Good morning and welcome to the sixth meeting in 2018 of the Finance and Constitution Committee. Can I ask colleagues and others around to make sure they do put their phones into at least a silent mode that they don't into freeway proceedings? The first item of agenda this morning is to decide to take items 3 and 4 in private. Are members agreed? We are agreed. The second item of agenda is to take evidence on the UK trade bill and the associated Scottish Government legislative consent memorandum, and we're joined for this session by Scottish Government officials Graham Fisher from the legal directorate, Luke McBratney from the Constitution and UK Relations division, and Stephen Saddler from the trade policy team. I warmly welcome our witnesses to the session this morning. Mr Saddler, I understand that you want to make a short opening statement. Please feel free to do so. Thank you. The UK Government has described the main purpose of the bill as being to provide the key measures required to build a future trade policy for the UK once it leaves the EU, and the bill is in three parts. Parts 2 and 3 of the bill fall within reserved areas. Part 1 is relevant to devolved matters, and, along with schedules 1 to 3, is covered in some detail in the Government's legislative consent memorandum. Very briefly, clause 1 provides powers for both Scottish and UK ministers to make regulations to implement the Government procurement agreement. Clause 2 provides powers for both UK and Scottish ministers within devolved competence to make regulations to implement qualifying international agreements. Schedules 1 to 3 of the bill establish and then constrain devolved competence for the purposes of the exercise of those powers. Along similar lines to the approach taken to Scottish ministers' powers in the EU withdrawal bill, the powers in the trade bill are designed to operate alongside the powers in the EU withdrawal bill. The UK Government has said that it expects that, in most cases, the implementation of any obligations within existing international trade agreements can be dealt with through the EU bill. There will be certain circumstances where that might not be possible and the provisions set out in clause 2 of the trade bill are intended to bridge that gap. The LCM made clear that, if the UK is to leave the EU, then the Scottish Government agrees the need for provisions that seek to maintain continuity in trading relationships and ensure continued access to Government procurement markets. Such provisions, including those in the trade bill, will provide some continuity for businesses, employees and consumers. The LCM also made clear that the Scottish Government welcomes the powers conferred on ministers in the trade bill. However, the Government cannot recommend to Parliament at this stage that it gives consent to the bill that is currently drafted and that the Welsh Government is taking a similar position. The reasons for the Government position on this bill were set out in the LCM and they are consistent with the approach taken in response to the ways in which powers are confirmed on devolved administrations in the EU bill. The Scottish and Welsh Governments published a number of draft amendments to the trade bill on 18 January. Those amendments were tabled at Westminster and debated at community stage of the trade bill, although none were passed. We have had discussions with UK Government officials in the Department for International Trade before and since the amendments were debated, and I would expect those discussions to continue. The Secretary of State for International Trade has subsequently written to Scottish and Welsh ministers, acknowledging the links between discussions on possible amendments to the EU withdrawal bill and the trade bill. Dr Fox confirmed that the UK Government would want to reflect the outcome of those discussions by bringing forward changes to the EU bill and that he would want to adopt this approach on the trade bill. Convener, it might not be possible to identify which trade agreements may need to be implemented through the provisions of the trade bill until near exit day, which might help if I conclude by giving some brief examples. For organic products, EU regulations currently set out a list of third countries whose standards are treated as being equivalent to the EU's, making important arrangements simpler. Those equivalent arrangements will be incorporated in domestic law by the EU withdrawal bill, but trade agreements might include requirements of their own for what is to be treated as equivalent. The EU's existing trade agreements with third countries will already be reflected in EU regulations, but if anything changes when the UK develops its own trade agreements with those third countries, there will be a need to bring legislation on organic standards, for example, into alignment. Similarly, some trade agreements, such as the Canadian deal, include provisions on mutual recognition of professional qualifications. While the EU law will currently be in line with those agreements, if anything changes when the UK develops its own trade agreements, there will be a need to bring UK law into line. In conclusion, the closer that any UK third country agreements are to the existing EU third country agreements, the less likely it is that the power in this bill will need to be used. We understand that the UK Government has not yet identified any area where they will definitely or we will have to use the power. The power is there as a backup to avoid a situation where so-called grandfathered trade agreements cannot be wrought into force because domestic law cannot be updated. Thank you. Okay, thanks, Mr Saddler. That would be a good explanation of some of the areas. I just try to bring it a bit closer to home in my own head about my own constituency, for instance. If I was a sheep farmer in Cullin and there was a trade deal around agriculture being negotiated, currently that sheep farm would obviously, in terms of the devolved responsibilities that would have the Scottish Government looking after the devolved elements of that in the future under the trade deal, any particular trade deal that might adjust costs or introduce new regulations or bring in any potential barriers, if the EU withdrawal bill stays as it is and therefore there is no change to the trade bill, there would be no locus in that for the Scottish Government because the responsibility for that would all lay at Westminster. Would that be something that the Scottish Government would find acceptable? First of all, that is the correct assumption, I believe. I do not think that the Government would find that acceptable. That is why the Government suggested amendments to the trade bill, which reflects overall changes to the EU withdrawal bill. Otherwise, we will be in the position where trade agreements can be made and then regulations are made in devolved areas with the constraints put on the Scottish and Welsh ministers by the bill as present. I am just trying to find examples of where we can bring this alive for the people in Scotland to understand the challenges that the UK, the Scottish Government, will find the bill that currently stands unacceptable. To set this in context, would you like to begin a discussion around where this fits in international perspective? Thank you, convener. Good morning. Am I right and understanding that this bill relates only to international trade? Yes. This bill relates only to international trade. I assume that this is a relatively easy question, but just for the avoidance of doubt, are we all agreed that international relations, including treaty making, including the making of free trade agreements, that all of those are in the United Kingdom constitution reserved to Westminster? International trade, as you say, is reserved, but the implementation of some of those aspects is a devolved matter. I think that the UK Government has acknowledged that in trade white paper and explanatory notes to the trade bill and in subsequent discussions at the official and ministerial level. Yes, absolutely. However, as a matter of constitutional law, international relations, treaty making and international trade are reserved in full to the Westminster Parliament and are not devolved to this Parliament. That is the Scottish Government's understanding as well as mine. Regulation of international trade, as it appears in schedule 5 to Scotland Act, is of course subject to the exception on observing and implementing international obligations. Okay, thank you. That is helpful. Can I ensure also that we are in agreement that there is no legal requirement anywhere in UK law, including under the Constitutional Reform and Governance Act, or any other provision of statute for the United Kingdom Government to consult with devolved administrations or legislatures on treaty making? Just to say that absolutely, it is the concord arrangements that require the binding in honour only, but it is those that require the UK Government to consult with devolved administrations where they are interested. We are in agreement that there is no legal requirement in the United Kingdom law for the United Kingdom Government to consult with devolved administrations about treaty making, including a free trade agreement. There is certainly no direct legal requirement of things like legitimate expectation. So this conversation is a conversation that is entirely about matters which, as far as the UK constitutional law is concerned, are reserved to Westminster. Certainly subject to that point about observing and implementing international obligations. That is really helpful, thank you. That is the legal background, but underneath that legal background, or if you want to turn it the other way around, on top of that legal background sits a whole lot of political agreements, concordats, memorandums of understanding, call them what you will. The United Kingdom Government has, as I understand it, undertaken to co-operate with the Scottish Government and, indeed, with other devolved administrations in the UK on negotiating and implementing treaties in general, and international trade treaties in particular. Is that correct? We have had several commitments or undertakings, as you described, and, in terms of the trade bill, for example, the UK Government published a white paper on trade back in October. There were commitments in there around consulting devolved administrations. There were also further commitments in the UK Government's response to the consultation responses, which I think was published in the first week of January. That report, scattered through it, had a number of high-level commitments talking about the need to have a trade policy that reflected the needs of the whole of the United Kingdom, and therefore consulting with devolved legislatures, devolved administrations and a wider group. Does the Scottish Government share my view that those commitments are commitments that we should welcome? We should certainly welcome the commitments. Yes, good. I certainly welcome them, but we understand that they are political commitments and not legal requirements. Yes. Thank you very much, that is very helpful. Ivan. Thank you. Thank you for coming on to talk to us this morning. It was really just to get your perspective on how you see the Scottish Government's specific role as each trade negotiations move forward, the UK Government negotiating with EU and third countries, and how would that work? How much of a role would there be the envisage and how would it manifest itself? Given the commitments that we have just been talking about that have been made, we would certainly hope that there is full and timely involvement of Scottish Government and other devolved administrations. That particular bill is just talking about a particular set of agreements that are already in place and rolling them forward, making them appropriate for the UK as an independent member and not a member of the EU. Again, the UK Government has made express commitments, which we look forward to working with them to put into practice about negotiating and involving devolved administrations in future trade deals. At the moment, I would say that there is not a huge amount of consultation going