they will get if they pay attention to languages otherwise they'll just do something else. They'll be available but the opportunities won't be taken up unless there's a positive image and young people feel that they're going to get something out of it. The ones that do stick with languages do but the message doesn't necessarily get through because it's not reflected in the wider society. I think there's a bit of work that this committee has done in scrutinising the one plus two languages policy but work with the British Council, work with ScottGos Global which is a NUS project. There's a bit of a supply chain going on there right now that maybe we're not seeing the benefits of right now so we're keeping a very close eye on that in this committee and I can see from your point of view you are as well. When I first read the papers my immediate wish was to ask a question about power diplomacy and hard and soft power. When I got here this morning I found a letter from Professor Conely talking about the difference. I still want to ask questions on this. Can you tell us what the term power diplomacy actually means? Can you provide examples of how power diplomacy has been used successfully by sub-state governments in the international engagement policies? That's the first question. The second really is again can you tell us what soft power means and its relevance to Scotland and again provide examples of successful uses of soft power and what the positive outcomes can be for sub-state governments who promote soft power. That's question number two. I hope they're clear enough and I'm sorry if they're too broad. You promoted me to Professor Jamier. I appreciate that. I'll start with power diplomacy and then maybe if I'm talking too long somebody else could pick up on soft power. Power diplomacy I think the simplest way to probably describe it the most comprehensive way is simply the involvement of sub-state governments in international affairs, the totality of what they do in terms of international policy. I find it quite an awkward academic phrase. I'm not really a fan of it as a phrase. I think it's borders on jargon which academics can sometimes like to use a little bit. It's basically external policy of sub-national entities and that could be a government such as the Scottish government but it could also be UK local authorities which also have this sort of activity US states so on and so forth. Examples of how it's been successful. Eve mentioned some earlier on in terms of Bavaria that you mentioned. A lot of the German states have success stories here. I was looking into Baden-Württemberg in terms of their renewable energy sector and they've been able to really set up an international technological hub for that really. And they've done that kind of through the power of attraction of a model that they have and that they've developed and that they're knowledgeable in and can talk about with authority. Which kind of shades us then into soft power because soft power as it's defined by Joseph Nye who's the Harvard professor who really is at the centre of that concept. He says that effectively soft power is the ability to attract people through persuasion through the values of your system as such. So it's not about compelling people to do things. It's not about forcing people to do things. It's a form of power that is about attraction that is about persuasion. And he looks at examples for instance in terms of the US cultural sector. A lot of his work is about US power and obviously you've got the military component of US power which is fairly well understood. The economic component of US power and then this third strand which is kind of almost everything else which is the power for things like the Hollywood film industry and the ability of that to culturally export norms and to culturally export a way of life and a set of values and so on. The US higher education system in terms of its ability to attract in students, train them in a certain way and then send them back around the world and to create networks who have been trained through your educational system and you can then tap into for alumni and development and so on and so forth. So that category of soft power as Joseph Nye looks at it is really broad. I've just mentioned two instances in terms of US soft power but there's so much more to it even than that. It's a very broad category but it's perhaps easiest to distinguishable from compelling people whether that's through use of force, whether it's through sanctions or even tying things to like conditionality and trade agreements. So you'll often see states signing trade agreements with developing countries and saying well in order to have these concessions you need to do such and such with human rights, you need to improve your governance. I don't think, my understanding at least, is that would encounter soft power because there's an element of compulsion using the stick of trade concessions to get somebody to do something as opposed to effectively convincing them through the power of persuasion that the outcome you want is the right outcome. On the measures of success it's extremely difficult to measure success which is part of the problem of this whole area and why it's very difficult to get resources into it because politicians want results in the short term, concrete results. This is long term and when something works you don't quite know what it was that works and what would have happened in the absence of that. We do know that it's important but it's very difficult to demonstrate in the short run but I can give you some examples. One of the best documented is the case of Quebec. In fact this is where this term, paradyplomacy, this jargon term came from looking at what was happening in Quebec and elsewhere in Canada where it was an essential part of what was called the quiet revolution in the 1960s and 1970s. The modernisation of Quebec, which involved creating or dynamising the business community in Quebec, becoming more internationalised, becoming more connected into international markets, inward investment and outward investment and an organisation within the society as a whole to support this. Now there was a political motive because the Quebec were at that time felt themselves somewhat marginalised and a minority was in an overwhelmingly anglophone North America but there was a hard edge to it as well which was about looking for business opportunities. At some point they started talking about Quebec Inc, Quebec Incorporated, which was a very unfortunate expression and has gone away. It did refer to something real which was that when it comes to things that are identified as the interests of Quebec people could come together despite the fact that they disagree politically about other things. There is that notion that we can sit around a table and agree on certain things that are in the common interest. Scotland has got a little bit of that but it has lost some of it since devolution because devolution has created political divisions within Scotland.  In the old days before devolution it was very easy for us to say that we are all sticking together against that lot up there. Now we have to realise that we differ amongst ourselves and we are maybe in danger of losing some of that common interest that is important. It is the balance between our own internal divisions and projecting ourselves abroad that is quite important. Whenever I go to Quebec or read things there I can see that they know how to play that game very well. Another example is in Catalonia which has been extremely active in this field because until recently the predominant political opinion in Catalonia has been in favour of some kind of advanced federalism, divo, max or whatever, not until quite recently independence. There was a feeling that we can do certain kinds of things even within the existing constitution that we can agree about even though independence may be supported by some kinds of people. Again, there was an element of consensus around certain things even though differences about other kinds of things. For example, Catalonia has adopted a policy of two languages initially, Catalan and Spanish. That has become three languages. All children graduating from high school should be competent in Spanish, Catalan and English. It used to be French. English is now the international language. Similarly, the business community in Catalonia, the business organisation, the fermented de travail, that is equivalent to the CBI more or less, they are very strongly committed to the internationalisation of Catalonia and facilitating all kinds of ways inward investment and outward investment. There is a two way flow of investment and ideas in business. Again, at the transition in the 1970s Spanish industry was somewhat behind the rest of Europe, so this was about catching up with the rest of Europe, modernising industry. There is a political dimension to it which has now become quite conflictual because there is an issue about independence and a disagreement about that. Until now, there has also been quite a consensus on the idea that whatever we think about the long term merits of independence, there are certain things that we do agree upon about getting Catalonia well connected in European and international networks. They are extremely good at networking. They are extremely good at knowing the right place to go to and the right people to talk to in international organisations. Unlike the Brits who tend to get on the Eurostar or the plane and come back after the meetings, the Catalans hang around in the evening. That is important, too, because there are informal networks that are very important for exchange of ideas and exchange for influence. This