Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

04/03/2019

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies AC
David Melding AC
David Rees AC Cadeirydd y Pwyllgor
Committee Chair
Delyth Jewell AC
Huw Irranca-Davies AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

Eluned Morgan AC Gweinidog y Gymraeg a Chysylltiadau Rhyngwladol
Minister for International Relations and the Welsh Language
Emma Edworthy Llywodraeth Cymru
Welsh Government
Rachael Clancy Llywodraeth Cymru
Welsh Government

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Alun Davidson Clerc
Clerk
Gareth David Thomas Ymchwilydd
Researcher
Yan Thomas Dirprwy Glerc
Deputy Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 14:01.

The meeting began at 14:01.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon, and can I welcome Members and the public to this afternoon's meeting of the External Affairs and Additional Legislation Committee? Before we get into our business for the day, could I remind Members that the meeting is bilingual? Therefore, if you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1. If you require amplification, that is also available on the headphones, but that's channel 0. Can I remind everyone to turn your mobile phones off or put them on silent, please, to ensure they do not interfere with the broadcasting equipment? There is no scheduled fire alarm this afternoon, so, if one does take place, follow the directions of the ushers to a safe place.

We've received apologies from Joyce Watson, Michelle Brown and Mark Reckless. We expect Suzy Davies to join us at some point as a substitute this afternoon. And can I welcome Delyth Jewell to her first meeting of the committee? I know you joined us on our visit to Brussels, but this is your first official meeting, so, welcome.

2. Sesiwn graffu gyda Gweinidog y Gymraeg a Chysylltiadau Rhyngwladol
2. Scrutiny session with the Minister for International Relations and the Welsh Language

If we go on to our agenda items, first on the agenda is a scrutiny session with the Minister for International Relations and the Welsh Language, Eluned Morgan. Minister, could you briefly introduce your officials for the record, please?

This is Rachael Clancy, who's our trade lawyer, and Emma Edworthy, who is director with responsibility for trade. Deputy director—I've just promoted her.

Oh, you big me up. Thank you.

Thank you. Okay. Clearly we've got some questions for you on trade, but we might go off trade a little bit considering there were various events last week and we want to explore some of the issues that were raised with us in Brussels as well. So, we might go off trade a little bit, but I'm sure you're used to that.

The central purpose, to start with, is a very simple one. You've laid the LCM for the trade Bill and, clearly, you've given recommendation of accepting it. Can you just confirm as to why you think we should now accept it, because previously the recommendation was not to accept it? The previous recommendation of this committee was not to accept it. We're still concerned about some of the facts on that. There has been some give but not all has been given by the UK Government. So, why are you thinking that we should go ahead with it?

Well, the main reason is because we've had some amendments that have been accepted in the House of Lords [correction: House of Commons] that did address some of the concerns that we had as a Government. I think one of the areas that we've said—. For example, they've told us that if they wanted to extend the sunset provision beyond three years, they would have to consult us. That was something we had big concerns about. They've now given us some assurances on that one. But it's not just the amendments that we've had that have been changed in the House of Lords [correction: House of Commons], but there were some despatch box commitments as well, which means that we are much more positive about our ability to influence in future than we were when it was first suggested.

Can you give examples from the despatch box commitments that you think can actually give you that confidence that the UK Government will adhere to the changes that we've identified should be put in the Bill?

14:05

On the sunset provisions, it's only a commitment to consult; it's not a commitment to actually listen to your advice or to do anything other than just consult. Now, I was a trade union officer, lay officer, but there was a definite differentiation between consultation with management and negotiation with management.

Yes, there is, but I think we've also got to recognise that this is an area where devolved competence is limited. Trade is something that is negotiated by the UK Government. So, it is only in those areas where it touches on our powers that we are able to influence.

But you are required to implement those agreements, and therefore you're required to deliver on those objectives as set by the UK Government.

Which is why we have insisted on and had agreed some of the amendments that we've set out. So, the concerns that we had before in relation to the negotiation and the consultation in areas of devolved competence, we think have gone much further than they were at the beginning of the discussion on the Trade Bill—

And the one you've identified was obviously—. Now it says 'consultation', but is it still possible to actually have that ad infinitum situation where they come back and they come back and they come back and we cannot stop it?

Well, you know, trade agreements, in the end, are going to be for the UK Government to agree. That's true across the whole world. I think the only exception is Belgium. So, it's simply a matter of fact, I'm afraid, that, with trade agreements, that's where it's going to be at. What we have seen is a recognition by the UK Government that if areas touch on devolved competence it makes sense for them to negotiate with us, to consult with us, because we at the end of the day are going to have to implement those areas. So, if you think about health, for example, we would have to implement that at a local level. We could make life very, very difficult for them if they didn't consult with us beforehand and get an agreement from us. So, they have recognised that it's in their interest to negotiate with us when it comes to areas of devolved responsibility.

Thank you, Chair. Just following up on that, we all of us understand that trade agreements are not a devolved scenario at the moment, so perhaps 'consult' is the appropriate mechanism that we should be using, but in that soft diplomacy area there, what happens if we are consulted with and there's a great deal of constructive engagement but we are in a fundamentally different position? What assurance will you be giving to the Senedd, the Chamber, then, in that scenario?

Well, it's much stronger than 'consult'. What they've said is that it's unlikely to be used without consent. It's the 'not normally' phrase that is used for almost all aspects of devolution power that is consistent in this regard here as well.

And that would be your feeling—that that is consistent as applied across other areas where it's primarily a retained function? This is the best, this is the optimal level that we could expect for this.