on. The UK Government might say that it is not in a position to have many of these discussions yet, but we would certainly look forward to it in the light of the commitments that they have given in many places publicly in writing and face-to-face meetings. At the moment, I want to clarify what we are talking about. The agreements that would replace the EU's agreements with third countries and how the UK would fit into that structure rather than the UK getting out and creating brand new agreements that will come later. Obviously, the clock is ticking and what you are saying is that, at this stage, all that you have got is a commitment that the Scottish Government will be involved as and when the time is right. Yes. We have had some high-level discussions at official level about what might be happening in a very general timetable, but we have not got into any detailed discussions yet. So, is the shape of how that would look becoming clearer or the timescale when we may start to have more substantive conversations about that being done? I would hope that it will come clear as soon, to be honest. It is not particularly clear at the moment, to be fair, but the discussions are continuing between officials in the Scottish Government and the UK Government. Okay, but at some point, we are going to run out of time. There is a deadline on the first, yes. Issues around framework in this, in these areas? Yes, it is similar ground to what Ivan McKee has just covered. It is obviously this idea that you need to have effective mechanisms in place for consultation between the UK Government and the devolved administrations. I guess, in order to provide, I suppose, quality of negotiations and outcome, more legitimacy to the outcomes as well, which I am sure the Scottish Government would agree with. So, at one end, maybe you have mechanisms at the other end, maybe you have more obligations. So, I am not sure that you can answer this question, but obviously in Canada, they have a particular way of organising things. They have created a joint committee on trade, which I suppose could be replicated in the UK, like a JMC, but for trade, meeting up several times a year and so on. That would be at one end, maybe for active participation, and then at the other end, maybe you would just have access to texts or sharing of information in a timely fashion. Does the Scottish Government have any developed proposals on what type of mechanisms, structures, frameworks that they would like to see or is it too early to say that? I think that it is at an early stage. Although, having said that, we have had discussions at official level and between ministers, we have said that we welcome the commitments that you are making to involve us more in the future trade deals, how is that going to work? We have made a number of suggestions, and, as you say, ranging from a formal JMC for trade through to more of a commitment to keep us regularly informed with the text or, potentially even before, negotiation briefs and all of that. How has that been received? Are you getting any indication of where the UK Government might sit between those two ends of the spectrum? Not specifically about where they would sit. I think that they would welcome continuing dialogue, as they say, about how we take this forward. It is also fair to say that they are having similar discussions with the Welsh Government, whose position the Welsh Government published a paper last week from Henry on trade, where it specifically recommended that there should be a JMC on trade. Another option would be that the Scottish Government could spend some effort providing analysis and impact assessments for areas that are specifically of interest to Scotland, so that they could feed through to the UK Government for its use during negotiation. Is that something that the Scottish Government is working on at the moment? It is. The document that Scotland is placing in Europe was published recently. It has some high-level stuff, but it is something that we are continuing to work on. Not just in government, but looking at information that might be available, for example, through Scottish Enterprise, or through a range of people who are already undertaking those assessments. I think that, specifically looking at individual sectors, we are looking to try to pull that together to see the kinds of messages that are talking about the impact, possibly the impact, of Brexit, on sectors or the whole economy. Before we move on to areas to do with the role of Parliament, that is the area that we are going next. I do not quite rightly mention some of the more high-level context stuff that I was raising at the beginning. Currently, all of the trade deals that are negotiated for the United Kingdom are done through the European Union. There are well-set-out mechanisms for that process, including a sign-off eventually in the European Parliament of any particular deal that is made. There are processes available for the Scottish Government to feed into that process currently. Indeed, MEPs could be lobbied directly by their constituents to influence the outcome of those if they wished. What is the Scottish Government's view on what will be lost from the process that we currently have as compared with what would be the process in future? If I can perhaps answer that in a slightly different way, I think that what we would want to do is ensure that the arrangements that are there once the UK leaves the EU are improved on. Within the UK, there is a greater role for devolved administrations in all that. There are existing mechanisms within the UK for UK Governments and devolved administrations to talk, to consult, to discuss issues on European matters. I think that we would like to see those enhanced, to be honest, rather than just on a standstill basis. In terms of what is lost, I do not think that we would want to see any particular level of interest or involvement that we have now diminished at all in any way by the UK Government saying, well, we deal with trade now, because there is that. We would need to develop a new system, a new set of arrangements for getting a wider involvement in trade deals, I think. That is something that we are starting to consider, how we might best be placed out and propose to us that we might put forward. Okay. Now, I think that it is about more of a wider issue on the role of Parliament. Patrick, you want to kick that off? Thanks very much. Good morning. Most of the comments and discussions so far have been about the role of the Scottish Government and most of the memorandum talks about the role of Scottish ministers and the Scottish Government. Understandably, I suspect, whoever happened to be in office at any one time would be concerned about the role of Government. There is not a great deal in the memorandum about the role of parliamentary scrutiny. Can I ask what is the Scottish Government's understanding of, first of all, if the trade bill passed in its current form, what level of parliamentary scrutiny would exist obviously here but also at Westminster? Secondly, does the Scottish Government have a view as to the changes that are required in relation to parliamentary scrutiny? What level of parliamentary scrutiny of trade negotiations and trade agreements does the Scottish Government seek to have set out in the legislation? I think that in terms of the trade bill, as it currently is at the moment, the role for the Scottish Parliament would be formally limited to considering the regulations that come forward to implement the trade agreements in devolved areas. As for Westminster, I think that there is an existing process where Westminster, by the UK Parliament, has a role in trade agreements, and that would not be changed by this. It would still be from the 2010 act. In terms of future arrangements, that is something that we are looking at now, and we have a commitment to produce papers in due course on suggestions for more powers in terms of trade. I think that that will look at the role of the Scottish Government and the Scottish Parliament. One of the things that we are looking to do in that paper would be to develop a consensus about ways to identify and protect any particular Scottish interest in trade agreements. I think that there are international precedents, international comparisons, which we could usefully look at to see whether they would work in a Scottish UK context. If I can raise as an example the debate over recent years on the Transatlantic Trade and Investment Partnership, where a great deal of civil society involvement, political debate, scrutiny was brought to bear and it was in many ways European parliamentary scrutiny that actually made sure that some of those arguments carried today. If we are going to be outside of the European Union and without that layer of parliamentary scrutiny at European level, we clearly need to replicate that within the structures of the UK as a multi-jurisdiction country with devolved confidence. Maybe the Scottish Government has not reached a view yet on that, in which case that is fine, but please say so. At what level does the Scottish Government feel that parliamentary scrutiny needs to be brought to bear in approving negotiating mandates, for example, before trade agreements are reached or in signing off trade agreements at a parliamentary level, rather than merely by ministers, whether of one or more than one Government? To start with, the easiest way to say is that the Scottish Government has not reached a firm view on that yet. We are looking at a number of options. As you said, there is a range of potential involvement for parliaments and for devolved administrations, including in our consideration of that. I noticed that the submission from the Trade Justice Scotland coalition put forward a lot of information and suggestions about going forward. Those are the issues among others that we want to consider in forming a view and then bringing that to Parliament and then discussing that. I would say in due course that that is a terrible civil service thing to say, but there are deadlines to all of this. It will have to be sooner rather than later, but not today, I am afraid. Well, thank you. I look forward to the chance to debate that in Parliament if the Government is going to dedicate some time to that. To continue in the theme of scrutiny, Patrick Harvie raised the issue that it does not appear that there is any. When the scrutiny proposals are transparency within this process whatsoever, that has to be a worry for us. I have already heard from the opening questions that the UK Government can basically force through any trade agreement that it likes, whether Scotland Wales or Northern Ireland agrees or not. That is hardly a recipe for mutual co-operation given the circumstances that we are in. What is the Scottish Government trying to do to get some agreement into this mix so that we can work together more co-operatively to get the solutions that we seek? As we have mentioned before, we have had numerous commitments from the UK Government from about last autumn onwards, if not before, to involve the Scottish Government and other devolved Administrations. We are taking that up. We are having discussions at a certain official level in due course. It will be at ministerial level. I think that we are going to take them at their word to say that they want to involve all the devolved nations and wider society. We want to be pushing for discussions in a near future about what that is going to look like, partly for the points that you raised for that level of scrutiny that is important in very wide-ranging trade agreements. Would we be proposing a particular set of arrangements to the UK Government for agreement? I would think that we will do, yes. As I said to Mr Harvey, it is not in due course, but somewhere between due course and today, we will be coming up with some proposals. I love that, I love that. Thank you very much. You had some technical questions that you wanted to raise on these issues, Emma. Thank you, convener. I am in some of the technical issues, because I know that we do not want the UK Government to attempt to reserve powers that are currently devolved, such as in agriculture. I am sure that we have had 40 years of