is what soft power is about. It is not about forcing people to do things, it is about diffusing ideas. Who pays for the Catalans hanging around in the evening? They are not so puritanical and carbonistic about entertainment budgets. They are much more Mediterranean and you eat well when you go there, but of course there is a cost. This can easily cost become junketing, but if it is well focused and there is a purpose, then these informal networks are important. Adam, do you want to come in on some of the points that Jamie has raised? My own take on this is obviously the generality of paradigmatic activity that we undertake. It has a purpose in the sense that we want to grow our soft power, our influence, if you like, over decision makers, particularly in policy areas that matter to us economically. For example, with renewable energy, food and drink issues, those kind of things where we would be engaged with other Europeans or people elsewhere in the world. I note from Dr Hepburn's written evidence that our paradigmatic strategy has been criticised as ad hoc. As part of your answer to that, Dr Hepburn, you are suggesting that we try to, if you like, brand ourselves the Scottish model of democracy, which would cover all these kind of areas. I do not see how one thing such as that can do all of that to be perfectly frank. Shouldn't we have ad hoc paradigmatic activities? Are we not trying to get into all the nooks and crannies that we can in terms of growing our influence in the world so that people turn to, ah well, I think we should have a wee chat with the Scots on that subject because they know all about renewable energy or those kind of things. That is how you grow your influence. Even in the academic world, people such as yourselves, no doubt, people in Europe will pick up the phone and give you a call to ask about particular things. Is that not what we should be doing in a generality of things rather than focusing on one particular aspect of our experience? Thank you for that question. Perhaps I can clarify what I meant in my written evidence a little bit. When I was talking about trying to develop and export a Scottish model of democracy, that did not mean that it would take over or replace all of these other strategies that we need to focus on. A lot of them have been identified recently by the Scottish Government and its different narratives. There is an economic narrative, an education narrative, a food and drink narrative and so on and so forth. All of these are very important to Scotland and they all should be given different degrees of weight depending on what our priorities are at different points in time. My point was merely that some of the most successful strategies of substrate governments who all have these different functional objectives, the Basque Country, Catalonia, the Quebec Government, Bavarian and so on and so forth, is to try and present a narrative of their country being somehow different of having a niche in the world. The way that I was recommending creating a Scottish model was to develop an overarching narrative for all of these other functional narratives. For instance, to take the issue of education that Michael brought up earlier, that could be linked to a narrative about Scottish democracy. We could talk about our advances in education and public education, our influences throughout the world in terms of our higher education system. It could be linked quite clearly to our education strategy. I think that a Scottish democratic model in fact could be linked to almost all of those strategies, but just to provide an overarching narrative in which to try and pursue these different functional objectives. I think it depends what you mean by ad hoc and I think we need to sort out a couple of different, not necessarily levels, but a couple of different spheres of activity. I think Eve's exactly right in what she just said though, which is that that narrative, that democratic narrative could potentially be embedded across all sorts of range, a whole range of specific policies that the Scottish Government then seeks to have influence on internationally. Somebody would need to co-ordinate that, and I don't know, I'm not necessarily here to recommend who that would be, but I think somebody would have to co-ordinate that narrative and that message. And then I think your point about getting that out as broadly as possible and in as many different domains as possible, I think then I would agree with you that that's quite right. But in terms of specific public policy issues, international or transnational public policy issues, there I would disagree that it should be ad hoc. If there's one thing that the literature on not only power diplomacy but also the literature on small states, and even though we had a certain outcome in September, I still think there's a lot that substates can learn from small states. All of that literature points in the direction of prioritisation and specialisation and really picking a handful of key things that you can really excel in. And that's simply back to this resource constraint, which is that small states, sub-states do not have the resource in terms of foreign affairs that larger states have and they have to prioritise because otherwise you end up with a policy that's sort of a mile wide and an inch deep. And then nobody's going to pick up the phone to you because you're not going to be seen as the expert on something. If you want to be in Brussels and you want to be right at the centre of that policy community as the go-to person on renewables and energy, that takes years to build up those kind of networks and that kind of knowledge. And if you're diluting that by sort of running after everything that might come up on a given week, then I think you sort of undercut the strategy. So I think it depends what you mean by ad hoc. The follow-up to that question really is, how can we measure the effectiveness of whatever strategy it is we adopt? The notion of self-power influence, if you like, doesn't lend itself to measurement, does it? I mean, for example, can you give us some sort of indication of how has our self-power grown since devolution or not? I mean, we did have an office in Brussels before devolution, Scotland-Europe office in Brussels before devolution. Are we getting more influence since devolution or not? Can you actually tell us that? Anecdotally, you hear when you talk to people at work in these policy areas and when you talk to people in Brussels. Anecdotally, yes, you hear that Scotland is building quite credibly a reputation for itself in these key areas like energy, justice and home affairs as a portfolio. In a sense, the four that have been prioritised by the Scottish Government in the EU framework from 2009, but it is quite anecdotal. Now, in terms of harder forms of measurement of soft power, I mean, the Scottish Government itself uses, as one of its performance indicators, the anhalt index, which looks at the perception that other states have of you as a state. That measures a whole range of things in terms of how easy it is to do business with you, quality of governance and institutions and so on. It was in the news last year that Scotland went down a few places, but it actually went up in terms of its overall score. Now, I'm quite skeptical that these kind of measures really tell you that much. It reminds me of the scene in Dead Poets Society where Robin Williams speaks to the kids about whether or not you can measure poetry. Then he asks them to tear the page out of the book because he thinks that it's rubbish. I have a similar sentiment to that. I think that a better way of measuring success in this area, and I think that it's something that the Scottish Government and the external affairs team could do better. I don't want to be critical of them because I think that they do good work, but they could do better is through real focused case studies. You have to sort of process trace this over a period of time. We went to this meeting. We then saw this output. You have to build up a compelling narrative, and then it's for other people to accept whether that's A, persuasive or not, and B, justified by a justification of the resources that underpin it. To me, it's not quantifiable, but it takes time and you have to pay people to do those kind of evaluations, but it is possible. I don't think that it's being done as well as it could be at the moment. Public diplomacy is something that sub-state governments don't just do. It's also state governments that have invested a lot of time and resources in public diplomacy. That is to try and increase the international standing of the country and the world stage and to build up relationships and positive public reflections on that state. The US has invested a lot of time and resources and money into trying to evaluate its public diplomacy effectiveness. It's got various ways of doing that. I had a look at one of their documents last night. It's very difficult to do, as Dan said, but there are various ways you could do it qualitatively. For instance, the US identified eight countries that were of importance to it. It conducted surveys, about 6,000 people, to try and evaluate how they perceived the US in various spheres. Another way of doing it could be quantitative measuring, for instance, how many times Scotland is referenced positively in the social media. That's another way of doing it as well. Places such as the US and the UK have realised the importance of public diplomacy, but they are also trying to measure in order to invest more resources where you're having a greater impact. That's a greater strategic priority. What Dan said about identifying certain places and trying to build up a