Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

09/03/2020

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies AC
Dai Lloyd AC
David Melding AC
David Rees AC Cadeirydd y Pwyllgor
Committee Chair
Huw Irranca-Davies AC
Mandy Jones AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

David Henig Y Ganolfan Ewropeaidd ar gyfer yr Economi Wleidyddol Ryngwladol (ECIPE)
European Centre for International Political Economy (ECIPE)
Fabian Zuleeg Canolfan Bolisi Ewrop
European Policy Centre
Jeremy Miles AC Y Cwnsler Cyffredinol a’r Gweinidog Pontio Ewropeaidd
Counsel General and Minister for European Transition
Niclas Poitiers Bruegel
Bruegel
Piers Bisson Llywodraeth Cymru
Welsh Government
Simon Brindle Llywodraeth Cymru
Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Aled Evans Cynghorydd Cyfreithiol
Legal Adviser
Alun Davidson Clerc
Clerk
Claire Fiddes Dirprwy Glerc
Deputy Clerk
Nia Moss Ymchwilydd
Researcher

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 13:31.

The meeting began at 13:31.

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

Good afternoon. Can I welcome members of the public and Members to this afternoon's meeting of the External Affairs and Additional Legislation Committee? Can I remind Members the meeting is bilingual? If you require, therefore, simultaneous translation from Welsh to English, please use the headphones on channel 1. If you require amplification, then the headphones are available, but that's channel 0. Can I please remind Members to turn your mobile phones either off or on silent or any other electronic equipment that may interfere with the broadcasting equipment? There are no scheduled fire alarms this afternoon, so if one does occur, please follow the directions of the ushers to a safe location. Do any Members wish to declare an interest at this point in time?

2. Sesiwn graffu gyda’r Cwnsler Cyffredinol a’r Gweinidog Pontio Ewropeaidd
2. Scrutiny session with the Counsel General and Minister for European Transition

We move on to item 2 on the agenda, and this afternoon we have a session with the Counsel General and Minister for European Transition. Good afternoon, Minister. Can you, perhaps, introduce your officials for us, for the record, please?

Prynhawn da. I have Piers Bisson and Simon Brindle, who are both directors in the European transition team, Chair.

And we'd just like to note, obviously, your change of title, which was announced last week to reflect now the position we're in, which is that it isn't Brexit per se; leaving the EU has occurred and we're now in a transition period and discussions on the European transition, which, obviously, will feature very much in our questioning coming up. So, we're going straight into questions in that case. Alun first.

Diolch yn fawr. Y tro diwethaf roeddech chi yma, Weinidog, roeddech chi'n edrych ymlaen at y JMC(EN) oedd yn digwydd yng Nghaerdydd ddiwedd mis Ionawr, ac ar y pryd, cawsom ni sgwrs amboutu pa rôl fuasai Llywodraeth Cymru'n chwarae fel rhan o'r negodi rhwng Llywodraeth y Deyrnas Unedig a'r EU, ond roeddech chi'n edrych ymlaen at y cyfarfod hwnnw a dysgu beth oedd barn Llywodraeth y Deyrnas Unedig. Ddysgoch chi unrhyw beth pendant?

Thank you very much. The last time that you appeared before us, Minister, you were looking ahead to the JMC(EN) that was due to take place in Cardiff at the end of January, and at that time, we had a conversation about what role the Welsh Government would be playing as part of the negotiations between the UK Government and the EU. You were looking forward to that meeting, to hearing more about what the stance of the UK Government was. Did you learn anything specific in that meeting?

Wel, cawsom ni drafodaeth yn y cyfarfod hwnnw, fel rŷch chi'n sôn, ond os ydych chi'n edrych ar beth yw'r sefyllfa sydd ohoni heddiw, does gennym ni ddim rôl uniongyrchol yn y tîm negodi. Ond yn y broses o negodi'n ehangach, beth rŷm ni wastad wedi'i ddweud yw bod angen i'r JMC(EN) i fyw i fyny i'r cyfrifoldebau sydd gyda fe, hynny yw, darparu rôl i'r Llywodraethau datganoledig yn y negodiadau hynny. Dyw hynny ddim wedi digwydd. Dydym ni ddim wedi cael y rôl roeddem ni'n dymuno ei chael ac yn credu mai dyna'r rôl iawn i Lywodraeth Cymru. Dyw'r mandad a gafodd ei gyhoeddi yn y pythefnos ddiwethaf ddim yn adlewyrchu'r math o rôl buasem ni wedi dymuno gweld i'r llywodraethau datganoledig yn gyffredinol. Dyw Llywodraeth y Deyrnas Gyfunol ddim wedi gwrando ar y pwyntiau gwnaethom ni godi a'r Llywodraethau eraill godi. Rŷn ni eisiau bod yn adeiladol yn y broses hon. Felly, petasai Llywodraeth y Deyrnas Gyfunol yn newid ei safbwynt ynglŷn â rôl y Llywodraethau datganoledig, buasem ni'n barod i chwarae rôl adeiladol yn hynny.

Well, we had a discussion at that meeting, as you referred to, but if you look at what the situation is as it currently stands today, we have no direct role in the negotiation team. But as for the broader negotiating process, what we've always said is that the JMC(EN) needs to live up to the responsibilities that it has, which are to provide a role for the devolved Governments to play in those negotiations. That has not taken place. We have not been given the role that we would have wished to have and what we believe would be the appropriate role for the Welsh Government. The mandate that was published in the past fortnight is not a reflection of the type of role that we would have wished to see being given to the devolved administrations generally. The UK Government has not listened to the points that we've raised and that the other Governments have raised. Now, we want to be constructive in this process. So, should the UK Government change its position about the role of the devolved Governments, we would be very willing to play a constructive role in that part.