common agricultural policy, and now that has to be detangled. What would be the technical challenges of coming up with a new ag trade bill? There is a range of legislation proposed to deal with the consequences of EU withdrawal and to prepare for EU withdrawal. As the legislative consent memorandum makes clear, the principle tool that we will use is the EU withdrawal bill. The committee is familiar with the Scottish Government's arguments about the clause 11 of that bill and its position that EU competencies in devolved areas should flow directly to the Scottish Parliament on withdrawal. As has been made clear, the trade bill is one of a range of other pieces of legislation, including the sanctions bill, which are directed at a more specific and narrow aspect of this, in this case the continuation of existing EU third country trade agreements. The concern that you have raised about the continuity of Scottish devolved institutions to have influence over devolved policy areas is one for the EU withdrawal bill, rather than this trade bill, which has a much narrower focus. I will come to Neil at the end of the question. I wanted to ask Mr Saddle if he could clarify something that he said in his opening remarks. He said in his opening remarks very carefully that the Welsh Government position on the trade bill is similar to the Scottish Government position. The similar two implies that it is not identical with. We know that the Scottish Government and the Welsh Government have been working closely together in tabling amendments and so on and so forth with regard to the withdrawal bill. If I caught you right, Mr Saddle, there were joint Welsh and Scottish Government amendments tabled for this bill at committee stages in the House of Commons. Forgive you if I have got that wrong. However, how is the Welsh Government position with regard to the trade bill different from the Scottish Government position? Sorry, I must have misread my... What I have said here is that the Welsh Government is taking the same position. I apologise if I said it similar. I may be that I got that wrong. No, it is this. Thank you very much. Can I just make the absolute sure before we move on to the last issue that we want to cover today in Neil with customs union? In Scotland's place in Europe in 2016, the Scottish Government made plane that it wanted to take part in any trade negotiations that impacted on devolved competencies. I just want to make sure that is still the position of the Scottish Government. Yes. I guess... On you go. No, I was just going to say. It is an overarching view of the Scottish Government that we should be involved in things that affect Scotland. In trade deals, there will be times... Sometimes it might be difficult to draw a very clear line between devolved and reserved issues in trade deals because there is a reed across in various things. The more that modern trade agreements develop, they are more wide-ranging and they age more into public policy issues, which are more devolved. That is a long way of saying yes again. Yes, but some of the larger areas of these trade agreements often involve things like agriculture, environment, fisheries. Therefore, it is the Government's expectation, I am assuming, in any negotiations in that regard, which impact and devolved competencies that you will be fully involved in? It would be our hope. It would certainly be something that we will be taking forward in discussions with the UK Government about the way forward in developing future trade agreements. Yes, but the trade deal deals with none of that. How about any of that mechanism that can be employed? No, it does not. I think that the UK Government has said that that is for the future. We are saying that we need to be having that discussion quite soon, but it is not in the trade deal. We are basing a lot on faith in that case. That is just a statement. I am not expecting you to respond to that as a civil servant. Neil Custom's Union. I just wanted to ask a question to clarify the Scottish Government's position in relation to the customs union. I understand that the Scottish Government obviously wants to remain part of the European Union and as such a member of the customs union. On leaving the European Union, is it the Scottish Government's position that it should be a member of the customs union as currently exists, or is there an acceptance that there needs to be a new customs union with a new agreement? If and when the UK leaves the EU, we will not be part of the existing customs union, but I think that the Government's view is that we should look to be part of a customs union. James, do you have a question as well? It is separate to customs union. On you go. I think that Neil has finished. That is fine. I just wondered, just in terms of the issue of public procurement, which is obviously a major amount of expenditure that goes through that in terms of trade, what you saw as a potential implication under the trade bill for public procurement rules? I have to start off by saying that I am not an expert in any way, while I am not at all in public procurement rules. My understanding is that the bill, the intention of the UK Government supported by the Scottish Government, is that we would continue to look to be independent members of the agreement on government procurement as a starter. That may well produce some scope, but because we will not be under exactly the same position as we are now, there may be some scope for some changes. Procurement is at least in part a devolved issue at the moment, so I think that we will be looking to see in the context of future discussions around agreement for the UK to be members of this and Scotland as part of that. We will be looking to see if there are any changes, any flexibility that we could introduce. I thank the witnesses for coming along this morning. We just got to just past 11 o'clock and we are a bit ahead of schedule, so it was indicated earlier to committee members that we will take this opportunity now to go into private session to disguise items 3 and 4, but we will return approximately 11.30 am to do with the second panel on the trade bill, so we are currently going into private session. We will now continue to take evidence on the UK trade bill with our next session, featuring a panel of academic experts. I welcome to the meeting this morning Dr Billy Mello Arujo. Have we got a bit of a rate of it? Yeah, just a bad. I won't hold it against you. Even my daughter can't pronounce my name properly, so it's fine. Well, I'm glad somebody's not holding something against me, Eddie. That's great. You're a lecturer, Billy, at the School of Law at the Queen's University in Belfast. We've got Professor Andrew Lang. I think I've got that one right. Chair in international law and global governance at Edinburgh University, Professor Michael Keating, director of the ESRC Centre for Constitutional Change and Professor Sangita Kerana, the Department of Accounting, Finance and Economics at Bournemouth University. First of all, I thank all the witnesses for coming along this morning. Some of you have come a distance to help us out in our deliberations on the trade bill, so I'm very grateful for that. I just want to start with a very simple question at the beginning, though. Ask if you could describe from your own perspectives what you think the impact of the trade bill will be on the devolution powers and what do you consider maybe the implications of free trade agreements that the UK may enter into for devolved competencies such as agriculture and the environment? I don't really mind who kicks that off. Who would like to have a go? Since I spelt your name just about right, Billy, how about you? I would raise three issues with respect to this trade bill and I can go into more detail later on maybe. Those three issues would be first its scope, rather the vagueness of its scope, which could have significant implications in terms of the powers that are given to executive, the executive in terms of implementing these trade agreements. The lack of adequate parliament scrutiny involved in these trade agreements, not just the trade bill which covers trade agreements that are being rolled over, but also it raises questions concerning future trade agreements in a post Brexit scenario. The lack of any role given to devolved authorities in shaping these trade negotiations could be problematic because many of the issues that are covered in these trade agreements relate specifically to devolved matters. Yes, it's very difficult just to talk about that trade bill because it's very narrow in scope and the coverage of international trade seems to be very patchy because there's bits here, bits in the withdrawal bill, bits in another bill. It makes it very difficult to see what the overall picture is. I'll talk about trade agreements generally. We haven't negotiated free trade agreements for about 45 years and in that time a lot of things have changed. Notably, trade deals are much wider in scope now. We have things about product standards, environmental standards, labour standards, social provisions, all kinds of things and they're getting wider all the time. That means that trade is not just about trade, it's about domestic policy. Partly because of that, trade bills encroach on devolved competencies to an extraordinary degree now, but trade itself is still a reserved UK responsibility, so that raises the question of how the devolved nations fit into international trade negotiations and agreements. Thank you very much. We can get into matters of detail, of course, but just a few high-level points just to distinguish the future free trade agreements issue and the existing free trade agreements issue. In terms of future free trade agreements, I agree with my colleagues that they are, to some extent, every deep and comprehensive FDA is a constitutional negotiation and potentially affects constitutional arrangements domestically. I guess that the main point that I wanted to make is that I think that it's reasonable to take a very ambitious view as to what the Scottish Government and the Scottish Parliament, the role that they ought to play in future FDA negotiations. I think that best practice is quite a significant degree of parliamentary involvement in a variety of different federal systems globally. In terms of existing FDAs, I think that the situation is ever so slightly different. I think that there will be some circumstances for existing FDAs where the priorities of flexibility and speed, as long as there is no significant change, might require different arrangements. Okay. Professor. Morning, everyone. Thank you so much. I completely agree with my colleagues that the trade bill is very narrow in scope and it lacks clarity. We clearly need to see a vision coming out as to where we are heading for. Most importantly, from the perspective of the Scottish Government, the first thing that merits attention is what are the consequences of the change that they are proposing. Now, this is something that and how will devolved administration interact on those issues. Second, what measures are being taken to prepare for a transition if we are going to have any because the clock is ticking away. Most importantly and thirdly, what elements would be included in future FDAs that the Scottish Parliament will have a say on or not have a say on? I think that we need more clarity here about that. That is my take on the trade bill. Okay. Can I ask one of you if you want to go at giving us an obvious example of where a trade bill may in future impact on a devolved power, just so that we can bring it alive to the audience who is out there listening to this? Does anyone like to go at that? Is there an obvious example where there might be implications for a devolved settlement in a future trade bill? I will start this off. Procurement is a matter that is with the devolved administration and that is an area where the trade bill is going to have an impact on. I personally do not understand, I cannot comprehend, how the UK is going to go about once it comes out, once it breaks it. Once we have brexit it, what does it mean? Are we going to then follow EU directives? The fact is that the UK has actually transposed EU directives onto its