narrative to see how Scotland is perceived and how that has changed would be something of value to the Scottish Parliament and the Government. I'll make a more general point. It's sometimes a mistake to prioritise policy objectives that you can measure. That's what got us into all this targetary business that's been such a bane for public policy. Sometimes you've just got to take a gamble. Many of these things have intrinsic value anyway. It's good that students should be exposed to different cultures and different languages, whether you can measure it or not. We think that it has positive economic benefits, but that may even be a side product. The other point that I want to make is that we don't really want to present a monolithic image of Scotland or an essentialist image of Scotland. This is a very pluralistic society. That's one of its strengths. We should recognise that. This is not at all in conflict with what Ivae is saying, because we have different ways of handling our plurality and our differences. That's the Scottish model. It's not that we all think the same way. Of course we don't. It's that we have different ways of handling these democratic differences and these democratic debates. How relevant are constitutional limitations on the activities of sub-state Governments? What can we learn from experience, for example, in Germany as to the role of Bavaria compared to other plants? This is especially pertinent for European Union representation and the ability of sub-state Governments to access decision making at the European level. Your constitutional status has a very strong bearing on the extent to which you can do that. You mentioned Germany. The Bavarian lender has a right, for instance, to represent the country and the council of ministers. As does Belgium and Austria and these various other places. Belgium as well. The Belgium constitution is probably one of the most progressive in terms of giving its sub-state Governments international powers. Michael said at the very start that this relationship between internal and external relations has enabled, for instance, Belgium, again, a federal country to write into the constitution that the regions in Belgium can represent Belgium and UNESCO and other international organisations as well. So clearly a written constitution, a federal constitution often comes in quite handy to give constitutional rights to sub-state Governments to represent themselves politically on the international scene. But when it comes to public diplomacy that's quite different because that doesn't necessarily require constitutional levers or mechanisms to project the sub-state region across the world. That's why a lot of sub-state Governments have indeed focused on public diplomacy rather than other areas of hard diplomacy because they don't necessarily have the competence in those areas. I'll stop there and pass it on to my colleagues. The EU is critical because there are different arrangements in different countries in Belgium and Germany stand out as being those that have a constitutionally entrenched right for regions to participate in the European Union. Elsewhere it tends to be much more conflictual. Outside the European Union there's been a lot of conflict in Canada about constitutional competences and treaty rightifications and so on. Mostly but not entirely affecting Quebec. It's also affected Alberta and some of the other provinces. In Spain the regions, the autonomous communities are constantly coming up against constitutional limitations and a lot of these end up in the Supreme Court. In Belgium there is this right to be represented externally corresponding to internal competences but it poses a lot of difficulties, a lot of constitutional difficulties that have worked out. So it's a problem elsewhere. It's a less of a problem in the United Kingdom because of the nature of our constitution, the unwritten constitution and the flexibility of the constitution. And as far as Scotland is concerned I think there are maybe some constitutional things that could be done but much more important in Scotland is that Scotland should be properly organised and be present in the places where there is no constitutional obstacle to it being present rather than focusing on the constitutional issues which are not I think a major obstacle here. Dan, do you want to come in? Just very briefly, certainly yet Germany is, well I'm Belgian, but Germany is an example of a state where the states, the state governments within it have really quite a lot of either powers or protections both in terms of they have the power to conclude international treaties with the consent of the federal government and they have the right to represent their own interests at European, at Council of the European Union. If it's a devolved competence but they also have a right to be consulted on treaties that the federal republic signs if they impact on lender competences as well and if they're not consulted appropriately or if one of the lender have a problem then they will take the federal government to court. And some people would say well that's not necessarily the best way to handle intergovernmental relations, we don't want to make them too litigious but it seems to work though, maybe that's just a difference of the German political culture to the British political culture but it seems to work. And then I think in terms of issues like representation at council for instance keeping it in the European Union context I've always thought that's a little bit of a red herring. I mean I think it gets headlines when people, obviously it was a headline when the cabinet secretary for education was able to present the UK government line late last year but I think the important thing is that Scottish interests are properly embedded in the UK EU decision making process before it gets to that point. I mean that's really just the end point, you're in the room, you're tied to a negotiating line. The important thing is that Scottish interests are more firmly embedded in sort of FCO processes of determining what the UK line is and there potentially is room for improvement in that area but who gets to speak at the council I think less important. Okay, thank you. Okay, Anne. Thank you. Good morning panel. Can I take us back, my colleague Adam Ingram had mentioned earlier, as looking at specific country plans? Could you give some examples of how other sub-state governments geographically focus their international engagement? Yes, that most sub-state governments that are involved in this in recent years have produced plans, they've all reorganised the system, they've appointed a department or agency with lead responsibility sometimes under the first minister, sometimes under a designated minister for external affairs and there's been a sectoral focus and a geographical focus. Well in Quebec it's quite clear that the focus as far as cultural and language matters are concerned is France, the main focus for economic matters is the United States and the North American free trade area and then they've got priorities starting with Latin America as being an important area. The Francophonie that is the French equivalent of the Commonwealth important for language but also important for trade relationships as well. In Catalonia the focus has been first on the European Union and then on Latin America for historical reasons and then opening up to Asia because these places are all looking to Asia, the future China and other Asian countries. That replaces what previously was a scatgun approach whereby you just opportunistically go out and do bits and pieces everywhere. Nowadays there's a much more of a strategic focus. I can add in addition to that, Michael is absolutely right that the geographical focus of sub-state governments depends a lot on historical and cultural linkages that that sub-state government might have. It might also have to do with political linkages as well. I'm thinking about the Catalonia which has established a public diplomacy council which is focused exclusively on public diplomacy. It's called DiploCat and it's been very active over the last few years especially around the issue of the Catalan right to vote as well. I was invited to one of their events in Germany recently so I had a good chat with them afterwards. They were surprised that Scotland didn't have the same number of offices in European cities as they did. They thought that Scotland was way ahead of Catalonia in terms of having representation in Paris, in Berlin, in Madrid and elsewhere in North America and so on. They've had quite a successful strategy of targeting places, European capitals. As part of their proto-diplomacy strategy, as Michael said earlier, a strategy that nationalist governments often pursue to increase awareness about plans for independence. They've launched various public events, had very high profile talks in all of these different European cities. They have also developed business networking through their DiploCat, through their public diplomacy machine as well. Clearly, there are economic functional objectives that they are meeting through public diplomacy. They also have an interesting component on elections monitoring as well, which again has to do with their more ethical issue about the right to vote. They clearly have a very strategic and focused set of objectives for DiploCat and they've been able to get them across quite well in different European capitals. I'm sorry, convener, to take you back to something that you've mentioned there about the overseas offices. Obviously, you kind of mentioned that we're missing a trick there and other countries have recognised that. How could we do that better? How could you give us examples of any