Yes. I think it's just worth taking us back to the fact that, in relation to the Trade Bill, this is about the trade agreement continuity agreement. So, it's not about the new ones, where we are working with the UK Government to put a concordat into place, and that's about where you want to get into the nitty-gritty from the very, very start. We are treating these trade agreement continuities as more of a roll-over. They're meant to be technical, so, really, a 'consult' should be enough in this. I say the word 'should', but we have felt that that is enough, and some of the changes that were made do echo what was done in the European Union (Withdrawal) Act 2018, so they are just identical and consistent.

Chair, I wonder if I could just ask one further one. 'Consult'—normally, we would expect that consultation to end up in agreement and so on. That 'what if' question—do you expect there to be any—? Is your scenario plotting—? Are you expecting in these continuity trade agreements for there to be any situations where we do not have agreement, where they consult and we have a stand-off? They're done on the basis that it should all be smoothly running, but are you anticipating any areas where there is disagreement?

For the continuity ones, we consider these to be technical changes. So, we take the agreements at the EU level and we translate them into UK law. They are technical in their nature, so we wouldn't expect there to be any impact in that sense. Would you like to—?

14:10

Yes. Well, I suppose if you look at the ones that we have seen that have been signed by the UK, Switzerland, for instance, has an agreement where, yes, it's not the same, but bits have been missed out, but none of those bits that have been missed out need a change in policy from our perspective. And the bits that've been missed out are in relation to the Swiss agreements with the EU, which really need us to have an agreement with the EU. So, those agreements can't be made between the UK and Switzerland until the agreement with the UK and EU is worked out. But we don't see them as a need to change policy in Wales.

It might be helpful for me to just jump in here and say that the 40 agreements that are being rolled over and to which the trade Bill applies, will already be implemented. The EU-UK ones will already be implemented by EU law in the UK anyway. So, given that the policy is to just take those agreements and lift them over so that they're with the UK and not make any substantive changes, one would expect that there won't be a call for many regulations to be made under the Trade Bill to implement these agreements. That's not to say, of course, that there couldn't be substantive changes made, because it's all diplomacy and negotiation, but I think at this point, certainly from officials' perspective, we would not be anticipating any major, controversial, substantive, meaty changes to be made.

I appreciate that point and the carryover—as you said, it's basically trying to roll over the existing ones, but the UK Government has already indicated that there may be changes depending on negotiations it has with the third countries.

I suppose what we're trying to find out is what is going to be your role if there's a substantive change that you do not agree with.

Well, what I think is an understanding is that if it touches on devolved competence, then there is an understanding that we would normally have a role in that.

It's that role, I think, that we're anxious to understand, Minister. I would caution, somehow, and want to press you on the approach that you outlined in answer to the first question in that simply saying that trade is the responsibility of the UK Government and therefore, we will create this architecture with that acceptance. I would be cautious about that approach, because the UK has already accepted that in international agreements, devolved administrations have a significant role. You will remember as a Member of the European Parliament the agreements made at the Council of Ministers following the financial crash in 2008-09, and that involved significant commitments on behalf of the UK Government for devolved administrations, and devolved administrations had a significant role in agreeing that. So, there has already been an agreement and a recognition of the place of devolved administrations, and it's important that corporate memory of the Welsh Government recognises that.

But also, we had an interesting conversation with the New Zealand ambassador in Brussels, and he was describing how trade negotiation—I recognise that these are roll-overs, but my concern is what you concede in points of principle as part of this. He was making the point that modern trade agreements go far beyond agreements on tariff removal and the rest of it, and are about a far deeper range of relationships between states and nations. And I think he talked about the sustainability issues that they're looking at pushing as part of agreements at the moment. Now, if you are looking at an agreement of that sort, if we are to maximise our leverage and maximise our influence, it's important—I'll ask if you agree with this, Minister—that we don't actually concede an overly subservient role at the beginning, because that then means that we're unable to play a much wider role in future conversations with the United Kingdom Government about wider issues about relationships with other countries and other states.

I think there are two very different issues here. We've got the roll-over agreements that are supposed to be technical in nature and then there are the future trade agreements. Now, let me make it absolutely clear that, when it comes to future trade agreements, we will expect to be consulted at every single opportunity on anything that impacts on us in terms of devolution, but also the wider points that you're making. I think we've got some very interesting things to contribute. But we would expect to have an influence and to be there in terms of discussion on which one should be prioritised—so, right at the beginning of the process, right to the end of the process, when the final agreements are made. But there are all the bits in between—we would expect to be either at the table or at least in the room next door when those trade agreements are being made.

14:15

On the future trade agreements, we will come back to that agenda later in the discussion, because I want to focus on the Trade Bill at this stage, because there is an element we want to discuss on the future trade agreement.

Sorry, it is the 'room next door' view that worries me, because what I would want us to see is that it's a joint venture between the United Kingdom Government and the Welsh and Scottish Governments in resetting relationships with third parties that enable us to be a part of that discussion rather than simply in the room next door listening to what other people are saying. That's really what I hope we will be able to agree in the future, but I—

I think that point is important on the roll-over ones in particular, because on the roll-over agreements, there may have been some that benefitted other parts of the EU, not necessarily ourselves. Therefore, we need to look very carefully at each of those roll-over agreements to ensure they're to our benefit, not necessarily to someone else's benefit, in a sense. So it's as important on a roll-over as it is on new agreements.