Ocê. Rydw i'n deall hynny—gwerthfawrogi hynny. Oes modd i chi fynd â ni trwy'r prosesau sydd wedi digwydd ers diwedd mis Ionawr? Achos dŷch chi'n dweud bod y mandad wedi'i gyhoeddi heb y fath o fewnbwn buasech chi wedi dymuno ei gael. Pa gysylltiadau sydd wedi bod rhyngddoch chi fel Gweinidog neu eich swyddogion gyda Llywodraeth y Deyrnas Gyfunol ers cyfarfod 28 Ionawr, a beth sydd wedi digwydd? Pa gyfleoedd ydych chi wedi eu cael i ddylanwadu ar safbwynt y Deyrnas Unedig neu yn well, wrth gwrs, i gydweithio gyda Llywodraeth y Deyrnas Unedig i siapio y mandad ei hun?

Okay. I understand and appreciate that, but could you take us through the processes that have occurred since the end of January? Because you say that the mandate was published without the kind of input that you would have wished to have had. But what links have been forged between you, as Minister, or your officials, with the UK Government, since the meeting on 28 January, and what has happened? What opportunities have you had since then to influence the UK Government's position, or even better, what opportunities have you had to collaborate with the UK Government to shape the mandate itself? 

13:35

Ar ddechrau mis Chwefror, wrth gwrs, mi wnaeth y Prif Weinidog yn San Steffan araith ar amcanion cyffredinol Llywodraeth y Deyrnas Gyfunol yn y broses negodi. Chawson ni ddim gweld o flaen llaw gynnwys y datganiad hwnnw, felly wrth ein bod ni'n symud trwy fis Chwefror, roedd cysylltiadau ar lefel swyddogol i drafod amryw o bethau, ond chawson ni ddim gweld y mandad drafft tan ychydig ddiwrnodau cyn iddo fe gael ei gyhoeddi. Fe gawson ni fe, dwi'n credu, ar y dydd Gwener cyn—y bwriad oedd i'w gytuno fe yn San Steffan ar y dydd Mawrth.

Gwnaeth y Prif Weinidog, yn y cyfamser, rhwng gweld y mandad a chyfarfod y JMC(EN), ysgrifennu at y Prif Weinidog i bwysleisio ein blaenoriaethau ni. Ar ôl i ni gael cyfle i weld y mandad drafft ar y dydd Gwener, mi wnes i ysgrifennu at Michael Gove i ymateb i'r mandad drafft, ar y dydd Llun, dwi'n credu. Ac wedyn, ar y bore dydd Mawrth, cafwyd trafodaeth weinidogol rhyng-lywodraethol gyda'r Llywodraethau datganoledig a gyda Michael Gove, a hefyd Penny Mordaunt, y Paymaster General, sydd yn cefnogi gwaith Michael Gove yn hyn o beth, i drafod y mandad.

Ond fel roeddwn i'n dweud, y bwriad oedd bod Llywodraeth San Steffan yn cytuno'r mandad yn hwyrach y diwrnod hwnnw. Felly gwnes i ofyn beth yn y mandad, o safbwynt Llywodraeth y Deyrnas Gyfunol, oedd wedi newid ar sail rôl a chyfraniadau'r Llywodraethau—Llywodraeth Cymru yn fy achos i—a chafodd dim ei bwyntio allan, a ges i ddim sicrwydd ychwaith y byddai newidiadau sylweddol yn digwydd yn sgil y drafodaeth roeddem ni'n ei chael y bore hwnnw a'r cyfathrebu yn y cyfamser.

At the beginning of February, of course, the Prime Minister did set out in Westminster what the general objectives of the UK Government were in the negotiation process. We didn't see the contents of that statement beforehand, so as we proceeded through February, the links were made; there were contacts on an official level to discuss various topics, but we didn't get to see the draft mandate until a few days before it was made public. I believe that we had it on the Friday, and the intention was for it to be agreed at Westminster on the Tuesday.

In the meantime, between seeing the mandate and the JMC(EN), the First Minister wrote to the Prime Minister to emphasise our priorities. After we had an opportunity to see that draft mandate on the Friday, I wrote to Michael Gove to respond to the draft mandate. I believe that was on the Monday. And then, on the Tuesday morning, we had an inter-governmental ministerial discussion with the devolved Governments and with Michael Gove present, and also Penny Mordaunt, the Paymaster General, who supports Michael Gove's work in this regard, to discuss the mandate.

But as I said, the intention was for the UK Government to agree that mandate later that day. So I asked what in the mandate, from the UK Government's point of view, had changed on the basis of the role and contributions of the Governments—the Welsh Government in my case—and nothing was pointed out to me, and neither was I given any assurance that there would be substantial changes as a result of the discussion that we were having that morning and the communications in the meantime.

So, i fod yn glir fy mod i ddim wedi'ch camddeall chi: mae Llywodraeth Cymru wedi trio ysgrifennu at Lywodraeth y Deyrnas Gyfunol, er mwyn gosod mas a disgrifio safbwynt Llywodraeth Cymru. Dŷch chi wedi gwneud hynny, ond does dim proses, strwythur, mewn lle, sy'n galluogi'r Llywodraethau, yn y rownd, i ddod i drafod naill ai y mandad neu'r broses o negodi, a does dim fforwm sy'n cyfarfod er mwyn penderfynu beth ydy safbwynt Llywodraeth y Deyrnas Gyfunol. So, does dim proses mewn lle.