procurement framework. How are they going to disentangle it? What role is the Scottish Parliament going to play there? Are you because for the Scottish Parliament it is really important to start identifying what are the entities that you would want included or excluded, because these are aspects that the Scottish Parliament has to start thinking about and what role, whether you would like to give a special role for the SMEs. So we could discuss this as you go along. I just want to get a general feel for things at the beginning. Michael. Agricultural support, agricultural regulation, environmental policy potentially. Okay. So one could look to the extent that future FTAs involve investment chapters. I think there are lots of examples of sub-national authorities in a variety of countries being challenged for anything from permits, construction permits, regulatory permits for land use of all different kinds. These sorts of things affect foreign investments in a variety of ways and one is always open to the challenge of discrimination or lack of fair and equitable treatment and so on. Okay. Okay. If you look at classic trade policy, if you look at the EU Canada seater, for example, it has negotiated tariffs, low tariffs, tariff rate quotas on issues like pork, seafood, beef, veal. I don't know to what extent they're relevant to Scotland in particular, but I suspect beef, for example, would be something important. If you look at the EU South Korea trade agreement, negotiations on tariff rate quotas for dairy products, all of that is subject to renegotiation and depending on what the outcome of the negotiation is, you could have more competition from Canada, from South Korea, you'll provide more market access, so they will have an impact. Do you think that the trade bill, although it's a narrow bill, should be expanded to explain about how the devolved government should be involved in future? I think that that should be there somewhere. I don't know whether this trade bill is the right place to do it because it is very narrow and focused, but there's been a lot of talk about frameworks generally about the relationship of foreign trade to domestic policy and how that should be dealt with, but it's been dealt with in a very fragmented way. We don't have any clear principles and we don't have any clear doctrine as to the role that the devolved nation should play in making trade policy. Now, a lot of European policy is going to become foreign trade policy now and we have a mechanism for the involvement of the devolved in making European policy, but we don't have a similar mechanism for foreign trade deals. I want to pick up directly on that point that Professor Keating was just sharing with us. What we're trying to understand as far as I understand it is the extent to which this committee should give recommendations to Parliament about whether to give consent to this bill, which is going through Westminster. That legislative consent process applies not to all Westminster legislation, but only to Westminster legislation that pertains to devolved as opposed to reserved matters. So can we just make sure that we've got a clear understanding about how that legal and constitutional landscape looks before we go any further? As I understand it, this is a bill that is uniquely concerned with international trade. Is that correct? Yes, it is correct. The record won't pick up the fact that you're nodding, so if you could say yes, it would be helpful. I would say yes with the caveat, which is it says that the trade bill concerns international trade agreements and includes agreements which mainly relate to trade. There's no definition as what mainly relates to trade, so you will see in the written evidence provided by Professor Lyon that that could deal with environmental protection agreements, so it's quite wide in its code, so it depends what you define as an international trade agreement. The opening line of the long title to the bill is that this is a bill to make provision about the implementation of international trade agreements. That's correct, isn't it? Yes. Do all the members of the panel agree that international relations, including treaty making, including the making of free trade agreements, are matters that are reserved to the United Kingdom in the United Kingdom's constitutional order? Do all the members of the panel agree that there is no legal requirement in the United Kingdom's law, including under the Constitutional Reform and Governance Act, or any other provision of statute for the United Kingdom Government to consult with devolved administrations about treaties? Yes, that is absolutely true, but on the other hand we have an emerging set of conventions around legislative consent for matters that impinge upon devolved responsibilities. That's the tricky area, and that area is being extended. Is that boundary really that we ought to be thinking of? I fully accept that that's a tricky area, but I just want to understand how the tricky area relates to the constitutional and legal underpinnings of the United Kingdom Constitution, because there has been a lot of talk with regard to the withdrawal bill that certain provisions of the withdrawal bill do not respect the devolution settlement. I just want to make sure that we are respecting the devolution settlement, and the devolution settlement says that international relations, including international trade, are matters that are reserved to the United Kingdom Parliament. The question that I wanted to explore a little bit more with Michael Keating, because he raised it in his evidence a few moments ago, is clearly that the United Kingdom is going to want to negotiate a number of free trade agreements with other countries around the world that are multi-government jurisdictions, whether federal formally or not, including the United States, Canada, Australia, India and others. What can Michael Keating and other members of the panel tell us about how those multi-layered jurisdictions—federal countries, if you want to use that phrase—navigate the relationship between what is done at the federal level, which in our case would be the UK level, and what is done at the sub-state level, which would be in our case here? Well, there are two obvious cases for that, one of which is in Belgium, which of course is part of the EU, but so-called mixed treaties, like the Canada deal, require national ratification as well. We know that required ratification by the regions, as well as the Belgium national government, and almost came unstuck there. That is potentially a time bomb in Belgium, but they always managed to get around it. The other one is the case of Canada, where the issue has never been resolved in the constitution. In the CETA agreement, it was agreed that the provinces would be involved in that, because when the CETA came to be ratified in Canada, there would be a constitutional problem about the federal government ratifying provisions that impinged on provincial jurisdictions. It does arise anywhere, but I do not have an example of a country in which it has actually been resolved. During that question session, Professor Keaton, there was a but that was coming through in terms of the legislative consent mechanism process. Will you just expand, or anybody else would like to expand on that? That is for the primary purpose of this committee, is it, obviously, but for this bill it is in that area. Will you just expand your concerns in that regard, please? Well, the UK Government has already said that this bill will require legislative consent for a certain of its provisions. That is consistent with our understanding of the civil convention. We do not know what is going to happen with the withdrawal bill, which is the really big test of that. The UK Government is suggesting that it may amend the withdrawal bill so as to take notice of, account of, the reservations of the Scottish and Welsh Governments who are not recommending consent to their respective legislatures. We know that, as the Supreme Court has told us, that that is not enforceable as a matter of law. We know that, but the question is, is that part of our understanding of the Constitution? I would answer that, yes, it probably is, but how those are resolved is something, again, that has never been tested. Perhaps I can just say a few quick words in response to the intervention. Thank you very much. In relation to consent and in relation to other countries, very quickly, just to repeat what I think is already in the written evidence before you, the three key issues in relation to consent are the level of scrutiny where there are significant changes to existing agreements. I think that is a serious issue. The second is perhaps less serious. It depends a little bit on how exactly it is implemented, but this question of ambiguity has to the scope, so I think that is an issue. Then the third has to do with the limitations on the devolved powers which are in the schedule, and that I think is well understood, so we do not need to go into that. On the question of other countries, I would say just a few points. One is that, of course, much depends on the domestic constitutional arrangements in our countries, so all of the different comparative countries have a slightly different domestic constitutional arrangements, but I think it is fair to say that in all of these countries that we are looking at, there is an increasing recognition that even where there is no formal role for sub-national parliaments or sub-national authorities in approving or have no veto powers and so on, it is actually in the interests of the national government to have full consent, to have full consultation and so on. I think there is a recognition of that, and also it is in the interests of the FTA partner country, so one will seek pressure for that. Also, I think one of the broad lessons to be learnt from these examples is that it can be very important for there to be at least one formal choke point, as it were, whether it requires formal acceptance by a sub-national parliament, whether there is some formal requirement for a sub-national parliament in the setting of the mandate or at least one point in the process where a sub-national parliament has a formal power. I think that that can be quite important. Last question before we go to Ivan. I just want some of this stuff on the record. Previously, in our interim report as a committee, we said that we could not support a legislative consent as far as the EU withdrawal bill was concerned, unless it was amended or changed in some way to deal with the concerns that we had. If that bill was not to be amended, and it obviously has an impact then on this bill, what would your review be, what would you say to this committee if the EU withdrawal bill was not amended in the way that we expected it to be amended, what position we should take as far as this particular legislative consent on the trade bill is concerned? I think that it raises many of the same issues, and so the position would be the same. I tell the people nodding, but if it is the same for Adam, can we just make sure that people say something so that it is on the record? We are clear where we are. Thank you, convener, and thank you, panel, for coming along to talk to us this morning. Just following up on the approach that Adam Tomkins took earlier, and I suppose that coming at it from a different direction, would you all agree that the way that the devolution settlement is structured, it states clearly that what is not reserved is devolved? Again, if you can say yes, it would be helpful. Yes, but it also says that none of this affects the competencies of the UK Parliament, so that the UK Parliament can ultimately have the last word, notwithstanding that question. Sure, but the devolution settlement states clearly that what is not reserved is devolved, and clearly there is a list of things that are not reserved, including agriculture, fisheries, health, education, transport, et cetera, which by definition therefore are devolved. Can you talk us through how you may see, and some of this has been referred to in some of the papers, that free trade agreements could impact some of those devolved areas? You might want to reference it in our national examples, and