Could I just answer the last point before we go on? Sorry. In relation to that room next door, the reason we have given that as basically plan B if you're not part of the negotiation team is: if you wanted to be in the room, and just an observer or part of it, the third party can actually disagree. So, when we've been talking to Quebec recently, you'll know that the EU asked for the provinces to be in the room for the negotiations. If you look at the recent experience with Canada, America and Mexico, the US said that the provinces couldn't be in the room, so when we say 'the room next door', it's that plan B if you're not part of that negotiation team. So, I just wanted to set that out.

It's not in our gift. So, that was—. Sorry.

We understand that you've had a commitment from the UK Government that they won't use any powers in relation to clauses 1 and 2 in areas that are devolved. Do you think that a non-statutory commitment is strong enough?

I think we can—. In an ideal world, it would be lovely to have a statutory agreement, but in terms of non-statutory, when it comes to the roll-over that we're talking about, then none of this is ideal, but there's not much time left here, and what we're really concerned about is falling off a cliff in literally three weeks' time. So, there is a time element here. In an ideal world, we want to see every detail of everything that's going through before it happens. That's not what they're giving us at the moment. We're not seeing these agreements until they're actually being signed, practically. Of course we want to be in a better place than that, but we are at a really difficult time at the moment. What's more important than anything is that we get these agreements signed, because there are companies in Wales that will suffer massively if we don't have these roll-over trade agreements actually signed in time. And a lot of them that will impact on Wales negatively will not be done in time, so there is a time pressure here.

I completely appreciate that. I suppose that—alongside the practical implications of there being a precedent set with a non-statutory commitment, I'm sure that you're aware that the Constitutional and Legislative Affairs Committee that are meeting next door at the moment have raised concerns about how one of the unintended consequences of the inter-governmental agreement was that it would be reducing the legislative competence of the Assembly. Is that a reading that you would recognise? Do you agree with that? Is that something that concerns you as well?

Yes, it is something that we recognise, and it is something that concerns us. It's something that we've discussed with the UK Government. I think there's an understanding that both Governments recognise that this wasn't what was meant to happen, so we're speaking to the UK Government about that. Part of the problem is that, in order to change things, you have to have a read-around [correction: write-around] of all the different governmental departments within Whitehall. Again, it's all about priorities at the moment and where we set out those priorities. And, at the moment, we just want to get things over the line as soon as we can. 

14:20

And if I can ask you on that, in terms of the discussions that you're having with UK Government on that point, what sense do you get about—? Do they agree that that's something that—? Do you think that there's anything that they can do to address that?

I think there is a degree of sympathy from the UK Government. So that's the feedback that we're getting from them: that they understand that that was not meant to be the situation. So, we are in negotiations and discussions with them, and I think there is a degree of sympathy, yes. 

Minister, you talked about time pressure earlier on, and I appreciate there is a time pressure, but the time pressure's being created by the UK Government. I just wondered—. If there's a deal, there is no time pressure, because we've got another 20-odd months, because we'll continue to operate under EU regulations and rules. But, are we ceding to the UK Government simply because they have created a time pressure? And should we be actually saying, 'Hang on a second, we do not agree with this because it's not in Wales's interests', or are we simply saying, 'We understand your time pressures. We'll give you what you want'? When are we standing up for Wales's voice?

Well, again, what we're talking about here are technical changes. That's what these are supposed to be. These are supposed to be technical switch-overs from what is currently the case.

I accept that, but you've identified the Swiss one is not technical. There are changes to it, and there could well be changes to other ones, because there are 40 and they've done six. There are 34 to go.

The Swiss one is interesting, because it's—. I don't think it's—. It's not including it, rather than doing something new. So, that's still not a political change that's happening there, it's just being eliminated somehow. Now, there's not much we can do about that, so, again, I think we'd rather have something and lock down those areas we can, in particular Switzerland, which is one of our top 10 export markets. 

Could I just deal with a few more elements in terms of continuity in trade agreements? What assessment have you done so far of the potential of leaving without having rolled over all of the EU trade agreements, the continuity agreements, by the time we leave the EU? What areas, what sectors are particularly exposed with the time pressures you were talking about? So, if we don't get it all rolled over, what does it mean for Wales?

So far, they've signed about six out of 40 that would cover about 70 different countries. Now, lots of those countries are not terribly impactful for us in Wales. I don't think we've got a huge amount of trade with the Faroe Islands, for example. About 0.05 per cent of our exports go to Chile, so that's something, and Israel as well—0.18 per cent for Chile [correction: Israel]. So those two are there. The ones we're particularly concerned with now that haven't been signed that we are really concerned about are with Turkey. We're very concerned about Turkey, in particular in relation to steel. So there's a big steel issue in relation to Turkey.

The implications could be that, whilst—. The barriers we could—. With steel in Turkey, there's an aggressive market, so they could be exporting to us and it would be much more difficult for us to export because of tariffs that would be placed on us immediately under World Trade Organization rules. So we are particularly concerned about that. 

The other area is South Korea and whelks. We've got a big trade relationship with South Korea. They use whelks as an aphrodisiac in South Korea. 

And that is an issue, because actually we export quite a lot of them. That trade agreement is not likely to be done in time, either. 

Okay. This is helped, Chair, as you say, if we actually don't have a cliff edge and we have some more months to deliberate and seek the resolution of these. But can I ask you about more substantial changes? On those rare areas where there may be more substantial or significant changes to devolved content, you've seen the Scottish Government's proposals—really interesting, quite robust in the way that they approach this. Where there are those significant changes, they would see a necessity for consent to be of both the Scottish Government and the Scottish Parliament as well. That seems quite an eminently sensible suggestion, do you not think? 