other sub-states that do that better? In the paper that I did a while ago that you've got, I list all the offices. Catalonia has a lot, Quebec has a lot. There are different types of offices. Some of them have more of a political role like the Quebec representation in Paris and some are purely economic. Some in Catalonia and Quebec are cultural, but this is to do with language, which is not something that is so important in Scotland. Every few years a new government comes down and closes most of them down in all of these cases because it's the first thing that goes in a crisis and then another government comes in and opens them up again. At the moment Catalonia says they want to open up another 53. I just looked it up the other day before coming here when the resources are available, whether the terrible economic crisis and the resources are not going to be available. Then there are different kinds of offices. If you take in Scottish Development International and Scottish Presence in embassies abroad, Scotland actually has quite a lot representative abroad. We don't have our own offices with a nameplate saying this is Scotland except in Brussels but elsewhere, but there is quite a lot going on there, so it depends on what we're trying to do with it. In the case of Quebec in Catalonia, there is a lot of this proto diplomacy saying that we are here, we are not part of the Spanish embassy or we have our own place here whereas in other cases in the other Canadian provinces for example would be part of the Canadian embassy, but there will still be somebody there. The important thing is to have presence there and in other cases there are private entities, public private entities that are linking particularly important in business or in the Basque case they mobilise their diaspora. They may not have a lot of offices in Central America but there are an awful lot of Basques there, well connected who know who to talk to. There are multiple ways of doing this. I think that that is the trick, not just focusing on the formal office but focusing on networks and how you can get to the right people, influence the right people and how you can get these exchanges of ideas going. That's something that we've got to focus on more. Out of time, but I know that there's a couple of people who wanted some very quick supplementaries. I've got Willie and I've got Jamie, but if you can be really quick. It leads me quite nicely on to the issue about diaspora and how we reach out to the wider community throughout the world. I mean Scotland and probably Ireland as well. The number of people throughout the world claiming Scottish or Irish ancestry is quite huge and do you think we're doing enough to reach out to them? You described the Basque experience, Professor Keating, as being a vital economic resource there. Do we regard our diaspora worldwide as a vital economic resource for Scotland and how do we make that connection with them to try to develop it? The Basque case is almost unique because of this very strong sense of Basque identity carried by people across the world, notably in South America but also in North America as well. There are historic reasons for that. There's been an effort in Catalonia to try and mobilize the diaspora, but for historic reasons there are fewer Catalans abroad than there are Basques. The Irish, and I was talking to somebody in Ireland, one of my colleagues, who had looked at it and they said, we didn't have a diaspora plan, we just stumbled upon it. We woke up one day and realized that there were all these Irish people and many of them were important in business. It is important as long as it doesn't end up with this kind of cliched representation. We know what happened to Tartan a week a few years ago when it was hijacked by that guy Trent Lott who turned out to be a neo-confederalist. We're very dubious credentials. We've got to be careful that what we're representing when it comes to culture is a pluralistic Scotland, not one single vision of Scotland. It's become much better now. Things have improved enormously. It's much more professional. We wouldn't fall into that kind of problem that we've had with Trent Lott. It's quite important on the business side. I was in New York just a few weeks ago representing the University of Aberdeen, who are mobilising not just Aberdeen graduates but Scots and people with Aberdeen ancestry there in New York and in that part of the United States. On the business side it seems to be less important because there's a huge number of business people who could claim Scottish heritage or ancestry but they don't seem to be as conscious of this as in the case of some of the Irish. There may be a potential there as well. As long as I say as it is recognised that we're not trying to promote a single Scotland. We're trying to do other things. We're not just Scots all clubbing together against everybody else. This is part of a pluralistic approach to the world and that there may be people in the United States who have a very... I say the United States because that's where this kind of politics goes on. It doesn't happen in other parts of the world. That could perhaps be mobilised more effectively. But as I said, if something will tend to happen spontaneously, if governments try to do it, then that's going to be a put-off. So maybe the business community itself should be taking the lead more there. I just want to turn it around a little bit and not just talk about our relations with immigrants from Scotland but also immigrants to Scotland as well which I think should be an important part of any international strategy in which has economic, political and cultural ramifications for Scotland as well. Obviously immigration is a strong part of the Scottish Government's economic plan whereby there is a perceived need to increase immigration in order to meet our demographic and labour market requirements of having an ageing population. The fact that Scotland actually wants to increase immigration makes it quite different from a lot of other countries in Europe. In fact, in terms of integrating immigrants when they arrive in Scotland, Scotland also has quite a different approach there. In contrast to England and many other countries, it has a far more multicultural approach to integrating immigrants when they arrive in Scotland. I think that that's something that could also be shouted about in terms of developing an international strategy abroad that links in with this notion of Scotland being at quite a plural place, a diverse place and a place that recognises and values different cultural contributions to our society as well. I've done quite a lot of work on looking at the immigration strategies of sub-state governments and I think that there's a lot of potential and opportunity there for Scotland to develop that further, not only in trying to attract immigrants from certain places abroad but also in terms of integrating those immigrants, even linking to the schools issue that Mr Malik was talking about earlier, of developing a more multicultural curriculum as well in order to try and accommodate different ethnic and cultural backgrounds. I think that there's a lot to do in terms of our various citizens in Scotland as well. Jamie, is your point being covered or do you still need very, very quickly then because we're really running out of time? Well, just in relation to what Dr Canillie, I'm sorry to demerg you so quickly, said about a lack of resources sometimes and taking years to build up networks. Is it easier sometimes for sub-states who already have the mother states facilities in place to interact with international organisations and gain international recognition than it is for small independent countries? That's back to the question of, yeah, you better as part of a larger unit or by yourself and I think you can cut it both ways. Certainly there are resource advantages that accrue to a sub-state region that wants to work very much in partnership and in cooperation with a larger state where the policy is pushing in the same direction, then obviously an advantage will accrue from being able to, not piggyback, that's not the right word but supplement and complement that broader approach. The downside of that is that you're also then attached to the larger party when they're doing things that maybe aren't so popular in certain arenas so you hear a lot at the moment and the House of Lords evidence that was published a report on Monday about this was that British influence is really struggling at the moment. It's on the wane in Brussels and therefore you may get sort of a guilty by association reputation so I think it cuts both ways. To take an example of that, Bavaria or Flanders, which have a lot of constitutional clout within their systems, would have far more impact on European policy making than say Malta, which is a small state in the European Union. So to some extent your constitutional status does not matter as much as the resources and capacity that you have to pursue objectives. OK, we've went well over our time now because it's been an extremely interesting and informative session for the work that we're doing and as you know the other two members of the panel, Dr Hepburn, will realise that when you have an engagement with this committee we tend to not let you go very easily because you're very interested in the work that you're doing. So no doubt in the course of this inquiry we will come back to you for some of your wise words and certainly some of the ideas that you have brought up today are things maybe, you know, I've got Katie taking lots of notes on how we can pursue some of that as well. So can I say on behalf of the committee thank you very very much, this is only