So, for me to be clear that I understand what you're saying: the Welsh Government has tried to write to the UK Government to try to set out and describe its position. You've done that, but there's no process or structure in place that enables the Governments in the round to come together to discuss either the mandate or the negotiation process, and there is no forum that meets in order to decide what the position of the UK Government is. So, there is no process in place.

Na. Rwy newydd ddisgrifio proses y mandad i chi. Dyna'r broses wnaeth—.

No. I've just described the process in relation to the mandate, and that was how— .

Ond proses fewnol yn Llundain roeddech chi'n ei disgrifio.

But that's an internal process in London. That's what you described.

Roedd yna PR, basically. Os ydyn nhw'n gofyn i chi beth ydy eich barn chi y bore cyn eu bod nhw'n cyhoeddi'r mandad, mae'n amlwg eu bod nhw ddim yn mynd i gymryd lot o sylw ohoni hi.

There was PR, basically. So, if they ask what your opinion is the morning before they publish the mandate, well, it's clear that they're not going to pay a great deal of attention to your response.

Dwi ddim yn credu ein bod ni wedi cael ymateb i'r ddau lythyr a aeth gan y Prif Weinidog yma a gennyf i, hyd yn hyn, yn ymateb mewn manylder i'r pwyntiau gafodd eu codi. Mae'r newidiadau yn y mandad a ddaeth allan o'r broses honno, newidiadau ymylol iawn y buasen i'n eu disgrifio nhw, yn sgil y cyfathrebu a fuodd. O edrych ymlaen, wrth gwrs rŷn ni wedi galw am broses sydd yn ein cynnwys ni, ac egwyddor elfennol, sydd hefyd yn bwysig—mae'r broses yn bwysig, wrth gwrs ei bod hi, ond mae'r egwyddor yn bwysig—hynny yw, beth yw pwrpas y broses? A'r egwyddor rŷn ni wedi bod yn galw amdani hi yw bod Llywodraeth y Deyrnas Gyfunol ddim, ar y cyfan, yn mynd rhagddyn nhw gyda safbwynt ar fater sydd wedi ei ddatganoli heb gael cytundeb y Llywodraethau. Rŷn ni wedi trafod hyn yn y fforwm hwn. Dyw'r egwyddor yna ddim wedi cael ei chytuno. Rwy'n cwrdd yfory gyda Gweinidogion o Lywodraethau yr Alban a Gogledd Iwerddon. Rŷn ni wedi gwahodd Gweinidogion o Lywodraeth y Deyrnas Gyfunol hefyd i roi update i ni, ac i ni hefyd drafod, fel Llywodraethau datganoledig, beth rŷn ni eisiau allan o'r broses gyda'n gilydd.

I don't think we've received a response to the two letters, the one from the First Minister and the one from myself, as yet, responding in detail to the points that we raised. And the changes in the mandate that came out of that process are very marginal changes—that's how I'd describe them—as a result of the communication that took place. Looking forward, we have called for a process that includes us, and an essential principle, which is also important—the process is important, of course it is, but the principle is important—that is, what is the purpose of this process? And the principle that we've been calling for is that the UK Government should not proceed with a position on an issue that has been devolved without receiving the agreement of the devolved Governments. We've discussed that in this forum. That principle has not been agreed. I'm meeting tomorrow with Ministers from the Northern Ireland and Scottish Governments and we've invited UK Ministers to that meeting to give us an update, and for us also to be able to discuss, as devolved Governments, what we want out of the process together.  

13:40

Dyna, wrth gwrs, fy nghwestiwn nesaf i. Dŷch chi wedi disgrifio'r berthynas a'r broses o gyfathrebu rhwng y Llywodraeth fan hyn a'r Llywodraeth fan draw, ond, ydych chi wedi cael trafod—rŷn ni'n cymryd eich bod chi wedi—gyda'r Llywodraeth yn Belfast ac yng Nghaeredin? So, dŷch chi'n dod i fan hyn, ydych chi'n gwybod a oes yna gynrychiolydd o Lundain yn dod? 

Well that, of course, was my next question. You've described the relationship and the process of communication between Government here and Government in another place, but have you had discussions—and I take it that you have—with the Governments in Belfast and Edinburgh? So, you're coming here, do you know whether there will be a representative from London present there? 

Dwi ddim yn gwybod ar hyn o bryd. Na, ond mae—

I don't know as yet. 

Ocê. So mi fydd tair Llywodraeth, o leiaf, yn cyfarfod. Oes modd ichi ddisgrifio beth sydd ar agenda'r cyfarfod yna? 

Okay. So there'll be three Governments, at least, meeting. Could you describe what is on the agenda of that meeting? 