14:25

We've made it absolutely clear, if it touches on devolved responsibilities, that we need to be involved. We are a little bit concerned, if we start saying a veto, then there'll be failure to progress here, so we are a little bit concerned about that. As I say, the only examples we know of where a devolved tier of Government does have that power of veto is Belgium. Canada doesn't have it, Australia—so, those are the models we've been looking at—they don't have it. But what we are keen to make sure is that we do have a meaningful role in future trade negotiations. I think it is important for you as a committee to also be involved, and I would encourage you to keep putting pressure, as you have done, on the UK Government to say that you as an Assembly also would like to make sure that you are able to use your democratic oversight for the benefit of Wales.  

I thought that was a very interesting answer, and I also share your misgivings about any veto power held by sub-state Governments. I'm not aware of one apart from Belgium, and it causes that state huge difficulty. However, I suppose the slight criticism one might have of the Welsh Government's approach is—you know, you've gone for deep consultation, you want to develop a framework for trade with the UK Government, agree negotiation objectives and have some sort of ongoing dialogue whilst negotiations are going on, which is very sound, I think, and sort of reflects what happened when these things were dealt with by the Council of Ministers, or the European Council. You want to formalise this in JMC at first, but then in some sort of Council of Ministers equivalent within the UK. I've a lot of sympathy with that approach—inter-governmental relations need to be stronger, in my view. But it seems to me the UK Government has only come back with—is it a ministerial group for international trade? That sounds as if you're going to be called around occasionally to have a bit of a chat about things in general. Well, it doesn't have quite the smack of deep consultation and participation that, in fairness, your model seems to.   

So, we've consistently called for a JMC for trade. The reason why we haven't really dug our heels in on this is because it looks like there's going to be a whole reassessment of the JMC model. So, what we don't want to do is to hold anything up, and we want to make sure that we can get going. So, that's why we've settled for a joint ministerial forum for now. We have had really constructive discussions with the trade Minister, who understands the need for a really flexible arrangement, because the thing about trade negotiations is that they can proceed really, really quickly, and then nothing happens for a long time. So, you just need that flexibility. That's something that he's pointed out to us—that, actually, we may need to engage really intensively at times. So, it doesn't make sense to have, 'These are the dates when you're going to engage'.

We have a really—. I think our officials now have a really good relationship that's been developed with the trade officials up in London. So, what we're looking for is ministerial and high-level engagement consistently, and some of this will be set up in the concordat. I think we are confident we're moving in the right direction, but also they understand that it doesn't make any sense for them to be negotiating a deal where, effectively, we could make life very, very difficult for them afterwards if they don't involve us and we're not part of the negotiation.    

Could you explain, because you've said that twice this afternoon, how could you make life difficult for them? 

Well, just take—. If we were to have a negotiation with the United States on healthcare, and if the UK Government said, 'Yeah, we'll open up the market to private healthcare', we in Wales could say, 'Well, actually, we're going to make life very, very difficult for you to do that in Wales.' So—

14:30

Well, as I said, how? Because I understand the international agreements supercede most other things. They are—

But there is a practical issue, isn't there, and that's the point, that there's a practical issue of how you actually make that happen, and they recognise that, actually, you can't get a lot of this work done on a practical level unless we are involved. So, this is something that other trade negotiators around the world have recognised, and why some of them insist that those sub-national level delegations are also in the room. 

Thank you. On that, I appreciate that, obviously, you'll be wanting to plan for all scenarios. If the worst were to happen, and the Welsh Government did have to make things difficult, are there concrete plans in place for how that would happen?

We're a long way away from that. Trade agreements take years to negotiate. None of this stuff is going to happen quickly. So, concrete plans are miles away, but there is a recognition, I think, by the UK Government, that it makes sense for them to involve us. And that has been a shift that's happened in the past year, really, hasn't it? Is there anything you'd like to add, Emma, to that?

No. I think, you know—. I apologise that we can't give you all the detail that you need today, but the concordat that is being developed, which we've mentioned a few times today, will pick up a lot of this detail. I'm sure that, as soon as there's enough to come back to you with, that's what the Minister will be able to do. But the plan is that this concordat will go into quite a lot of detail on the nuts and bolts of when we're involved and what is shared, so, if it's text and that sort of stuff. So, it's going to be quite a detailed document. 

What about your own policy formulation capacity? If you're seeking to have an influence on the development of trade frameworks, how's that going to be done, beyond the traditional issues we've had around lamb and certain seafood, for instance? It needs to go deeper than that, doesn't it?

Well, you've got to remember that nobody in the United Kingdom has negotiated a trade deal for 40 years. So, this is not just an issue for us; it's an issue for the UK Government as well. We simply don't have UK trade experts in the country. We're starting to develop them, but this is a learning experience for everyone here, and, obviously, if there are areas where we are particularly concerned, then we will have to put resources in as necessary to make sure that we can feed in. But Emma's become an expert in the past few months, haven't you, really, in terms of trade. We just didn't have anybody doing this role before, and now we have, and there's a little team developing around her. 

That seems—. I accept what you say in terms of developing capacity, but it seems limited to an adaptation of what's going to be done at the UK level, which, I dare say, most of the time will be appropriate. But I'm not sure it's generating a more considered and deeper trade policy from within Wales to determine what the UK then agrees. So, perhaps this is not what you mean when you say you're after deep involvement of devolved administrations in developing the framework for trade for the UK.

That sounds quite primary, doesn't it, what I've just read, whereas yours seems to me attentive but somewhat reactionary to what's come out of Whitehall. 