I think that you mentioned Professor Lyon situations where devolved parliaments have been challenged because of requirements that were in free trade agreements, et cetera, or where it may constrain the ability of the devolved administrations to operate in devolved areas. Just in the area of procurement, for example, if you read the trade bill in conjunction with the EU withdrawal bill, one of the advantages that you have from leaving the EU is that you have an additional level of regulatory flexibility in setting your procurement system, because presumably you will no longer be required to comply with the regulatory framework, and to the extended UK successful in exceeding to the GPA, the standards, the regulatory framework provided by the GPA is much lower than that of the EU. So that gives you some wiggle room in terms of how to craft a Scotland procurement system. But with the restrictions that are currently in the withdrawal bill and the trade bill, as I've read it, that would mean that no modifications would be possible on the retained EU law unless it's done by Westminster. So what is a devolved competence would essentially be taken up by Westminster, meaning that that benefit, that regulatory flexibility that you would gain from leaving the EU is lost and taken up by Westminster instead. So that's one area where I can see. So perhaps, so I can say just two quick things. So one is that there are certain chapters in FTAs which are, which have headings which are directly related devolved powers, so there's agriculture and so on. But there's also, and this is really the point that I wanted to make, general principles within FTAs such as nondiscrimination, such as the requirement to accord foreign investors fair and equitable treatment and so on in investment chapters, which in principle apply to all forms of regulation at whatever level and so don't exclude any particular area of regulation and therefore by definition include devolved. And it's those sorts of general principles where you see in particular cases coming in respect of actions by sub-national authorities in investment cases but also to a lesser extent in trade cases. Okay. I mean, to take an example, if we look to the health service, for example, where there's a different approach to the involvement of excellent investment perhaps, and the rest of the UK to what there is in Scotland, you could envisage, there could be a situation where a feature agreement signed at a UK level that enables foreign investment to come in to the health arena that could therefore be imposed in Scotland because it was agreed at a UK level. That's possible of universities and other public services as well. So, following on from that and kind of changing time a bit, what kind of role should the Scottish Government have in your view in negotiating trade deals now and in the future? So, I mean, this is, for all of us, I mentioned, but... Feel free under the menu. So, I think we should distinguish between a number of different functions. So, one would be analysis, which I mentioned in my written evidence. It's important even though it's soft. I think it's important and I think there's, to some extent, an urgent role in building up capacity for that at the Scottish level. Second is the question of the negotiating mandate. I think careful thought needs to be given to the respective roles of the UK, Westminster, and also the devolved authorities in setting negotiating mandates. I think that's very important. The third is oversight through the negotiations... Actually, I asked, maybe there are five. The third is consultation in terms of public consultation at the Scottish level. I think that's important to establish frameworks, which are independent of the UK ones. The fourth has to do with consultations, intergovernmental consultations, in setting up a framework for that. And the fifth has to do with ratification slash implementation, which are different processes, but which are at the back end. And whether or not a form... What kind of formal role, if any, ought to be given to the Scottish Parliament and devolved authorities generally? And each of those headings, we can discuss specific proposals and so on, but I think looking ahead, those are the five key issues that one needs to think about in terms of a future framework. I think, as I said before, I think in my view existing arrangements, there may be a good case for a somewhat streamlined process actually in relation to a number of existing FTAs. And so I think one might have a set of different recommendations for that. And so perhaps just the final point I would make is in response to an earlier question. Actually I think there probably is a good reason to separate out in different bills or in different venues a treatment of existing FTAs from a future FTAs. And so it may not be the best idea to combine them in a single bill. To some extent, they're quite different. And we also want to pick up on that. Are you quite content with it? Well, the provisions for Westminster scrutiny and ratification of trade deals are really inadequate, problematic as well. So this Parliament would not be alone in criticising that and asking for those to be opened up to much greater scrutiny. We're going to come back in a bit more detail that Patrick Harvie wants to do in that area. But first of all, Ash Denham, do you still got some questions around the framework of how this is all going to be dealt with? Yeah, I'm quite interested in the idea of intergovernmental relations and how those might be developed in order to maybe underpin or maybe facilitate this somewhere, this sliding scale between consultation or full involvement of the devolved administrations in on-going trade negotiations. So I mean coming through in the papers and I mean this committee has taken evidence on this before. We know that UK IGR is considered to be quite inadequate currently. But internationally, there's a number of useful templates that could be potentially of interest to us if we wanted to develop that. Obviously, this is open to the full panel, but particularly Dr Melo Arigio, you mentioned specifically the Canadian example. Can you give us a kind of an overview of the facets of that system as it regards to trade negotiations? So it's usually held up the Canadian system as the most effective and successful form of intergovernmental cooperation in the area of trade. The way it works is that at the very top you have a joint committee, which is known as the Sea Trade Committee, and it's composed of high-level trade representatives from more of the Canadian federal government and provincial governments. They will meet on a quarterly basis and discuss any issues that arise with respect to trade negotiations. So that's any issues from the decision to actually initiate trade negotiations to any problematic areas of the negotiations as they're ongoing. The committee itself is supported by subcommittees, which deal with the technical issues, as long as those technical issues relate to specific areas of provincial competencies. So agriculture and procurement, for example. So they'll deal with the technical boring aspects of trade policy, and then if there's anything more controversial, it's flagged up to the Sea Trade Committee. In addition to that, you also have a very intense level of transparency in how they carry out these trade agreements. So the federal government will regularly inform the provinces and regularly submit negotiating draft texts so that the provinces can review them and then submit their observations, put forward their interests, their suggested amendments. As you've heard, trade representatives from provinces have, in some cases, been allowed to actively engage in trade negotiations. So the most recent example was the EU-Canada Sita, but that was actually at the requested view, because the EU had previously been burned in trade negotiations with Canada, where they said, look, we can't make liberalisation commitments in certain areas, in particular procurement, because of the provinces. So they wanted to take the middle man out of the way and deal directly with the provincial representatives, and it worked very well. The deal got done anyway. It worked so well that Canada tried to replicate that system in the Trans-Pacific Partnership, but there the US rejected it. So even if you have a system in place, which allows for representation of subnational entities like evolved authorities, you're still relying on the goodwill of your counterparts. So that's something to bear in mind. But what this system has done is it's allowed the federal governments and the provincial governments to carry out, to negotiate trade agreements in a relationship with mutual trust and cooperation. But perhaps most importantly, it's forced to the provincial governments to take ownership of Canada's trade policy, to take ownership of these trade agreements, because they're actively involved in the process. They also have to sell the final outcome of that process to their constituents. So this whole process, rather than being an irritant, an obstacle to trade negotiations, it's ended up enhancing the cryptic legitimacy of those agreements. But one thing, and I think this is something that's been touched upon by the other members of the panel, we have to understand that the Canadian system works in Canada because of very specific political and constitutional factors that are unique to Canada, and which will not be easily replicated here in the United Kingdom. So in Canada, you have a very strong federal system where power is diffused, provinces in one of the unique features of the Canadian constitutional system is that provinces have the exclusive competence to implement international obligations. So say Canada negotiates a trade agreement which relates to procurement, which is a provisional competence, as they tend to do. The provinces have in theory the right to refuse to implement those provisions in their territorial jurisdiction. So in Canada, the federal government relies on provincial cooperation to get these trade agreements through the line. So the provinces have a great amount of leverage in these trade negotiations, and that's why you have this high level of cooperation between these two levels of government. That's not necessarily the case here in the UK where power is not diffused, in fact, that legal sovereignty is concentrated at the hands of Westminster. So simply replicating the processes and the institutional framework that you have in Canada here in the UK won't necessarily lead to the same outcomes. You would probably need to go beyond that by making, you know, cooperation legally binding, which I don't think is the case as things currently stand. Just a couple of points about Canada. I agree with everything that Billy has said there. One is that there's a great deal of consensus in Canada about trade policy at the moment. There was not in the 1980s when I lived there. It was very controversial, but now there haven't been. There are provincial interests, but not differences in the principle of free trade. The other is that Canada has a lot of experience in negotiating internal free trade deals, because you don't have trade amongst the provinces, so they recognise this as a problem for a very, very long time. That mechanism has been used to try and get agreement on international free trade deals, taking into account the provincial concerns. I just had three ancillary points, not really about the substance, but just to say firstly that I think there is, that this is actually a moment where having a proactive proposal in the near future would make a big difference. I think it could really set the stage for discussions going forward. Second is I think in addition to considering the actual institutional issues, I think it's really important to build support for the, I think, just generally true idea that it is better to do trade policy this way, and one way of doing that, and this is why I keep coming back to the question of analysis and capacity, one way of doing that is to begin to feed into the process, to show what can be done here, to build that analysis, to feed it in and to show what constructive role can be taken. And then the third point is we can talk