the beginning of the work with you and then we look forward to working with you in the future thank you. OK, so now which agenda item 3, if you could be really swift with any of your comments, questions or clarifications on, Willie? See on page 9 of the report on youth unemployment, I mean the bulletins are really good and helpful and informative but I would like to see if possible we could have more of progress reporting with them. I mean we know about the issues about youth unemployment and what they are and where they are and so on but it would be really helpful I think to the committee if we could see some progress updates from time to time on how we're getting on. Any other comments, questions, clarifications, Rod? I've just done the money laundering, it's quite interesting in the comments on the progress of the fourth anti-money laundering directive and also just to draw attention that that will have an impact on us as individual MSPs if that passes. More detail on that? Can't do, yep. Committee agree to make the report, Brussels bill to report available to other committees? Yes. Thank you very much indeed and I'm going to suspend very very briefly to allow for a very very quick comfort break if you need it but to get the Deputy First Minister into the shadow, I don't want to keep on waiting so. Welcome back to the European and External Relations Committee. Agenda item 4 this morning is our inquiry on the Transatlantic Trade and Investment Partnership. We are delighted to have with us this morning the Deputy First Minister, Cabinet Secretary for Finance, Constitution and the Economy to the committee. He is accompanied today by Richard Rawlison, who we have met before in this context Richard. Thank you very much for coming back to committee. Welcome to committee, Cabinet Secretary, and I believe you have an opening statement. I do, convener, and thank you for the opportunity to discuss what the Government considers to be a very important issue that the committee is examining and which explores some of the significant public concern that's been set out around a whole variety of issues on the TTIP agreement. It's important to the outset to put on record that neither the Scottish Government nor the Scottish Parliament has any formal role in the negotiation and ratification of international trade and investment agreements like TTIP. We propose such a role in our submission to the Smith commission but unfortunately that responsibility still lies with the European Commission, the European Parliament and individual member states. The Scottish Government's role is to represent the people of Scotland and to make sure that the UK Government, as the member states speaking for Scotland at the European Union, takes full account of Scottish priorities and concerns, whether those are economic or whether they are about devolved services such as the national health service. As we speak, convener, the eighth round of EU-US negotiations is taking place in Brussels. We will hear updates on that. Following Commissioner Mastrom's decision to publish position papers and negotiating texts, we have some further information about what has actually been negotiated as part of this process. I think we all would appreciate and accept that not every aspect of a negotiation can be undertaken in public but there is a necessity given the degree of concern that has been expressed by members of the public that the process is as transparent as possible and I would encourage the commission to consider the EU ombudsman's recent recommendations on this particular issue. I would now like to turn to some of the specifics, which I think have been a common thread in the discussions that the committee has had so far on the economics of TTIP, the impact on the national health service and public services and the issue of investor state dispute settlement. The committee will have a note from my officials, which summarises the latest statistics from the global connections survey on Scotland's exports to the United States. With £3.9 billion worth of exports in 2013, it is clear that, out with the European Union, the US is Scotland's single most important export market. It is also worth noting that, with 580 companies employing some 98,000 people, the US is our largest inward investor. TTIP provides an opportunity to build on that relationship. It could provide market access for Scottish goods and services and reduced non-tariff barriers. If that delivers growth and jobs for Scotland, it should be welcomed. However, we have to bear in mind, and the committee has explored this issue, that the liberalisation of markets does not always mean that business activity is convenient for our side of the argument that it can then open up our markets in just the same way as it opens up markets to which we hope to gain access. Importantly, and that takes me on to my second point, that opening up of markets should not be undertaken in a way that compromises public services or the responsibility of government for public services. Over the past six months, the Scottish Government has pressed both the United Kingdom Government and the European Commission to ensure that TTIP does not affect this Government's and this Parliament's ability to determine how and by whom the national health service and other publicly funded services are provided. We have written both to the United Kingdom Government and the Commission, and we have raised the issue at the joint ministerial committee. Most recently, this was an issue that was discussed by the First Minister with the Prime Minister when they met in December. Over the course of the past few months, we have seen a number of reassurances given on the extent to which there will be protection for areas of the Government's activities, where the Government would be able to determine how and by whom services were delivered. Some reassurances have been given on this question, but I think that it remains the case that until such time as we see the details of the agreement, we will not know whether those reassurances have any validity at all. I still take the view that the best way to lay our concerns and the public concerns is firstly to have an explicit exemption for the national health service on the face of the agreement and secondly absolute clarity that whilst the UK is the member state, any decisions it takes in the context of TTIP, such as opening up the NHS in England to more private providers in no way interferes with this Government and this Parliament's devolved responsibilities. Finally, let me turn to the issue of investor state dispute settlement or ISDS. This is another area where we have expressed concerns to the UK Government in particular that ISDS may restrict the rights of Governments to regulate in the public interest. I know that that concern has been discussed by the committee as well. The European Commission was right to consult on the issue but clearly has some way to go over the coming months to convince people here and across Europe that ISDS is in the public's interest. The four questions identified by the commission and which Mr Hoobin highlighted to the committee appear to hone in on the right issues. I welcome trade commission and master's statement that the commission would never even consider an agreement which would limit Governments' right to regulate. On this issue and on the issue about the national health service, although reassurances are being given, we will only have final clarity when we see the detail of the agreement that is negotiated. Let me conclude by saying that the Government believes in free and open trade but we must take the greatest of care to ensure that the issues about which members of the public are rightly concerned on the question of compromising our ability to regulate or our ability to determine how the national health service should operate in our own country. It should not in any way be compromised by such agreements. Thank you very much, Deputy First Minister. Many of the aspects that you have touched on in your opening statement are many of the aspects that this committee has taken a keen and deep interest in, especially on public services and the ISDS mechanism. A few weeks ago, as you mentioned, we had Hido Hoobin, who was the deputy chief negotiator on TTIP at our committee, because we were by video conference, which was not very successful in that case. The success of that video conference that day was the information that we were able to extract from Hido Hoobin that day. He seemed very clear that all the concerns that people have with regard to TTIP are unfounded. He was given all sorts of assurances, but we could not really get an understanding of where those assurances would come from. In the meantime, we have Cecilia Malstrom's letter to Lord Livingston, which again backs up that position but does not give us the detail that we are looking for. Especially on the NHS exemption, he seemed to suggest that the NHS reservation would be a reservation that the UK Government would seek from the trade agreement from Brussels. He did not seem to understand that the NHS in Scotland is run slightly differently, and would we need to seek that reservation from the UK to seek from Brussels? He seemed to be not much understanding in how that process would go. From your end of things, have you managed to work out or get any understanding of what that process would be as far as ensuring that public services, especially our NHS, was protected in Scotland? The Government could not have made a clear statement or made clear interventions that we in no way want to see the legitimate right of this Parliament. Under the auspices of Parliament, the authority of the Government in any way