No. I think, if you look at Whitehall, it's all been reactive. None of this was planned two and a half years ago, so they're making it up as they go along. What we're keen to do is, if we go down this route, then we want to be involved right from the very beginning. We want pre-negotiation discussions in terms of which countries should we prioritise. And we may have different ideas from the United Kingdom in terms of where we should prioritise. So, they see the United States as the No. 1 country. Well, we're saying, 'Well, we're not so sure about that actually.' We do quite a lot of trade with the United States as it is, without a trade agreement. There are areas where—if they did want to import chlorinated chicken, well, that might be a problem for us. But also lamb markets and things—there are lots of things to consider that could be counterproductive for us if we started to open up the markets. So, we've got to be very, very careful. So, determining first of all which priority countries we'd like to see, then we get into the detail of that, and then I guess what will happen is that the experts in that area—so, if we're talking about agriculture—would move into that trade negotiation area. So, Emma has a huge amount to do with the agricultural department, because they are on top of what happens in that particular sector. But it may be, on another occasion, that steel is another area, or it may be something that, actually, we haven't got any in-government experience with at the moment, because we have never had to do it before, and we have to develop it. So, it is difficult to work this out, but the one thing that I think is clear is that these things take a long, long time to negotiate.

14:35

I'll bring in Alun now, but I'm sure you agree, Minister, we don't want to be in a position—we want to be reassured that the Welsh Government is not making it up as it goes along as well. That's why we're trying to scrutinise the role. 

You will provide the committee of the National Assembly with a copy of the concordat, before it's agreed with the United Kingdom Government, for scrutiny.

I don't know—can we do that? I don't know about before—I think it would be difficult to do it before; we could do it straight afterwards.

Well, then you'd be making an agreement without any consideration of the views of the National Assembly. And you're content to do that.

Well, it's a Government-to-Government relationship, that is, so—.

There are questions as to what the purpose is of scrutinising something after it's happened, but—. It would certainly, I think, be a wiser course of action to seek the support of the National Assembly before entering into an agreement with the United Kingdom Government. Certainly, I would have hoped that the Welsh Government would actively seek to do so.  In terms of the—. And I hope you'll reconsider that. In terms of the current structures, I agree with your view on the ministerial forum at present, although I'm not convinced that it actually provides any real opportunity for either conversation or for anything except the reading across the table of prepared lines to take. Frankly, I don't believe that it actually has much more of a role than that. But, in terms of the acceptance of a structure that is across the United Kingdom and owned by the Governments and Parliaments of the United Kingdom, I think it's an important point of principle. But I think it would be important then for the Welsh Government to look for a role within the formulation of trade policy that is more than simply, as David has said, responding to the United Kingdom's lines and then providing a Welsh paragraph. I think we would want to see a much richer approach from Government. And, certainly, in terms of the example I quoted earlier, from New Zealand, there are enormous opportunities to do that, in a much wider sense than perhaps has been described so far. Is that something you've considered, you've given active consideration to?

Well, yes. And I think your point earlier about it being—. It's not necessarily just about the devolved competence areas. I think we've got to look at broader issues. So, I think we've got quite a lot to contribute in terms of things like the Well-being of Future Generations (Wales) Act 2015. I think that's quite an interesting thing. Some of these trade agreements, they will be looking at environmental issues, and I think we've got things to contribute in some of these areas, and we shouldn't be afraid to make sure that our voice is heard in some of those areas as well.

Is there any reason why the Welsh Government's proposals for future trade agreements suggest a lesser role for either the Government or the National Assembly than that put forward by the Scottish Government?

Look, the Scottish Government ultimately want an independent country. We are very clear that, actually, we are part of the United Kingdom, that we understand that trade negotiations will be primarily determined at the UK level. But that's not to say that we don't think that we can have a very significant influence on the development of those trade negotiations. Rachael, is there something you wanted to add?

14:40

I was just going to suggest that perhaps the development of the international strategy that you  yourself are promoting at the moment might be one vehicle to consider the issues that you're raising here. 

Just to add to that, the reason we don't have at the moment, for example, genetically modified production within Wales is because of the UK process of negotiation around the top table in the side rooms there that comes to a position that says, 'We respect the Welsh Government and the National Assembly for Wales's position in terms of GM production.' It seems to me what you're suggesting is—rather than a Scottish model, as Alun was saying there, which is very robust and does have that power to say—if the UK Government would come forward with a proposal, not that they would, but, say they were to suddenly drop animal welfare standards on imported chickens or whatever, then rather than have a veto in that Chamber across the way, what you would say is, 'Actually, we'll sort that out before it even gets to that point.' We will sort that out through being at that new inter-governmental mechanism, that new Joint Ministerial Council mechanism. We will sort that out before it even gets there, and we will have confidence that they would not do something like that to us.

I think that would be our preferred model. In a practical way, I think that's more likely to get us further than saying we insist on a veto. There's just so few models in the world where that exists. So, let's actually engage really actively with the process. You're absolutely right, what we would hope for is that we could influence the process before it gets to that point. Again, we come back to this point of: if they're trying then to import goods into Wales where we have a different legal position, then that could wrap them up in constitutional fights for ages. It's not in their interest to do that.

I agree with you, but there is a possible future scenario, not necessarily this year or next year but some years down the line—there's certainly been a recent UK Government Minister who in his private moments talked about a far more free market approach, a far more liberal free market approach to animal welfare standards, environmental standards, et cetera, if he only was king for a day. As it happens, he was the agricultural Minister, which is quite interesting. If that developed in five years' time down the line, where there was a very different approach that really ran counter to our future generations and well-being Act, then at that point, the structures you're describing in future trade agreements, would they be sufficient to deal with—?