Wel, trafod—. Mae'n amser addas, rŷn ni'n credu, ar ôl wythnos gyntaf y trafodaethau ym Mrwsel, fod cyfarfod gweinidogol wedi'i drefnu i drafod beth sydd wedi digwydd a'r broses hyd yn hyn, a bod gyda ni fforwm i allu gwneud hynny. Felly, dyna'r bwriad oedd cael cyfle i gwrdd yn weinidogol i drafod hynny, a hefyd, fel roeddwn i'n ei ddweud, i drafod beth yw ein disgwyliadau ni am y broses o ran Llywodraethau datganoledig yn y dyfodol. Yr hyn sydd yn gwbl elfennol, fuasen i'n ei awgrymu, yw ein bod ni'n symud y tu hwnt i ryw fath o ddiweddariad ar lafar fel bod gyda ni adroddiad. Mae pawb, wrth gwrs, yn deall bod angen gweithio'n gyflym ac mewn ffyrdd hyblyg—wrth gwrs mae hynny'n anorfod yn y broses gymhleth hon—ond mae angen rhywbeth, adroddiad ar bapur gydag esboniad o'r trafodaethau yn fras, a beth yw'r dewisiadau ar gyfer y rownd nesaf, a wedyn cyfle i'r Llywodraethau allu ymwneud â hynny. 

Well, it's an appropriate time, we believe, after the first week of the discussions in Brussels, to have a ministerial meeting and for that to discuss what has happened in the process thus far, and for us to have a forum to undertake that. So, the intention was to have an opportunity to meet as Ministers to discuss that, and also, as I said, to discuss what our expectations are for the process in terms of devolved Governments for the future. What is entirely fundamental, I would suggest, is that we move beyond some sort of oral update so that we have a report. Now, everyone understands that there is a need to work rapidly and in a flexible manner—that's inevitable in a complicated process such as this—but there is a need for a written report with an explanation of the negotiations broadly, and then options for the next round that's coming up, and then an opportunity for the Governments to consider those. 

Dwi wedi darllen y datganiad gan y Comisiwn Ewropeaidd ac maen nhw'n glir iawn am beth ydy'r meysydd y maen nhw eisiau eu trafod, ac ym mha drefn, a phryd maen nhw eisiau cyrraedd cytundeb. Fel enghraifft, ar fater polisi pysgodfeydd, maen nhw eisiau cytundeb ar ddiwedd mis Mehefin. Nawr, os ydyn ni'n rhoi popeth arall o'r neilltu ar hyn o bryd sy'n digwydd, mae'n anodd iawn gweld sut y gall Llywodraeth y Deyrnas Gyfunol ddod i gytundeb ar fater datganoledig yn ystod y misoedd nesaf, os nad oes yna broses neu strwythur sy'n bodoli i gynnwys barn y Llywodraethau sy'n gyfrifol, yn gyfreithlon, am y mater polisi hwnnw. 

I have read the statement by the European Commission and they're very clear about what the areas that they want to discuss are, and in what order, and when they want to reach agreement. As an example, on fisheries policy, they want an agreement by the end of June. Now, if we set everything else aside, it's very difficult to see how the UK Government can come to an agreement on a devolved issue over the coming months, unless there is a process or a structure in existence to include the opinions of the Governments that are legally responsible for that policy.

Mae'r maes pysgodfeydd, wrth gwrs, yn un sydd yn greiddiol i'r holl beth o ran y sialens rŷch chi'n ei disgrifio. Hynny yw, mae safbwyntiau gwahanol, a gyda llaw, mae safbwyntiau ychydig yn wahanol gyda'r Llywodraethau datganoledig hefyd—dyw e ddim fel petai gennych chi un safbwynt ar gyfer San Steffan, ac un safbwynt cytûn gyda phawb arall. Mae'n amlwg bod blaenoriaethau ychydig yn wahanol ym mhob rhan o'r Deyrnas Gyfunol. Dyna pam mae angen proses sydd yn caniatáu'r pethau hynny i gael eu trafod, nid jest mewn ffordd bilateral, ond mewn ffordd quadrilateral. 

The area of fisheries is something that is crucial to the entire challenge, as you describe it. Now, there are varied viewpoints; for example, the devolved Governments have different viewpoints—it's not as if there is one viewpoint coming from Westminster, and one agreed position coming from everywhere else. It's obvious that the priorities are slightly different in all parts of the UK, and that is why we need a process that enables those issues to be discussed, not just in a bilateral way, but in a quadrilateral way. 

Ac mae hyn, wrth gwrs, yn dra gwahanol i beth fuasai minnau a Huw yn ei gofio o'r trafodaethau gyda'r Comisiwn a gyda'r Undeb Ewropeaidd—gwahanol iawn, iawn. 

And that, of course, is very different to what Huw and I would remember in terms of discussions with the Commission and the European Union. 

Wel, dŷch chi'n gwneud pwynt teilwng iawn, os caf i ddweud? Hynny yw, dyw'r peth rŷn ni'n ei amlinellu ac yn ei ddisgrifio ddim yn rhywbeth sydd yn newydd, a dweud y gwir, fel rŷch chi wedi cael profiadau eich hunain o fod o fewn cyd-destun lle mae'r pedair Llywodraeth yn trafod ar y cyd ac mae un o'r Llywodraethau—yn y gorffennol mae Llywodraeth Cymru wedi arwain ar hynny. Mae'r broses yna yn broses sydd wedi'i sefydlu ers sbel fel rhan o'r Undeb Ewropeaidd. 

Well you make a very worthy point there—a very valid point. What we've outlined and described is not something novel, you've had experience yourselves of being part of a context where the four Governments are jointly discussing, and one of the Governments—in the past, the Welsh Government has led on that. That process is one that has been established for a long period of time as part of the European Union. 