forever about the particular institutional arrangements for consultation, but probably the single most important thing to provide the impetus for genuine consultation would be to have a formal role in terms of approval or setting of the negotiating mandate, because once you have some kind of blocking power, then of course, of course the consultations are very, very important. Okay, so you've outlined a couple of things that you think should happen in this UK, particular UK setting, because obviously Billy, you mentioned that the Canadian system wouldn't necessarily be able to be, you know, would work here. Would any other members of the panel like to just outline maybe briefly the key points that they think that should become part of this new IGR system for the UK? Well, I would suggest that there should be a clear mechanism that the Scottish Parliament should propose to Westminster as to how they are going to interact. So it has to be, there has to be, now for this, the Scottish Parliament has, again as I go back to Andrew's point, that capacity has to be built and impact assessments have to be done in greater detail. Now, take the example of procurement. I work on procurement. It's very important, and that is a devolved part. So for procurement, the Scottish Parliament will have to work out, as I have mentioned in my written evidence. You have to go into greater detail, find out what is the precise rule of Scottish firms bidding for projects, bidding for contracts in the EU in third countries, and what are the other firms that are bidding in Scotland. One important point that Scotland will have to think about is how are they going to replicate the EU TED system, the tender database system? Because if the UK wants to join the GPA, then they have to start thinking about a tender's database. And most importantly, you have to start estimating what is the size of the procurement market, what are the barriers that are being faced by Scottish firms in third markets, because these are going to be important not only to negotiate the GPA and also what entities you would like to open up, what you would like to keep aside. So these are important not only for GPA, but to also negotiate with the EU. And most importantly, with third countries, with who you have partnership, with who the UK has partnership through the EU, but also the UK is proposing to have a new deal with them. So capacity is really key. And then this is going to lead to civil society interaction, and this is how I suppose a system of interaction will be set up. So it's essentially a process of evolution we are looking at here. Tell us if you want me to give them comments. I think you mentioned just key points. I mean, I think the one, we can take a number from from the existing model. So one would be a requirement, a legal requirement to update during negotiations to provide information to relevant parliamentary committees and so on. I think that's important. And then some kind of formal structure for regular ongoing meetings around trade policy issues, you know, modelled on existing structures, but backed up somewhere by, when I say a formal role, I think I misspoke in terms of a blocking role. I mean, some kind of formal role, whether it be hard or soft or whatever, some kind of formal role in the process from sitting and negotiating mandate all the way through to gratification and implementation. You said about trade capacity. And just to give you an example in terms of what's happened in Canada is that provinces invested a lot of resources in building trade capacity to the extent that today it's not uncommon for the federal government to seek out their advice on areas that fall within their competence because provinces are in some cases deemed to be more qualified. So, I mean, there's no point in having a corporation system in place if you do not have the intelligence and the capacity to engage in the process. In the absence of the constitutional environment which would give the authorities the power to shape trade negotiations, whether that's through ratification by the Scottish parliament or an executive power to implement the obligations, which is, of course, excluded in this bill, for example, then I would just echo what Professor Lang said, which is you need formal and possibly legally binding structures of cooperation. Neil, we've covered a fair bit around the CETA arrangements and you want to still ask your question at this stage because it's probably the right time to do it, I think. Yeah, I was just, well, we've already touched on Wallonia and the trade agreement there, but just any further reflections on what happened there and the consequences of having similar powers for Scotland, Wales or Northern Ireland. The difference in the UK, of course, is the asymmetrical constitution. We come back to this. There's only devolution in Scotland, Wales and Northern Ireland and it's difficult to imagine each of those having veto powers over trade agreements. That might not be acceptable to Westminster. On the other hand, mere consultation may not be enough either. There's got to be something. The mechanism would probably be based on something like the joint ministerial committee on Europe, which is the only joint ministerial committee that's had a continuous existence because it has something to do. It's very important that committees should have something to do. It's being criticised because otherwise they just fade away. This is what happened to the domestic ministerial committee. People just didn't turn up anymore. This one would have a lot to do, certainly while we're negotiating free trade agreements following Brexit. The question, and I don't have a clear answer to this, is exactly what instruments would the devolves have available if they were ignored? How many levers would they have to make sure they were taken into account? We don't have a federal system like they have in Canada. We have asymmetrical devolution. Something has got to be done to make sure that their views are taken into consideration, at least. I would say that the clock is ticking away and we really do not have the time. These structures have to be put in place ASAP, and we have to start thinking what kind of a transition measure are we going to do to address the problem that's looking at us in the face. A couple of very quick points. I think in relation to the Wellonia case, while the Wellonian Parliament did perform a very important role in that process, I think it has given rise to probably quite reasonable concerns about the credibility of the EU as a negotiating partner, the ability of the EU to negotiate the kinds of agreements that it needs to. I wouldn't rule out a similar arrangement in relation to trade agreements, but there are a range of possible arrangements anywhere between the full veto power to mere consultation. One can imagine a formal requirement that a resolution be passed in devolved authorities expressing approval or disapproval, and then it would be non-barning. It may not have a formal role, but at least it would be required. One can imagine a practice of consent. One can imagine that an agreement would be put before Parliament for debate or whatever. A range of different things which would at least provide serious political checks on the process and opportunities for debate and expressing of review. I know that we have visitors from Wellonia tomorrow, so maybe I can ask them the most question. What were the reasons why they objected to the CETA deal and did they get changes as a result of their veto? My recollection is that they had some concerns about, first of all, commitments made in the agricultural sector. In terms of tariffs on specific products, I currently remember which agricultural goods, where they had clear defensive interests. There are also a lot of concerns raised about the investment protection chapter that is included in the CETA. International investment law is heavily criticised because of the perception that it constrains regulatory autonomy of countries, so they wanted to make substantial amendments, not just in terms of the investment protection chapters, which included obligations on, for example, the fair and equitable treatment standard, but also on the ISDS system, the investor arbitration clause that was included in the CETA. In respect of the investment, the concerns about investment have played an incredibly important and useful role in that process. I guess if one were designing it from scratch, one would hope that those concerns were raised earlier in the process rather than later, so it was a front-loaded consultation. Adam has got a supplementary in this area. Just a very quick supplementary on the really interesting things that you've had to say about Canada and Belgium. Are we to take it that Canada and Belgium are not representative examples of what federal countries generally do? It seems to me that you're presenting them—I just want to make sure that we've understood this correctly—that you're presenting them as outliers. As it were, Canada is the leading example of the involvement of provincial governments and legislatures in the making of international trade agreements that Canada is subject to. Certainly nothing like this happens in the United States, whereas the commerce clause comes in and says that this is an exclusive federal competence. Is that correct? You're not presenting Canada and Belgium as representative of what mature federations do, as a real spectrum. There are other systems where these types of processes exist. If you look at, for example, Germany, they have a federal system where the land has a huge role in shaping foreign policy. I think it all depends on the federal system, so you gave the example of the United States. One reason in principle why states in the United States don't have much of a say is that their interests are formally at least represented by the US Senate. So they have a bicameral system with a house which is there to represent the interests of the states, whether they do or not is another matter. But it's there, which you don't have here in the United Kingdom, of course. So every system is different, and you have to accommodate for those differences. I want to come on to the difference between the role of Governments and Parliament, but before that, one other question occurs to me about the governmental role, particularly in relation to some of what we've discussed already. Whether, in relation to simple copy-and-paste recreation of existing trade agreements, should that come to pass or the creation of new ones, many will include some form of investor state dispute arrangements. If, at some future point, under one of those arrangements, the Scottish Government had taken some action within devolved competence for the protection of public health or the environment, for example, and that became subject to such a dispute, who represents the state in that kind of situation? Is it the devolved administration which has taken actions for its devolved purposes or is it the UK Government which has responsibility for trade and which has signed off the trade agreement? Who is it that represents the state for the reasons that it's taken, the actions that it's taken? I understand the question. In the United Kingdom, devolved authorities do not have an international legal personality. So, if there was an issue concerning non-compliance with an international obligation derived from a treaty, from a trade agreement, then it would be the UK that will be held liable for the failure to comply with that agreement. No, I was just going to say. Those who are leading the case would typically be at the national level with a variety of different mechanisms for consultation and involvement on a case by case basis. In that situation, where the Scottish Government had taken action on devolved competencies to pursue a policy that was not shared by the UK Government in domestic terms, it would potentially be voiceless where it would be challenged in terms of trade agreements. That is why we have been suggesting that it is important to have some kind of a regular interaction between the Scottish Parliament and Westminster so that we do not come to such situations in the future. I would just qualify that. You