I just don't see that it's in their interest to pursue that route, because there's a practical problem of them importing things into a country where we have different rules and regulations. There's also the constitutional issue that they'd have to take on, they'd have to take on a big fight. I just don't see why they would pursue that particular route.

Can I just confirm you've had legal advice to that effect, have you, to say that that will be the issue.? Because, clearly, it's important we understand the legality in this as to what the rights of the UK Government in a trade deal are and what our obligations are under that trade deal legally. So, have you had legal advice to say you don't see it happening because it's not going not be suitable and we'll take them to all the courts? Have you had that legal advice?

We probably haven't, because we haven't got to that point yet. This is very, very early days. Don't forget these trade negotiations haven't started, and they can't start until we leave the EU. 

Well, it might be. They take years and years and years to negotiate. So, I think we do have time on our hands in terms of future trade agreements, but I do think that they will have a constitutional fight that is not in their interest to pursue. 

I was just going to say, I know the Minister mentioned earlier about the broader inter-governmental review that is going on that is looking at the new mechanisms for the UK.

It is taking a long time, but some of the things that are going on in parallel will help with this as well. So, if you look at the agricultural side, the quad that is now in place between the DA Ministers and UK Government, those terms of reference are further ahead than our terms of reference with regard to the joint ministerial forum. So, within there, you would expect dispute mechanisms to be part of those terms of reference. There's going to be more detail in there. I promise you, as an official, I'm not going to just sit there and ignore some of the points that you're coming up with today, and it's frustrating we can't go into more detail with you on some of the discussion, so I do apologise.

14:45

On the other point, there's no getting away from the fact that international relations and the regulation of international trade are not devolved. There is absolutely nothing legally that the Welsh Government can do about that, or, indeed, the Assembly. All of the mechanisms available to address that are political.

In relation to what the Minister was saying about creating a difficult position if the UK Government wished to do something that was contrary to the interests of Wales, there are two things there, I suppose. The first is that the UK Government and Parliament would have the ability, under these concurrent powers—and, indeed, under Acts of Parliament—to override whatever the Welsh Government or the Assembly wished to do, and again, there's no getting away from that, and the only way available to address it is politically, because there are no legal mechanisms available to do that.

But in relation to the difficult position that the Minister was talking about possibly being able to create around a deal that wasn't negotiated to the Government's satisfaction, then if you remember the Transatlantic Trade and Investment Partnership and all the concern about that, where investor state dispute mechanisms were an issue and the ability of Governments to regulate in the public interest, and the concern there that private entities in foreign countries would be able to prevent that or hold it up, there is a thing around the hostility or not of a nation that can have soft, but nevertheless appreciable, influence on other countries' ability, or indeed willingness, to negotiate with a particular country. And that is one area where the Welsh Government, and indeed the Assembly and civic society, could play an active role. But not only that; in relation to the powers that the Welsh Government have, or the powers that the Assembly itself has, to legislate and implement trade deals, we would need to implement the trade deals for sure, but the way they are implemented could have an effect in practice on whether or not the environment in which those trade deals are implemented is hostile or friendly. Because, there will always be policy choices about how you implement deals, and there will always be elements of international agreements that are not strictly obligations, as such, but are perhaps aspirational or co-operative or in that kind of sphere where you could make a real big difference in how you legislate or how you implement them.

I don't think anybody wants to walk down that route of trying to create a hostile environment for an agreement that nobody agrees with. That's not where we want to be, and I want to take a step back from this. What worries me, Minister—. When I hear you saying 'influence the UK Government', I'm really worried by that, because my experience as a Minister—and Ms Edworthy will remember this from her agriculture days—we didn't influence UK agriculture policy. We created it and we did it together, as UK administrations sitting down on four sides of the same table, discussing, debating, agreeing a joint United Kingdom policy—and we did that collectively as Ministers and officials working together. Now, it seems to me that that isn't where the Welsh Government is today, and that really worries me, because the quad that Ms Edworthy described tends to work well by consensus or tends to work well by agreement. It doesn't work well if there isn't agreement. It doesn't work at all, in fact, if there isn't agreement. So, there is, therefore, a structure, and a structure that has been in use for, certainly, the last decade or so, where the United Kingdom Government has sat around a table with other Governments in the United Kingdom and agreed a UK position that isn't necessarily the policy of the UK Government, but the policy of the Governments of the UK.

Now, surely, that is the objective that you should be pursuing, because whilst I accept the advice given by Ms Clancy, I don't accept it in full. You are right in your description of the UK constitutional position. But, surely our position as politicians is to create that and recreate it and recreate it again, rather than simply wash our hands of particular failures. That's not what I would have anticipated any of the politicians here came into politics to do. So, surely, as a Welsh Government, the ambition should be far greater and the vision should be broader than simply trying to fit into a structure that wasn't designed for us to fit into. 

14:50

Well, look, none of these structures existed before we joined the European Union. So, we're coming out to a whole new world where devolution now exists. So, you know, everybody's having to create a new structure and a new system that didn't exist before. We, I think, would accept that, certainly in relation to devolved areas, we would want to shape it. Absolutely, we would want to shape what the UK Government position is. I think that is a harder case to make on areas that are not devolved. But, I think, in terms of devolved areas, yes, we would be very—that's what our intention would be, it is to shape the policy itself. But there's a big crossover going to happen between what's happening there and what's happening in the quadrilateral on agriculture. So, all of this stuff is being looked at and being worked out. It's a very, very recent thing, isn't it, it's only two years old—where we've had to get involved on a different level. Some of that work's been done in the context of creating a position for negotiation in the Council of Europe, but this is a completely different environment now that we're working in.