questioned in our ability to determine how the National Health Service should operate or be structured or take forward the delivery of services in Scotland. We want there to be no restriction or no danger of restriction of our ability to act properly in exercising our devolved competence in that area. If that is what we want to protect, to protect the existing arrangements that we can determine these choices democratically here in Scotland, then we must be absolutely certain that TTIP does not compromise that. There is almost a double lock that is required there. If the United Kingdom Government, for example, was to say that there should be an exemption written into the TTIP agreement for the NHS to be outwith any possible scope of impact from TTIP, then we would also want to see the devolved responsibility of the NHS. The Scottish Parliament is respected in that process because, as we know, a very different approach has been taken to the management and organisation of the health service in England compared to the way in which we are taking that forward in Scotland. It is important that that double lock exists between protection at member state level of the United Kingdom and protection for the devolved competence of the Scottish Government acting with the consent of the Scottish Parliament. Yes, that is where we were trying to get to as well, but we are not getting very far. We have Lord Livingstone in front of this committee at the next session in two weeks' time, so hopefully we can investigate some of that with him. I am going to open out to committee now and I have Jamie McGregor up first with some of the questions that you were interested in, Jamie. Just in terms of the Scottish Government's current policy approach to TTIP, I take it from your sort of optimistic approach, which I would tend to agree with, that I see this as an opportunity. The convener mentioned the letters that we have had, which have been giving support to the theory that this cannot affect the national health service. Is the Scottish Government planning to make a statement about this? A lot of MSPs are receiving letters saying that this is going to be an issue, and the NHS thing particularly is an issue. They all seem to be coming from one particular source because they tend to be fairly similar. I think that people are looking to the Scottish Government perhaps for some sort of statement as to whether or not the NHS thing is a problem or if it isn't a problem. I think that this gets perhaps to the number of the issues at stake here, convener. Obviously, if Parliament wished the Government to make a statement on TTIP, we would happily make a statement to Parliament. Obviously, my appearance here in the committee is designed to help the committee's inquiry and to contribute the thinking of the Government into the committee's inquiry that is being undertaken. However, if there was a desire for a parliamentary statement, the Government would happily agree to that. Mr McGregor asks me the extent to which the Government in such a statement could provide reassurance that the NHS was not affected by TTIP. I wouldn't be able to give that on behalf of the Government for the very reasons that I set out to the convener in the committee in my opening statement, because although there are some reassurances coming our way, we won't have the answer to that question until such time as we see the concluded proposition that comes forward. That is why it is so important that the concerns that members of the public are being expressed about the danger of a negative outcome emerging for the national health service continue to be expressed. The Scottish Government will continue to express those views because we are concerned about this until we see it absolutely in black and white that we have that protection. The final point that I would make to Mr McGregor is that the Government has nothing against trade agreements. There are lots of trade agreements from which Scottish companies benefit and from which Scottish companies participate, but I would make two points about that. One is that we have to have our eyes opened about those things. Trade agreements go two ways. They may well open up opportunities for us, but they also potentially open up threats in our own markets, and we shouldn't view trade agreements as due-eyed propositions that are just one-way opportunities for us all. The second point that I would make is that the determination of those issues is absolutely reliant on the wording and the terminology that is in the agreement. I don't have any visibility on that. I'm not sitting in the room doing the negotiations. Any statement that I was given to Parliament on that question would necessarily be slightly removed from the process of negotiation that is going on about TTIP. Can you tell us then how the Scottish Government has engaged with the European institutions and the UK Government on TTIP so far? Who, for example, have you met with? We've met with the UK Government to discuss this. It's been discussed at a number of ministerial meetings. It's been discussed at the highest level of government between the First Minister and the Prime Minister. It's been discussed in a joint ministerial committee. We've been in touch by writing to United Kingdom ministers on a number of occasions. The issue was first discussed at the joint ministerial committee in Europe in March 2014. Those concerns have been raised very directly with the UK Government and there have been a number of official discussions into the bargain. We've also been in contact with the European Commission about those questions and we'll be happy to engage in further dialogue. Adam Ingram. Just a quick question to call up on that. Does the Scottish Government have any role in approving TTIP? Is that out of your hands altogether? None whatsoever. Can I pick you up on the point that you were making that trade agreements aren't a one-way street? Has the Scottish Government or its agencies done any modelling of the economic impact of a trade agreement with the USA? We have undertaken some early modelling on the possible impact using the Government's internal economic model. That model is a computable general equilibrium model of Scotland, the CGE model. What that early analysis shows—again, I don't want to suggest to the committee more than that this is early modelling—suggests that the impact on our GDP in Scotland could be in the range of an expansion of GDP to the extent of 0.2 to 0.3 per cent of GDP in a positive direction. Our estimation is that the range of export growth there could be between 1.8 and 3.6 per cent, but the range of import expectations could be between 0.8 and 1.5 per cent. That is my point about that this is not a one-way street. That is the early modelling that we have undertaken on the issue, but that is not with sight of all the provisions of the agreement but of looking at some of the indicative indications that would be the case. Given those early indications, it would certainly seem that—we have got some similar type of feedback from the European Commission—people who are talking to us—there are going to be winners and losers out of any trade agreement. We can see some benefits perhaps to the Scottish textiles industry where there are certain barriers to Scottish exports to the USA and cashmere type goods and the like. We could perhaps look forward to an increase in employment and activity in the Scottish textiles sector, but on the other hand, for every job gained in Scottish textiles, we might lose jobs in other sectors. For example, in food and drink, if we have increased access to the European market from US producers whose standards of production are perhaps not as high as what we require in Europe, have there been any modelling done in terms of the jobs impact of any agreement? The information that I have shared with the committee in response to Mr Ingram's earlier question is the earlier stage of our economic modelling. I am just noticing that my papers here tell me that I should—I wish I had read this, but first—said that I should refer to this as indicative internal analysis. I have now done it slightly in the wrong order, but I do not want to overstate the sophistication of that economic modelling at a very early stage. To perhaps put some of the detail behind those estimates, I think that the expectation would be that sectors such as the food and drink sector would perhaps benefit because some of the restrictions that may exist on imports into the United States, particularly on land products, for example, might assist Scottish producers in that respect. There might be some opportunities within the energy sector where the lifting of restrictions in the United States on exports of crude oil and associated impacts on downstream activity might be beneficial, but that would be one of the areas where we could perhaps be exposed to as much internal impact in Scotland of the opening up of markets as we might gain in external markets. I do not think that that is particularly clear-cut. There may well be opportunities in access to US procurement contracts, and then the other areas might be opportunities in financial services, but financial services are potentially markets that could be accessible by external parties. That is some of the thinking that lies behind that indicative internal analysis that we have undertaken on this question. Can I sum it up? As you are approaching this economic bent or analysis, with some caution as to the impact of a trade agreement, you are not expressing an absolute desire to see such an agreement formed or not? The Government's policy position is that we believe in international trade. We encourage a major part of the Government's