are talking about a relationship between the Scottish Government and Westminster rather than the Parliament. Let me move on to the role of Parliament. We have had quite a lot of useful discussion about examples where devolved or sub-state entities have a role in whether the approval of the beginnings of a trade negotiation, the remit and mandate for the negotiation process or approval of the final agreement that emerges. To what extent is the norm that those devolved or sub-state powers or decisions are governmental as opposed to parliamentary? I wonder if you could reflect also on the role of European parliamentary scrutiny of trade agreements, which we will then, if we are outside of the European Union, be without. To what extent are those parliamentary scrutiny functions replicated at UK level or perhaps example of other European democracies that are not part of the EU? Do they have parliamentary authority on these matters or are Governments acting in executive functions rather than having parliamentary scrutiny and authority? That is a very long question, sorry. The answer is that it is mostly Governments. Parliaments have a very weak role. One reason given for this is that there is a lot of confidentiality in international trade agreements. I am not convinced by that argument generally, but it is an argument that is used. In fact, all this stuff leaks out anyway. We know what is going on in the Brexit negotiations although it is supposed to be terribly secret. There are some examples in the Nordic countries, particularly in Denmark, in relation to European policy, where a similar or analogous issue arises. There is a very good system for parliamentary scrutiny and parliamentary mandate before going into negotiations. Generally speaking, that tends to be executive dominated. I will reflect on whether it might be possible to ask Spice to give us more information about that Danish example, if that would be helpful in the future. I think that there is also a former committee report, which covered the series as well, because I was a member of that committee, so I am sure that we can get that evidence as well. That would be great. In an earlier discussion, I used the example of TTIP, the Transatlantic Trade and Investment Partnership, and the fact that European parliamentary scrutiny had been a really important part of the movement that was criticising and challenging aspects of TTIP, as it had been proposed. If the trade bill passes in its current form, I asked the Scottish Government officials this and got an official answer, but I wonder if you would reflect on to what extent would that same degree of challenge be possible under the terms of the trade deal, where a trade agreement such as TTIP to be proposed? Would we have any level of ability to use parliamentary scrutiny to do what was done successfully against TTIP? Based on what I have seen so far, I think that the UK Parliament would struggle to exercise that level of scrutiny, because reading at the explanatory note, you would be subject to the Constitutional Reform and Governance Act, which does not go as far as a full-on ratification procedure, which is really the basic standard when it comes to approving trade agreements. So my first concern would be with Westminster, before we even get to the question of whether the devolved parliaments have any say. I don't think that Westminster will have that sort of power that we are doing here. Would this bill be capable of achieving that if changes were made to it? Is the scope there to make changes to this bill to achieve an acceptable level that would mean that parliaments do not struggle to do that? If it is significantly amended, yes. You could add provisions that require full-on ratification. I would say and I would agree with the rest of the panel that ratification on its own currently is no longer adequate fit for purpose to scrutinise free trade agreements which deal with regulatory issues which can be very politically toxic anymore. What you need ideally is a system where parliaments and other stakeholders are involved from the very beginning consulted this corporation so that by the end of the process you get an outcome which hopefully reflects the interests of everyone. That's a very difficult thing to achieve but that's how you maximise the site or buy-in. That's how you maximise the chances of the agreement being ratified and there are lots of different models you could look at to replicate here in the UK, the you being really very much at the forefront of this in terms of transparency and cooperation. Andrew. Just very quickly, in terms of specific changes that might be imagined to the trade bill in terms of giving the UK parliament a role, one would be to modify it so that one would be at the implementation stage to require primary legislation rather than secondary legislation and the second thing would be to modify the Crugger Act in respect of trade agreements requiring UK parliament ratification. Either for and of course this bill is only existing FDAs so either for all existing FDAs that I'm not so sure that that will be a strong case for all of them or some subset defined by reference to the degree of significant substantive change to the existing FDA. Thank you very much. Murdo, I think that you used a question this year as well and I'll come to Willie, I think that you went on. Yeah, just a brief follow-up on some of the things that we've been discussing. You've all talked quite a lot about the need for improved inter-governmental relations. How could that be strengthened by improved inter-parliamentary relations within the UK and are there models from other jurisdictions around the world where that happens well that we could look at? As a good model you faced a lot of criticism concerning the lack of transparency, the lack of involvement of national parliaments and they've reformed the system significantly so that national parliaments are informed and have an opportunity to debate about during the negotiation process, not just at the end of the process. Not all parliaments take up the opportunity but those who have have impacted on trade policy so there are models available, yes. If they also want to reflect on that, they're quite happy to go with that. Right, but the okay, I don't know. Willie? I was just going to pick up on the issue about scrutiny and quite a concern on what we're hearing. I mean, you're saying in several of your submissions that this process isn't for purpose. Are you getting any sense from the UK Government that they are engaging positively proactively to try and resolve these issues? I think that you were saying, Professor, that there was an urgency to get some of this work done at the moment. We're expressing quite a lot of concerns around the table here or some of us are, is there any sense that you're getting that the willingness to engage to resolve these matters? There is urgency because Brexit has got to be done within a short period of time, we still don't know quite what that time actually is, but there's an urgency. The danger then is that the presidents are set through this process will then become part of the constitutional arrangements for future trade deals because other trade deals will be coming down the road, so it's important to get it right at this stage, even though time is very short. Are you getting any sense that there is a two-way engagement process taking place that is going to meet in the middle, perhaps, and get a resolution? Are you not getting that sense? I will know, I'm just an academic. I think that there was at one point an acknowledgement from government that there would be something beyond the trade bill. I suppose that the light-touch approach to parliamentary scrutiny in the trade bill is justified by the fact that these are trade agreements which on the whole have gone through the parliamentary scrutiny process at EU level, although the trade bills also covers trade agreements that have not been ratified, so like the EU candidate CETA, for example, hasn't been ratified and this would be rolled over under this trade bill, so that's an agreement that hasn't gone through the full scrutiny process at EU level and at the national level because it's a mixed agreement, but it would be subject to a very light-touch ratification process under the trade bill, so that would be problematic. There's also the fact that we're not just talking about copy-pasting these agreements, so by the government's own admission there are substantial changes, sometimes new amendments, so when you're talking about issues like investment protection and ISDS, that could be very problematic. I'm not even sure that the light-touch ratification process is justifiable in this trade agreement given that we may be talking about significantly amended trade agreements by the end of the process, but certainly for those trade agreements which would be negotiated by the United Kingdom after it leaves the EU, for example with the likes of the United States and China and India, you would hope that there would be a more tensed level of parliamentary scrutiny and that would require I think another bill at the very least to regulate that. The many different reasons why there might be an inadequate level of consultation between different governmental levels at the moment and to the extent that it's driven by an overwhelming workload and too many issues, then one can imagine that kick-starting consultation would be best done by commissioning some studies, identifying some sensitive issues and then beginning a conversation with your own, with one's own set of issues. Emma, I think that you had one specific area that you wanted to ask a question of Professor Sangeeta Korana on the right. It's actually Professor Lang, but thank you. In your submission you talked about the UK's position in the WTO and referred to EU-wide maximum permitted domestic support for agricultural producers. I'm interested in that. I should probably remind everybody that I'm Cabsack Fergus Ewing's parliamentary liaison officer, but agriculture is interesting because when we took evidence at the European Committee, ag negotiations and trade was always done last because it's really difficult, but I'd be interested to know what do you mean by EU-wide maximum permitted domestic support? So one of the obligations that the European Union has undertaken has been to cap at a certain level its maximum permitted domestic support subsidisation to agricultural producers. That is defined in terms of a quantity which is EU-wide, which is across all of the EU current EU-28 and so in principle that will have to be divided, that will have to be modified for the EU-27 and then the UK will have to have its own maximum cap. So that's an important issue for the UK to define its own maximum cap and then so that will involve establishing a framework for domestic support for agricultural producers domestically and then that will involve serious negotiation amongst the devolved authorities, but I suspect that Westminster will take the view that that will have to be a pan UK position. So that's a very important question. Now let me just say that perhaps the WTO aspects to that are a little less significant than they might appear partly because the European, excuse me, the WTO agreements permit certain kinds of subsidies and as it happens a lot of the European subsidy programmes fall within this particular kind of box of permitted subsidies. So actually the Europeans are not yet even close to their cap because of the way they've structured their subsidy programmes and so there may well be room to split the cap in a way which keeps everyone happy. That's the basic position. I guess as a splitting of funding I mean we have 85 per cent less favoured areas in Scotland compared to the 15 per cent south of the border so there's going to have to be some interesting negotiations to support the rural farmers in our area. I think it's an absolutely I think it's an extremely important issue and one that will be touched upon in terms of negotiation of WTO commitments, but also FTIs going forward. I think that's everybody, am I right in saying that? Well thank you very much, that's been a fascinating session. I think many of us are learning about trade policy, trade negotiations, trade agreements to a degree that we would never have to be involved in before and I certainly have found it very educational from my perspective. So thank you very much for coming along this morning and I will now close this session of the Finance and Constitution Committee.