Dwi yn cofio, Gadeirydd, Michael Gove yn trafod hyn gyda ni yn ystod ein sesiwn gyda fe. Mi fuasai'n hwylus cael ailedrych ar y transcript o hynny fel pwyllgor, ond does gen i ddim fwy o gwestiynau ar hyn. 

I do remember, Chair, Michael Gove discussing this with us during the session that we had with him. It would be useful to relook at the transcript of that meeting as a committee, but I don't have any further questions at the moment. 

Thank you. Just one question before I move on to Dai Lloyd. We've very much talked about, and Alun's talked about the role of the Welsh Government in the negotiations, and then particularly producing the mandate. But, do we have an indication as to what the role of the Welsh Government's involvement will be in the joint committee, which will be established as well? Well, they're slightly separate. 

They are separate. Well, there are two aspects to the joint committee, of course. One is the joint committee in relation to the implementation of the withdrawal agreement and, as we know, most of the areas that deals with are reserved areas. So our proposal for that is that the JMC(E) forum, which has met in advance of European Council meetings to discuss the perspectives of all four Governments going into that Council, ought to be the mechanism—or a similar kind of forum, effectively—ought to be the mechanism going forward for devolved Governments' perspectives to be taken into account in the work of the joint committee. But then there'll be a new iteration of the joint committee in the future when the future partnership has been settled one way or another. And, in that respect, for that future joint committee, I would anticipate that we need a much larger role, because there'll be areas in that relationship that directly engage devolved competencies. 

13:45

There are two points to be made on that: (1) they're your proposals, have you had any feedback on those proposals, and (2) do you have any confidence that, based upon your experience to date, the devolved Governments would be involved in that joint committee post transition period? 

That remains to be seen, doesn't it? We wish that to be the case and we will continue to make the case for that. In relation to, 'Has there been a commitment to transform the JMC(EN) to a forum that does that?' At this point, no, there hasn't. 

And you very cleverly answered that that's your hope. I asked the question: do you have confidence that the joint committee and the role of the devolved Governments in that joint committee post transition will be—? Based upon your experience to date, do you have confidence that you can actually turn the UK Government into a situation where they accept the importance of the role of devolved institutions in that process? 

Well, they haven't fully done that to date, Chair, and we've put forward reasonable proposals that we feel are commonsensical and defensible as a matter of principle. They haven't actually been something that has been resisted formally, in terms of giving reasons as to why that would not be the way forward. It just hasn't happened, if you like. So—

Yes, but, equally, I just want to be clear that that will be something that we wish to take forward. 

Ie, diolch, Gadeirydd. Wel, yn parhau efo'r un un thema, a dweud y gwir, o'ch ymateb chi fel Llywodraeth i gynigion negodi'r Deyrnas Unedig, dŷch chi wedi'i gwneud hi'n glir mewn atebion i gwestiynau gan Alun Davies na wnaethoch chi dderbyn unrhyw ymgynghori yn nhermau cyn cyhoeddi'r cynigion terfynol gan y Deyrnas Unedig—hynny yw, doedd eich mewnbwn chi ddim yn cael ei adlewyrchu yn beth a ddaeth allan yn y cynigion hynny. Allaf i ofyn yn fwy cyffredinol, efallai, i chi esbonio pam yn hollol nad yw Llywodraeth Cymru'n cefnogi'r safbwynt a amlinellir gan Lywodraeth y DU yn gyffredinol? 

Yes, thank you, Chair. Well, continuing with the same theme in terms of your response as a Government to the UK negotiation proposals, you've made it clear in response to questions from Alun Davies that you didn't have any consultation before receiving the final proposals by the UK Government, so your input wasn't reflected in what came out of those proposals. But can I ask more generally, perhaps, for you to explain why the Welsh Government doesn't support the position outlined by the UK Government?

Wel, dŷn ni ddim yn credu ei fod e'n ddigon uchelgeisiol o ran gofalu am fuddiannau Cymru. Mae'n trafod mewn geirfa masnach rydd, ond mae'n creu rhwystredigaethau newydd i fasnach rydd, mewn gwirionedd. Mae'n rhywbeth sydd yn dod, buaswn i'n ei ddweud, ar garlam oherwydd bod amserlen wedi'i gosod sydd ddim yn caniatáu—wel, sydd ddim yn blaenoriaethu cael cytundeb sydd yn gweithio, ond sy'n blaenoriaethu cael gadael ar bwynt arbennig. Buaswn i'n dweud ei fod e'n rhoi ideoleg uwchben buddiannau economaidd Cymru—hynny yw, y syniad yma o sofraniaeth sydd, buaswn i'n dweud, yn y byd sydd ohoni, yn gwbl ffuglennol, a dweud y gwir, a dyw'r rôl sydd wedi'i rhoi i ni o fewn hynny ddim yn ddigon. Felly, mae amryw o resymau dyw cynnwys y mandad ddim yn adlewyrchu buddiannau economaidd nac ehangach Cymru, fuaswn i'n datgan. 

Well, we don't think it's ambitious enough in terms of protecting the interests of Wales. It discusses issues in the vocabulary of free trade, but it creates new difficulties for free trade, if truth be told. It's something that's coming at haste because a timetable has been set that doesn't prioritise getting an agreement that works, but rather prioritises leaving at a particular point in time. I would say that it puts ideology above the economic interests of Wales—so, this idea of sovereignty is, I would say, in the world as it is, something that's pure fiction and the role that's given to us within that is not sufficient. So, there are various reasons why the content of the mandate does not reflect the economic interests and the wider interests of Wales. 