economic strategy that we are currently revising. It will have a very big focus on the internationalisation of the company base of Scotland. At that level, the Government is entirely supportive. Our agencies are involved in this process. We evangelise with the company base of Scotland about encouraging companies to be involved in exporting an international business activity. My point about TTIP is that we just have to be careful what we wish for, because until such time as we have clarity and certainty about the provisions within TTIP, there may be just as many challenges for us as there may be opportunities. My view of TTIP as being approached with caution would be a fair way to describe it. We are reverting back to your first answer. We really have to take what is given to us here. Is that correct? We do not have any influence on any decision made by the UK with regard to approving the negotiated agreement or not? I think that in terms of de jure, we will not be a signatory to this agreement. In that respect, we will not have the ability to finally control and determine its outcome. I want to reassure the committee that at ministerial and official level, we are making the strongest possible representations to the United Kingdom Government who will be involved in the process to ensure that there is the widest understanding and acceptance of the interests of Scotland within the UK negotiating position. That is constructive engagement. My officials are actively involved in dialogue with officials from the Department of Business Innovation and Skills. That is a perfectly open, participative conversation in which my officials are setting out the issues that matter to Scotland and encouraging the United Kingdom Government to reflect those issues. That has also been the basis of ministerial contact at the very highest level within the Government. Just with some comments about interaction with people such as Mr Boyd from the S2C, he has very real concerns about the possible impact on inequality in Scotland from some adverse impacts of such trade agreements. Obviously, I appreciate that the Scottish Government is not a signatory, but can you assure us that you will take on board and discuss those concerns with the S2C and others? I have seen a number of comments that Mr Campbell refers to. We have regular dialogue with the S2C on all of those questions, and I certainly would be happy to explore further with the S2C some of those questions. The issue of inequality is central to the Government's agenda. The tackling of inequality was at the centre of the programme for government that the First Minister set out in November. It will be at the heart of the budget that we discussed yesterday in Parliament and it will be at the heart of the Government economic strategy that emerges in due course. I certainly would want to assure the committee that the Government's focus on tackling inequality will be relentless. What we have to consider is what is the context and the circumstances in which we are doing that. If that is exacerbated by the signing of TTIP, what it will mean is that the Government will redouble its efforts to tackle any negative consequences. I would like to move on to the ISDS situation now. As I understand it, there are no current negotiations in relation to ISDS going on. The point of having the 150,000 name consultation was to allow the opportunity of testing public opinion throughout the European Union on that. I think possibly the response has surprised the commission and we are now in the period as I understand it where the four questions which you identified are being discussed further with stakeholders. Obviously there are issues and there has been an assurance that states' right to regulate will not be affected and there are discussions about the format of the arbitral tribunals and openness on that. It has suggested that a lot could be gained from looking at the trade agreement with Canada, which has not yet been ratified. I wanted to know whether the Scottish Government had any particular view on the state of play with the ISDS at the moment and whether the Scottish Government would be in any way involved in any consideration as to the impact on domestic judicial systems, which I think is the third question. I raised that with Mr Hooban. He suggested that Scotland's separate legal system, perhaps I ought to refer to my register of interests at that point, as a member of the Faculty of Advocates, would be engaged. I just wondered if you had any general comments on where we are with ISDS at the moment. My sense—again, I am an observer in this process, so my comments are from that perspective. My sense is that I think that the ISDS element of TTIP is probably retreating because I think that it is just becoming unacceptable. I think that that is quite clear. I was stopped by the European Commission on the 13th of January and said that it would never even consider an agreement that would lower our standards or limit our Government's right to regulate. Now there would EU member states nor the European Parliament. I take from that quite a suggestion that the ISDS argument is now in a very different position to where it was six or twelve months ago. That has been a product of public concern and public pressure. I would signal to the public that this is the moment to continue to apply that pressure to ensure that we get this to the right place. To answer Mr Campbell's fundamental question, I do not see the necessity for a process under the investor state dispute settlement arrangements because I think that that would contradict or undermine the established systems of law within individual jurisdictions. I do not want in any way to see the ability of the Scottish jurisdiction to determine issues in terms of the law of Scotland in this respect. A quick comment on that one, cabinet secretary. I think that maybe even just in the last week, the ISDS argument has shifted a bit further. When the Greek finance minister said that Greece would veto TTIP if the ISDS mechanism stayed within it, I think that they would veto on other areas as well. Just looking at that sort of a harder line that one member state is taking, whether that will be an opportunity for other member states to come in behind that, so you're not just getting the public opinion, you're then getting the geopolitical opinion on that as well? Yes, I don't think that this concern is just held within the Greek Government. I was interested to see comments that were expressed in a joint statement between the Governments of France and Germany asking the commission to examine all the options for modifying the ISDS clause. I get the sense, and I think that it would be really beneficial for the United Kingdom Government to be part of this movement within Europe to express opposition to the ISDS provisions. I think that Mr Campbell raised the impact that they could have on our own domestic jurisdiction, and I want to be absolutely clear with the committee that I don't want to see that happening. It's really just to go back on a question about what kind of work has the Scottish Government or its agencies done to raise awareness about the potential opportunities for SMEs? I'd like to answer that in two respects. One is that we are actively involved through the work of Scottish Enterprise, Hans An's Enterprise and Scottish Development International on encouraging Scottish companies to trade internationally. A major part of the dialogue that goes on between our agencies and the company base of Scotland is to encourage more companies to be exporters. I would love to see a broader range of companies in Scotland participating in international business activity. We're seeing the global connection survey. It's very encouraging about the degree to which that is happening, but I'd like to see more of it. We take forward that work very actively with the company base through all of our existing channels. I notice a fundamental difference in the new start business community in Scotland from when I worked in that sector 25 years ago when Mr Ingram was in a similar area of activity. Small emerging start-up companies at that stage in the late 80s, early 90s were unlikely to think of themselves as international business players, but digital connectivity has completely changed that. My experience of the new start business community today is that those individuals start up their business, they have a smartphone and they think well. Here is my access to the world in my smartphone and they think of themselves almost automatically as international businesses. That's very welcome. I would not in any way want to undermine that encouragement to the SME sector to be actively involved in international business activity. That's the dialogue that takes place with companies to encourage the exporter. I don't think that we can properly prepare the business community for TTIP until we know what TTIP is going to be about. It's a bit of a chicken and egg question. That would determine exactly how best. Notwithstanding our need for clarity on TTIP, we will still continue to support companies through our enterprise networks to be involved in international business activity. I want to mention a couple of comments that you have made before I actually posed my question. You said that the First Minister and the Prime Minister have had discussions on TTIP, which is very encouraging for me because it means that there is a dialogue being established. You go on and I quote when you say in terms of the influence, you say none whatsoever. That disappoints me a little because if the First Minister has been speaking to the Prime Minister, obviously we have some influence, perhaps none whatsoever may be not