Sure. But the structures that were put in place in order to achieve one can be used as a template in order to achieve another— 

—and, certainly, you know, the economy, economic development, is a devolved function. So, it would appear to me that an active, proactive, agile Welsh Government could certainly argue that almost any trade deal with any country on any matter affects the economy of Wales and therefore should have a view from the Welsh Government as a part of it. I wouldn't wish for Welsh Government simply to retreat in any way, but to take a view that is more expansive, if you like, to ensure that the wider economic well-being of the people of Wales is protected as a part of any agreement we reach with any third party on any subject at any time. 

Well, I don't know why you think we're not being expansive. I think we would be very keen to make sure that we are having an influence because there does need to be a recognition that what is happening in terms of trade is going to have an impact on our nation. So, absolutely—which is why, in an ideal world, we want to be at the table. We want to be a part of the negotiating team. 

Can I take you back, Minister, to the answer you gave to Alun earlier about the difference between what the Scottish Government are going to be expecting for the purposes of continuity of trade and Welsh Government? When you say that the difference can be explained because the Scottish Government wants to be an independent nation, do you think that's the only reason why that difference is? Because, to me, it certainly seems that it wouldn't just be because of political things. This isn't just about the aspirations of the party in the Scottish Government at the time, it's about the maturity of that legislature. If I can put it to you, do you think it is just because of the politics?

I think that, if you look at where we want to influence and how we'd want to influence, we're probably not far off—you know, we're in the same place as the Scottish Government in that sense. The difference is: do we think that we can get a power of veto over future trade agreements? I think we're being realistic when we say that's unlikely to happen. That's the big difference. 

I'll come back to a question and then we'll come back to Alun on international relations, but we're still talking about trade, the trade remedies issue is clearly an important one and the consent you were recommending didn't include a Welsh voice on the trade remedies authority, that wasn't accepted by the UK Government. But if we're looking at the roll-over of trade remedies from the EU that currently are in place, the UK Government has accepted 43 of them and rejected 66. Have you done an analysis of those 66 that have been rejected, and did you actually input into the decision making of the UK Government?

14:55

On the trade remedies, there was a system where the UK Government asked companies, 'Which things do you think we should retain in place?' So, all of the areas where companies [correction: steel companies] said, 'We think you should retain these areas' have been honoured. The ones we were particularly concerned about in Wales were in relation to steel, so they have all been respected. As a Welsh Government, we weren't able, because of the rules, to be insistent that we could formally input into that, because of the rules that the UK Government put around it in saying that you had to be a producer, effectively. But we have had ministerial correspondence in relation to just setting out and making clear to the relevant Minister in the UK Government that there were certain areas that we wanted to protect, and that included steel.

So, are you confident that the 66 that will be terminated will not impact upon Wales?

To the best of our abilities, that's what we believe.

And you've done an analysis on those 66, to justify that belief.

When you say analysis—

Well, you've gone through each one of them to make sure that there's no Welsh business affected by it, no Welsh exporter affected by it.

No, we haven't done that, and the reason is, the call for evidence that went out from the UK Government asked those companies who were party to those remedies to say if they had an issue. Quite a few of those 66—. Nobody came forward. And if you think you have to have market share as well, if you're a very small producer, you didn't meet that criteria, equally, then that wasn't taken into account.

So, we have had to go on, quite frankly, the stuff that's come in to the UK Government from companies across the UK and, bar knowing that the steel industry responded, we don't know of any other Welsh companies that asked for those remedies to stay in place. But we do know what was asked for is staying in place. But have we done an individual analysis of those 66? No, but we're quite confident, as well as we can be, that there will be no significant impacts. But I'm sure, as you probably understand, that we can have a look at some of this stuff, but, until it happens, there's probably going to be quite a lot that falls through the net, not just in this issue.

And did you play, as a Welsh Government, any role in the trade tariff schedule that is going to be published shortly?

We have been speaking to the relevant Government Minister, but that will be a decision for the UK Government. But they haven't given us any foresight of what's likely to be in those schedules and where they're going to impact.

So, when you say 'speaking', I'm assuming you're putting the case for the Welsh Government.

The First Minister wrote to the Chancellor of the Exchequer on—

In February—just making clear that we want a balance between producer and consumer rights, that you need to make sure that those are balanced, to set out concerns particularly in relation to red meat and, I think, steel also. There were two. Automotive. There were a few specific points that were made in that letter.

We're coming to the end of our session, Minister, and I wanted to just finish off on, perhaps, the international relationships agenda, because, clearly, last week, you were in the USA and Canada and the First Minister was in Brussels. And so, Alun, on the future relationships.

I noticed from social media you seemed to have had a successful visit to the US and Canada. It would be useful for the committee to understand what your objectives were for that visit and how you think you've met you're objectives.

The original agenda that was set out I changed quite significantly because I was keen to focus in on areas where, I think, in the light of Brexit, we need to focus on areas where we have particular expertise. So, some of the things that I did were to focus on cyber security as an industry, where I think we should be really promoting Wales. So, I met with some cyber security experts with companies, some of whom are keen to expand within Wales. I also met with various chambers of commerce over there who have real concerns about Brexit, if we're honest, and, you know, it's a difficult message to sell at the moment. Also, obviously, there are the political links in terms of Congress and relationships with the Welsh diaspora. I think there's a lot more work we can do in relation to linking with the Welsh diaspora and, in particular, introducing business-to-business contacts. So, there are a lot of people in pretty high up positions in US businesses that we can link Welsh businesses with. So, I think there are a lot of opportunities there.