Diolch yn fawr am hynna. Ac, ymhellach i hynna, allwch chi amlinellu'ch barn ynglŷn â chanlyniad tebygol terfynol y negodiadau rhwng y Deyrnas Unedig a'r Undeb Ewropeaidd? Lle, ydych chi'n credu, fydd y pwynt terfynol a beth fydd y canlyniad? 

Thank you very much for that. And, further to that response, could you outline your views on what the likely end point of the negotiations between the UK and the EU will be? Where do you think we will be at the end of this process?
 
 

Wel, y peth cyntaf i'w ddweud yw, beth hoffwn i ei weld yn digwydd yw bod Llywodraeth y Deyrnas Gyfunol yn llwyddo i gael cytundeb sydd yn gwarchod buddiannau'r Deyrnas Gyfunol a Chymru; dyna hoffwn i ei weld yn digwydd. O edrych ar y sefyllfa heddiw, efallai mae tri opsiwn. Yr opsiwn cyntaf yw bod Llywodraeth y Deyrnas Gyfunol yn newid ei safbwynt ar hyn maen nhw wedi'i ddweud yw eu blaenoriaethau nhw ar hyn o bryd, fel y gwnaethon nhw, a dweud y gwir, yn y broses o gael cytundeb ymadael—hynny yw, gosod darlun o'r hyn roedden nhw eisiau ei weld, ond, erbyn diwedd y dydd, cytundeb gwahanol iawn. Petasai hynny'n digwydd, gallai fe fod mewn sefyllfa lle mae'r cytundeb yn edrych lot yn fwy positif nag rydym yn ei ddisgwyl. Fuaswn i ddim yn dweud bod hynny'n debygol iawn. Yr ail opsiwn yw bod Llywodraeth y Deyrnas Gyfunol yn sticio i'r hyn maen nhw wedi'i ddweud yw eu blaenoriaethau nhw ac, wrth gwrs, bod yr Undeb Ewropeaidd yn gwneud yr un peth—hynny yw, y level playing field a'r pysgodfeydd ac ati—a bod hynny'n gadael sefyllfa lle nad oes cytundeb; mae hynny'n edrych yn fwy tebygol nag y dylai fe edrych ar hyn o bryd, buaswn i'n ei ddweud. A'r trydydd opsiwn, efallai, yw bod Llywodraeth y Deyrnas Gyfunol yn sticio i'r lle maen nhw, a bod yr Undeb Ewropeaidd yn symud ymhellach ar hyd y llwybr, a wedyn bod gyda ni rhywbeth sy'n edrych yn debycach i'r hyn mae Llywodraeth y Deyrnas Gyfunol yn ei ddisgrifio nawr fel y math o ddêl maen nhw eisiau ei chael allan o'r broses yma. Ond buaswn i'n dweud, i fod yn glir, ei bod hi'n edrych fel Brexit caled, a dweud y gwir—hynny yw, lot llai o gydweithredu ar faterion o ran cyfiawnder ac ati, yn rhyngwladol, a'r impact economaidd rŷn ni wedi'i drafod sawl gwaith yn y gorffennol. 

The first thing to say is that what we'd like to see is for the UK Government to succeed in getting an agreement that safeguards the interests of the United Kingdom and of Wales; that's what we'd like to see happen. But, looking at the situation as it currently exists, there are possibly three options, the first being that the UK Government changes its position in terms of what it's said its current priorities are, as they did, frankly, in the process of getting the withdrawal agreement—that is, they set out a picture of what they wanted to see, but, ultimately, the agreement was very different to that. Now, if that could happen, it's possible that the agreement would look much more positive than we're expecting. I wouldn't say that that's very likely. The second option is that the UK Government sticks to what they've said their priorities are and, of course, the EU then do the same thing, in terms of the level playing field and fisheries and so on, and that could lead to a situation where there would be no agreement. That does look more likely than it should currently look, I would say. The third option, possibly, is that the UK Government sticks to their guns, and the EU moves further along in that direction, and then we'd have something that looks more like what the UK Government is currently describing as the type of deal that they would like to get out of this process. But I would say, to be clear, that it looks a hard Brexit, in truth, with much less collaboration on issues such as justice and so on internationally, and the economic impact that we've discussed many a time.

13:50

Diolch am hynna. Yn eich datganiad ysgrifenedig, dŷch chi wedi dweud bod methiant Llywodraeth y Deyrnas Unedig i wrando ar bryderon y Llywodraethau datganoledig yn golygu y bydd yn mynd i'r negodiadau Brexit 'ar ei ben ei hun'. Allwch chi gadarnhau beth ydych chi'n credu byddai goblygiadau o'r Deyrnas Unedig, yn sylfaenol, yn mynd ar ei phen ei hun os nad yw'n gwrando ar y Llywodraethau datganoledig? 

Thank you for that. In your written statement, you state that the UK Government's failure to listen to the concerns of the devolved Governments means that it will enter the Brexit negotiations 'alone'. So, can you clarify and confirm what you believe the consequences of this are in terms of the UK Government going into these negotiations alone if it doesn't listen to the devolved Governments? 