quite true. I'd have to correct you there, because the question that I answered from Mr Ingram was whether or not we would be a signatory to TTIP. It was before that, but I won't split hairs. I'm certainly quite happy to reaffirm that our dialogue is with the United Kingdom Government and with the Commission and we put that forward as seriously as we possibly can do at the highest level in government, but I think as a matter of fact we will not be a signatory to TTIP. That's another issue, but the point that I wanted to raise with you after these two comments was that the US has disproportionate power in extraditing people from the UK to the US when they need to compared to the UK. I'm wondering with TTIP, are we going to be able to protect our business community better than that, or is it going to be status quo, or are we having any discussions to try and redress that in any way? I think that that gets to the ground that I was dealing with in my answer to Mr Ingram earlier, that nobody should view trade agreements as a one-way street. If somebody else's market is getting opened up for us to go to, then our market is getting opened for somebody else to come to. Mr Malick's observations about the strength and effectiveness of the United States and the disproportionate influence that can be exercised are comments of fact, given the scale of the United States and the strength and power of its economy. I think that we should have eyes wide open about this. I was hoping that you may consider looking at the possibility of trying to narrow that influential gap so that our business people won't feel vulnerable. I think it's important that when we are encouraging business, I mean I'm very pleased with the process and the engagement that we have with the US, and in particular I'm pleased with the growing trade that we do have with them without TTIP. I'm hoping that we will have more business with them, but at the same time I'm also very keen to protect our citizens and their rights. That's a point that I accept entirely, and it's important that we protect our citizens, protect their rights, protect their opportunities and their liberties, and that's an important value that the Government supports. I wonder if I could return to the issue about where the power really lies in relation to TTIP and specifically in providing access or potentially providing access to Scotland's NHS. Some people are certainly saying that it's the evil European Union who can provide access to Scotland's NHS through TTIP, but at a previous committee we heard Ariana Andree and Jelly telling us that it's not through TTIP that the power of the member states to decide whether to provide healthcare services through the market is because EU simply has no power unless the member state confers that power on it. First, does the Scottish Government agree with that, and secondly, does that therefore mean that it's the UK Government that ultimately has power to decide this matter? It's difficult for me to give a precise answer to Mr Coffey's question about what might or might not be the interpretation of the treaty because it's not been agreed and I don't have sight of it. I think that what's important is that I set out what we believe and what we consider to be appropriate in all of this, and what we believe is that there should be nothing arising out of TTIP that restricts the ability of this Parliament and, by extension, the Scottish Government to be able to exercise our democratic right to organise the national health service in whatever fashion we decide democratically to be appropriate for us. There should be nothing in TTIP that compromises that existing democratic right that we have here in Scotland. As I said in my earlier remarks, the simplest and clearest way of doing that is to put that exemption, that exception, absolutely central to the drafting of TTIP so that it's just beyond question. That would be the clearest way of doing that. In the various correspondence that you have mentioned with the UK Government and the Commission, have you got anywhere near those kind of guarantees and reassurances that you are seeking? We certainly, we don't have a guarantee that such an exemption would be there. We've argued for that and I would say that that's met a reasonably sympathetic welcome within the UK Government but I don't know where we've reached on the, we will reach on the final deal. Do you have any negotiation of that point? Ultimately, if the UK Government did decide to go down this route and support this provision within TTIP and by that I mean actually providing access to UK NHS services from the United States, will that have a consequential impact on Scotland by default if they made such an agreement? That's a point that we have to be very careful about and that's why I advanced the argument to the convener earlier of the double lock that we actually have a situation where the particular rights and responsibilities that are enshrined in the devolved settlement are taken into account in the position that is reflected by the United Kingdom Government. Ultimately, those questions will only be answered by any final agreement that is reached but I do think that making sure that that issue is resolved in a fashion that gives us the maximum protection for our national health service and the maximum protection will be delivered by exempting national health service from the scope of this agreement. It would be the clearest way of enabling that to be the case. I suppose that the UK Government were to negotiate that deal and think that it was perhaps saving in terms of its own spend on the NHS, say £10 billion. Would that not have an automatic consequential effect on a budgetary settlement for Scotland or would we still be expecting to receive the same amount? The way that Barnett formula operates is that if expenditure in England on the health service rises by £10, expenditure in Scotland rises by one. If expenditure in England falls by £10, it falls by £1 in Scotland in terms of the application of the Barnett consequentials. The scenario that Mr Coffey paints of a rising amount of contribution to the health service budget in England coming from non-public sources resulting in a decline in public spending on the health service in England will have an effect on the Scottish budget. I wonder if the cabinet secretary really wants to say anything generally about the impact of TTIP on regulatory standards. Some of what we had heard from representatives of the business community, a lot of that evidence was focused that the impact on regulation might be of greater significance than reduction in tariffs. Regulation is in place to deliver good and positive outcomes in a number of different respects. If an argument is to be advanced for the removal of regulation, it has to be on a sound basis. The Government has taken away different aspects of regulation at different times where it has been justifiable to do so. For example, if there was to be any erosion of some of the quality of food standards that were required by TTIP, people would be understandably horrified. Given the journey that we have been through as a country about the quality of food and the farming interests that I represent, who excel in the quality of produce that they generate, often are saying to me, where is the level of playing field that we operate to this particular level of regulation within Scotland in the care and wellbeing of livestock? When we can present this product in a supermarket and there's one presented next door to it, which has come from a lesser regulated scenario, and I've got every sympathy with my farming constituents that put that point to me, every sympathy with them. Your regulation has its purpose because it assures us on a whole host of areas where our confidence has been weakened by poor experiences, and we all can think of examples where that's the case. In no way would I want to see TTIP in any way undermining the ability of us to assure our citizens that we have proper and effective regulation in place. Jamie, do you want to ask a specific question about a specific food stuff? I agree with what you said. Just on the food and drink thing, which is so important to Scotland, the cabinet secretary, I mean businesses like ScotSlam and Storn Away Black Pudding and those sort of things which may not seem world-shattering important, but they are very important to certain areas of Scotland. Can there be a sort of guarantee given that TTIP will not adversely affect those products? I think that it would be a very real mistake if TTIP was to reduce regulatory assurance around food safety standards. That would just open up another concern about TTIP if that was to be the case. I would be very anxious to ensure that the ability of individual jurisdictions to take forward the proper approach on food safety was assured. Protect Storn Away Black Pudding, Jamie. Cabinet secretary, we have exhausted our questions for you this morning. Thank you very much for coming along. You will understand that our committee inquiry is continuing. I have to say to you that we have had a huge interest via social media in this topic with people offering questions and some of the questions that came along today came from some of those sources. A real 21st century committee in Parliament in operation. We are looking forward to the evidence from Lord Livingston, which I think will hopefully fill some of the gaps that we have identified through your evidence and the evidence that we have taken thus far. Thank you very much for informing us this morning. We look forward to seeing you back at committee another time. I am going to suspend now and we are going to go into private to deal with agenda item 5.