But the other thing I was keen to do was to make sure that it's not just all about trade and the economy. So, I was able to speak at the United Nations about our Well-being of Future Generations (Wales) Act 2015, which I think is a model that the rest of the world could be looking at. The UN is really interested in our work on that and how we are practically translating the aspirations into law, and they're very keen for us to share that example around the world. But also this is the UNESCO International Year of Indigenous Languages, so it was really good to make some points at the UN again about what we've done in terms of increasing and what we're doing to increase the number of Welsh speakers in our country. It was good to share a platform with people from the Basque Country and from other areas where they have issues in relation to minority languages in their countries.

15:00

That's interesting, and I'm sure we'll pursue these matters on another occasion. But, during our committee's visit to Brussels, we had a number of conversations about engagement of the Welsh Government within the EU institutions, not simply in Brussels but the institutions as a whole. It might be useful, given our time constraints this afternoon, if you were able to write to us with perhaps a schedule of ministerial visits that have taken place in the last year or so to the EU institutions, the purpose of those visits and what they achieved.

Okay, I'm sure we can find out that information. It would also be useful for us to get some kind of read-out in terms of your visits—what you learnt and what we can learn from your visits. I think that would be useful as well.

One thing that we clearly learnt from our visit is that they want a higher presence in Brussels, because they believe it's important to maintain that presence, and that the soft diplomacy that we have become very good at in Brussels must continue. That's a head start.

The various institutions we met, that's both in the Parliament, organisations that have other missions, the Confederation of British Industry—so, the various bodies that we met when we were there. 

Okay. It will be useful to get a list of those and to just get some specifics.

We will be producing an output from that report. I'm sure we'll send you a copy.

Well, our time has come to an end, so can I say thank you, Minister, for your evidence this afternoon? You know you will receive a transcript to check for any factual inaccuracies. Please let us know as soon as possible if there are any. Once again, thank you for your time this afternoon.

3. Papurau i'w nodi
3. Papers to note

We move on to the next item on our agenda: papers to note. We have several. I'll go through them one at a time. Paper 1 is the correspondence from the Chair of the Constitutional and Legislative Affairs Committee to the First Minister regarding scrutiny of Brexit-related legislation. I will suggest to Members that we write to the First Minister to support the points being made by the Chair of CLAC, as we've often felt the same thing, and it will reinforce the points being made in regard to Brexit-related legislation, particularly the comments where it would be better to send it to the UK than fast-track it through the Assembly, because at least fast-tracking does give us some scrutiny here in the Assembly.

I absolutely agree with that, Chair. It would be, perhaps, useful for us to actually understand what the Government's intentions are for the future as well, because we were told that the reason that this UK approach was being taken was because of pressure of business here and the pressure on resource here. Well, we don't seem to be seeing any of this legislation at all, so there seems to be less Government business this year than there was last year. So, I think it would be very useful for us to understand how the First Minister sees the future as well in terms of pressure on this place.

We'll put that into the letter, and it will be circulated to Members for approval.

Paper 2: correspondence again from the Chair of the CLAC to Lord Boswell, regarding the post-Brexit UK-EU inter-institutional relations. Are Members happy to note that, because we have responded as a committee to that?

Paper 3: the legislative consent of the Trade Bill—correspondence from the Minister for International Relations regarding that and the supplementary legislative consent motion. Are Members content to note that paper?

Paper 4: the correspondence from Baroness Fairhead regarding the trade Bill, which doesn't tell us anything more than we have seen in the written statements from the Secretary of State for International Trade. Are Members content to note that?

Paper 5: correspondence from the Minister for International Relations and the Welsh Language regarding the international agreements that have been put into place, which, again, we've explored this afternoon to some extent and I'm sure we'll want to explore even further in future. Are Members content to note that at this point in time?

I will ask one question that we didn't ask her today. I think correspondence from the Minister also highlighted correspondence between the Minister—or Cabinet Secretary, as he was then—for economy and transport infrastructure and Greg Clarke—or is it Greg Hands?

15:05

Greg Hands. And then a letter from the First Minister. And I noticed the dates between those had a 12-month gap. I would like to write to the Minister seeking clarification as to whether any further ministerial correspondence took place within that 12-month gap, because it seemed to be a long gap between ministerial correspondence passing back and forth. Okay. Thank you for that. That's all the papers to note. 

4. Cynnig o dan Reol Sefydlog 17.42(vi) a (ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod ac o eitem 1 yn y cyfarfod ar 11 Mawrth 2019
4. Motion under Standing Order 17.42(vi) and (ix) to resolve to exclude the public from the remainder of the meeting and item 1 of its meeting on 11 March 2019

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod hwn ac o eitem 1 yn y cyfarfod ar 11 Mawrth 2019 yn unol â Rheol Sefydlog 17.42(vi) a (ix).

Motion:

that the committee resolves to exclude the public from the remainder of this meeting and from item 1 of its meeting on 11 March 2019 in accordance with Standing Order 17.42(vi) and (ix).

Cynigiwyd y cynnig.

Motion moved.

Under item 4, we now go on to Standing Order 17.42(vi) and (ix) to resolve to exclude the public from the remainder of this meeting and item 1 of the meeting on 11 March 2019. Are Members content to do so? We'll move now into private session for the remainder today and the first item of the next meeting. 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:06.

Motion agreed.

The public part of the meeting ended at 15:06.

Archwilio Cynulliad Cenedlaethol Cymru