Wel, y peth cyntaf i'w ddweud yw ei fod e'n colli ar gyfle, onid yw e, i Lywodraeth y Deyrnas Gyfunol allu mynd i mewn i'r trafodaethau yna yn dweud bod ganddyn nhw gydsyniad pedair Llywodraeth yn y Deyrnas Gyfunol. Felly, maen nhw wedi colli'r cyfle hwnnw. Yn fy marn i, ym marn Llywodraeth Cymru, mae hynny'n golled bwysig. Mae elfen hefyd o beth sydd yn gredadwy yn y trafodaethau yma. Maen nhw'n mynd i fynd i mewn i'r trafodaethau yma a dyw e ddim yn sicr bod gyda nhw gytundeb gan y Llywodraethau bydd gofyn iddyn nhw allu gwneud yn sicr bod y cytundebau yma'n gweithio mewn ffordd ymarferol ar lawr gwlad. Nawr, dyw hynny ddim yn synhwyrol o safbwynt strategol. Dyw e ddim yn synhwyrol o ran hygrededd negodi Llywodraeth y Deyrnas Gyfunol yn y broses honno, oherwydd mae ein partneriaid Ewropeaidd ni, wrth gwrs, yn deall i'r dim mai dyna'r trefniant cyfansoddiadol o fewn y Deyrnas Gyfunol. Felly, beth ddylai fod wedi digwydd yw bod proses o gytuno'r pethau yma. Yn sgil hynny, dŷn ni ddim yn mynd i fod mewn sefyllfa o ddweud—. Dwi ddim, ar ran Llywodraeth Cymru, yn moyn bod yn rhan o ryw fath o window dressing ar gyfer hyn. Os nad oes rôl yn y broses, a dŷn ni ddim yn credu bod hyn yn fuddiannau Cymru, byddwn ni'n dweud hynny'n glir. 

Well, the first thing to say is that it's missing out on an opportunity here for the UK Government to be able to go into those negotiations saying that they have the agreement of the four Governments of the UK. So, they've missed that opportunity. In my view, and the view of the Welsh Government, that is an important loss. There's also an element of what's credible within these negotiations. They're entering into these discussions and it's not certain they have the agreement of the Governments that will be required to ensure that these agreements work practically on the ground. Now, that's not sensible, looking at it strategically. It's not sensible in terms of credibility in the way that the UK Government is negotiating, because our European partners fully understand that that is the constitutional settlement within the UK. So, what should have happened was that there should have been a process of agreeing these things. As a result, we're not going to be in a position to able to say—. I don't want, on behalf of the Welsh Government, to be a part of any window dressing for this. If we don't have a role in the process, and we don't believe that this is in the interests of Wales, well we will be saying so and we'll do so clearly. 

Fy ngwestiwn olaf i, Cadeirydd, a dŷch chi'n rhannol wedi ateb hwn i gwestiwn blaenorol gan Alun Davies: allwch chi amlinellu beth fydd camau nesaf Llywodraeth Cymru mewn ymateb i safbwynt Llywodraeth y Deyrnas Unedig? Beth sy'n digwydd o hyn ymlaen, felly? 

My final question, Chair, and you've partly answered this in response to a previous question from Alun Davies: could you outline what the next steps that the Welsh Government will be taking are in response to the UK Government’s position? What happens from now on? 

Wel, fel dwi'n dweud, mae cyfarfod yfory rhwng o leiaf tair o'r pedair Llywodraeth, ac rŷn ni wedi'i ddweud, er ein bod ni'n agored fel Llywodraeth i Lywodraeth y Deyrnas Gyfunol ddweud, 'Dyma broses sydd yn eich cynnwys chi ac sydd yn caniatáu ceisio cytundeb ar faterion sydd yn effeithio ar bethau sydd wedi datganoli'—. Rŷn ni'n agored i hynny, ac os bydd cyfle i wneud hynny, byddwn ni—fel rydyn ni wastad wedi bod—yn gweithio mewn ffordd adeiladol, a lle bo'n bosib, yn gydweithredol yn hynny. Os ydy Llywodraeth y Deyrnas Gyfunol eisiau parhau i'n cadw ni tu allan i'r broses honno, byddwn ni'n ffeindio ffyrdd eraill o geisio dylanwadu; dŷn ni ddim yn mynd i stopio gwneud hynny. Felly, byddwn ni'n cymryd cyfleoedd i gael cyfarfodydd gweinidogol pan fo'r cyfleoedd hynny'n codi. Rŷn ni wedi, wrth gwrs, bod i ryw 22 neu fwy o gyfarfodydd y JMC(EN); rŷn ni wedi cyhoeddi 10 Papur Gwyn. Felly, bydd y broses honno o geisio ffyrdd eraill o ddylanwadu'n bwysig. Wrth gwrs, hefyd, cyfarfodydd rhwng swyddogion yn y Llywodraethau—mae hynny'n mynd i barhau. 

Well, as I said, we're going to have a meeting that will be held tomorrow between at least three of the four Governments, and we've said that we're open, as a Government, for the UK Government to state, 'Well, this is a process that will include you and will enable us to seek agreement on issues that affect devolved issues.' We're open to that and if there's an opportunity for that to happen we will be—as we've always have been—working in a constructive manner and, where possible, collaboratively. If the UK Government wants to continue to keep us outside of that process, then we will find other ways of trying to influence it; we're not going to stop doing that. We will take any opportunity to have ministerial meetings when those opportunities arise. We have, of course, been to 22 or more JMC(EN) meetings; we've published 10 White Papers. So, that process of seeking other means of influencing will be important. And, of course, official meetings in the Governments will continue. 