The One Thing The Rich Embrace Which The Poor Hate The One Thing Poor People Do That Make Them Poorer Over the years, I've been vaccinated by the stories and biographies of the rich and successful people. I've studied and read the live stories of people like John D. Rockefeller, Henry Ford, Steve Jobs, Paul Getty and a lot of rich and successful individuals all over the world and at the time, something became so clear to me. I started seeing that there's one thing the rich love or embrace which most poor people actually hate to hear about and that's what this video is all about. If you're new here, consider subscribing so you won't miss other interesting videos like this. Now here's the thing, all those people we call successful today are actually bearing a wrong appellation because they are not supposed to be called successful.  If you want to confirm this yourself, approach ten successful people and ask them to tell you the story of their life from their youth. One thing you notice in all of them is that they are adventurous, they go out and pursue life, they tried things, made mistakes and failed. You'll notice at a time in their life they overcame the fear of failure and found pleasure in making mistakes. Now go and interview ten poor adults, let them tell you the story of their life and pay attention. Here's one thing you'll notice, the poor leave all their lives trying to avoid anything that will make their life uncomfortable.  Let's use Abraham Lincoln as an example here. He lost a job in 1832 and was defeated for state legislature that same year. He failed in business in 1833, lost his lover in 1835. Lincoln had a nervous breakdown in 1836 and was defeated for speaker in 1838. He was defeated for nomination for Congress in 1843 and lost nomination in 1848. Lincoln was rejected for land officer in 1849 and was defeated for US Senate in 1854. Lincoln was defeated for nomination for vice president in 1856 and again defeated for US Senate in 1858. But by 1860, Abraham Lincoln became the 16th president of the United States. What do you see here? Failure, failure and failure after failures. Then a big success. Check out the life of any successful person and you'll notice the same pattern. Failure, failure and failure then success. The problem with most people is that they are too protective of themselves, they don't want to make mistakes, they don't want to fail, they don't want to get lost. Because of this mindset, they are doing things that are only comfortable or things that have security. That's why getting a job is very popular. That's why many other average lifestyles are popular. Though ease can make your life stress free, it's not the path to riches and success. Think about it this way. When you were a baby, you made hundreds of mistakes in your first year and hundreds of other mistakes between your age one and five. These were the periods you needed to learn how to sit, crawl, walk, talk and write. For each of these, there are hundreds of mistakes to be made and without those mistakes, you simply couldn't master any of these fundamental skills. Without mistakes and falling, you cannot learn how to sit. Without falling, you cannot learn how to walk. Without several mistakes, you cannot learn how to speak or write.  Who can ride a bicycle without falling? Who can drive a car without mistakes? Who can become successful without several failures? The rich understand this truth and that's why they embrace failures. Most people don't know this truth and that's why they remain poor. Listen, if you truly want to become rich, you have to dare the unknown. You have to go to places no one has been to. You have to try things most people are afraid of. When you do this, you can be sure that you will make mistakes and experience some very terrible failures. You must learn how to smile, recover from your falling and start all over again Until you can endure failures tens and hundreds of times without giving up, you cannot achieve anything worthwhile in life, including financial prosperity. Thomas Edison was a great entrepreneur and inventor. As an inventor, Edison reportedly made 1,000 unsuccessful attempts at inventing the light bulb. When a reporter asked, how did he fail to fail 1,000 times? Edison replied, I didn't fail 1,000 times. The light bulb was an invention with 1,000 steps. To be rich and successful, you have to embrace failures. You have to see failures as necessary steps to success. You have to try new things and bear new territories. If you keep your life, you'll lose it. If you try to take life easy, it will end up becoming very tough for you.  Try things, bear things, bear life, fight hard. Thank you very much for watching our videos. We'd like to give you another interesting video for you to enjoy next. But before then, our team will be very happy if you can like this video and share it with your friends on social media. Now if you're new here, don't forget to subscribe so you won't miss other interesting videos like this. Look at your screen now to see two other videos we handpicked for you to enjoy next. We love you


blockchain that is structure of a blockchain, myself Rashmi Dixit, so let us begin the session. Learning outcome, at the end of this session students will be able to analyze structure and working of a blockchain. As we have already seen what is blockchain, what are the different properties or what are the different types of a blockchain, we will revise here in a couple of minute. So blockchain it is a decentralized computation and information sharing platform that enables multiple authoritative domains who do not trust to each other to cooperate, coordinate and collaborate in a rational decision making process. In a traditional worldwide web, a client server architecture is used in which a data or information is stored at one place which is managed or controlled by a single entity that is a server. On the other hand, in a distributed blockchain a data is stored at multiple nodes or stored at a multiple participant within a network which maintain, approve and update new entries. So blockchain is a decentralized working environment. So what is the difference in blockchain and traditional database? So in blockchain only insert operation is possible while as we have all of you know that we can perform crude operations in a traditional database. In blockchain a full replication of block on every peer is possible while in traditional database master slaw multi master replication is possible. Majority of peers who are working in that particular environment agree on the outcome of transactions in blockchain in traditional database two PC or two phase commit protocol is used to check the working in a distributed environment. Anybody can validate transactions across the network that is the main point. Every network peer has a authority to validate the transactions. Anybody can validate transactions across the network in traditional database there are some integrity constraint. So let us see what are the core components of a blockchain. So node user or a computer within the blockchain transaction smallest building block of a blockchain system block a data structure used for keeping a set of transactions which is distributed to all nodes in the network chain a sequence of blocks in a specific order minors specific nodes which perform the block verification process concerns a set of rules and agreement to carry out blockchain operations. Let us look here the simplified blockchain. So every node maintain a public copy of global data sheet but before that blockchain consist of number of nodes which are connected to each other. So number of nodes now one thing that node may belongs to different organization that is important. Each node has a local copy of the ledger as well as public copy of the global data sheet. The system ensures consistency among the local copies the system ensures the local copies at each node is identical plus the local copies are always updated based on global information. The nodes communicate with each other in order to gain agreement on the content of a ledger. The purpose of gaining the agreement is called as concerns and there are number of different algorithms that have been developed for this purpose. Public ledger important term in case of a blockchain. So what is public ledger a database of historical information which is available to everyone. So that is important public ledger is shared in a distributed environment for each and every node. So blockchain with a number of nodes may belongs to different organization and communicate with each other. So what is the structure of blockchain? It is a data structure that is correct but there are two vital things are used. One is pointer what is a purpose? It is variables that keep information about the location of another variable. It point to the next location and linked list a sequence of blocks where each block has a specific data and link to the following block which with the help of a pointer. So pointers and linked lists. So pointer points to the next block which consists of data again pointer to the next block. So this is a sequence diagram of a blockchain in detail. Each blockchain block consists of certain data the hash of the block and the hash from the previous block. There is a one thing Merkle root. So what is a Merkle root? Every transaction has a hash associated with it. We know that the Merkle root is the hash of all the hashes of all the transactions in the block. The Merkle root is a part of block header that we all have seen in the previous diagram that Merkle root is a part of header etc etc but the Merkle root is also known as hash tree which is a data structure in a cryptographic manner that is important. Leaf node is a hash of block of a data and each non-leaf node is a hash of its child node. The benefit of using Merkle tree in a blockchain is that instead of downloading every transaction and every block a light client can only download the chain of block header. Also if someone's needs to verify the existence of a specific transaction in a block then that particular does not need to download the entire block. Downloading a set of plans of history is enough so no disturbance at all. So how blockchain works in a diagrammatic manner? So user sent a transaction request to a blockchain in order to perform the operation the chain is designed to provide so a transaction is requested. A block that represents a transaction is created that is important. So block that requests the transaction is created that block is sent to every node. Node validates the transactions for which that block is sent to node. So node receiver reward for the proof of the work. After that the block is added to the existing chain and the transaction is complete. So blockchain is a data structure to create and share distributed ledger of transaction among a network of computers. Basically it uses peer to peer network of a computer to validate a transaction. It allows user to make and verify transaction immediately without a central authority. Any new record or transaction within the blockchain implies the building of a new block. Each record is digitally signed. So all of you student please pause the video and try to think and write down the answer for the following question. So blockchain architecture can serve which of the following purpose of the organization. Think for a while and try to write down cost reduction yes history of a data is possible this ledger public ledger consist of database of a history of all transaction data validity and security yes each transaction which is digitally signed or digitally each record is digitally signed. So before conclusion or before reference blockchain is considered incorruptible. The first and in fact the prime difference in blockchain is a digital ledger that can be decentralized very easily. The chances of error in this approach are far less. So these are the references. Thank you.