Minister, would I be right in saying that, from a European negotiating position, from their side of the table, whilst they may indeed understand how complex this is in terms of UK inter-Government relations and what that means constitutionally in the UK, actually, as long as they have a voice at the table represented by a person who purports to be the UK Government, they'll negotiate with that person. The reason I mention this is because it's an odd thing, sitting here within the committee, with the frustration that you clearly have, but actually knowing that, from the EU perspective, that person sitting in front of them is the UK and, if it doesn't reflect the Scottish voice, or the Welsh voice, or whatever, it doesn't matter because that's the one. 

Well, it is frustrating and there have been examples where inter-governmental arrangements have worked. There have been—. We've discussed in this committee, haven't we, when I've been here before, that the legislative work, the statutory instruments, even the work of preparation, really, over time had got to a place where there was a functioning, working relationship. So, it is possible to put in place sensible arrangements, which is why it is frustrating that, having put forward what we feel are sensible, commonsensical proposals for engagement, they haven't been as yet responded to. I think I'd make the distinction between being in the room for the negotiations and being a proper part of the negotiating process. We haven't said, 'It is essential that we are leading these negotiations or are in the room.' There are times when that will be sensible, but actually what we want to see is a negotiating process and framework that legitimately engages the devolved Governments on devolved related matters and has at its heart that principle of not proceeding without agreement, other than in exceptional circumstances. Those things actually, I think, are probably more valuable in a sense than who's sitting in the chair, provided that has been abided by as a set of agreed processes.

13:55

Well, I'm really interested in your caution, pessimism, in terms of your response to the Chair in his previous questioning, because, if from here on there is real engagement with the process, and you're part of it and you can see the voice of Wales, the voice of Scotland, and others being reflected within the process going forward—. And that's great. But I guess my point is, from the EU perspective, they might, when they sit down over a quiet brandy in the evening, want to see that there's a joined-up view of all the UK nations underneath the UK voice. But if the UK voice says, 'Here we are; this is the state of play,' and you're not reflected, and Scotland isn't reflected, and Northern Ireland isn't reflected, it's a 'so be it', isn't it? Because, at that point, they'll just proceed with—. 

There are two parties to the negotiation, and one of them is the European Union and one of them is the UK Government. So, that is established. What I think the practical outturn, though, of the process that the UK Government has chosen to follow in this case is is that we will feel less constrained about being publicly very clear where those negotiations do not reflect the interests of Wales. Because, if we haven't—. And that is why, in a sense, it's a missed opportunity, because we have never said, actually, as a Government, 'This ought to be something over which we have a veto.' We don't think that's the appropriate response to the situation, but we do think there is a commonsense way of engaging the devolved Governments. In the absence of that—. If we are not in that process then we will be clear when we think this is not in the interests of Wales. 

Minister, before we move on to something else, you have clearly undertaken an analysis of the UK mandate—that's why you make your statement as to why the Welsh Government believes this is not appropriate for Wales. I'm assuming you've done an analysis of the EU position. In your previous answer, in your answer to Dai Lloyd, you highlighted the situation relating to the options that may become available as the likely end point. Based upon your analysis and based upon your experiences—. I appreciate things can change, but where do you see these actual negotiations going? Because you know that there are red lines on both sides, and we know how people move off those lines; you know how the two sides have worked in the EU withdrawal agreement. Is there a possibility of a solution by the end of this year, in reality, or are we facing a situation where, if the UK Government continues its position on no extension of the transition period, we are in a position where we're likely to have a 'no deal' exit on 31 December? 

Well, you know, the timescales are obviously very challenging, aren't they? And the prospects for reaching the kind of deal that we've been describing sitting here today don't look very promising. The time frame in which this is being delivered or driven—that's an essential component of the reason that we're in this situation. Because, if you look at the mandate from the UK's point of view, what that fixation, really, with the end of the transition period has led the UK Government, in a sense, to have to do is to try and find a sort of cut-and-paste deal, looking at the little bits of agreement here and there and saying, 'Well, we'd like that little bit, that little bit, that little bit'—a precedent-based approach. But the complexity of the relationship between the European Union and a former member state is clearly not going to be addressed by looking at bits of precedent here, there and elsewhere. There isn't a precedent, really, that describes the kind of relationship that even the UK Government is looking for, let alone what others, including ourselves, would look for. And I think there's a bit of a risk, isn't there, that people think, 'Well, you know, at the end of the day, if the 1 July time point has passed, well if we're coming to the end of the year and an agreement looks likely, I'm sure it'll be straightforward to find an extension at that point.' It seems to me that that isn't at all a likely scenario, not least because even if the political will was there, which nothing suggests that that is the case today certainly, the practicalities of a third country—which is the UK in this situation—having that sort of arrangement ratified by the current member states of the EU in that sort of time frame seem, even if politically possible, practically surely almost impossible. 

14:00

Okay. We appreciate that there are two sides to these negotiations between the UK Government and the EU, and as you've already highlighted at some points you feel as if the UK Government is not acting on some of things you are saying in your request for a mandate. Nicola Sturgeon has actually met with the EU negotiating side. Is the First Minister or yourself going to be having meetings with Michel Barnier to make sure that the Welsh position is understood, that you understand what the EU position is and that the EU understands the Welsh interests, and what's at stake in all of this? 

We continue our engagement with the European Commission, European institutions, as we have. The fact that there's a negotiation between the UK and the EU does not mean that there isn't contact, obviously, between devolved Governments and the EU institutions. But, just to be clear, that does not, I think, replace what we are suggesting is the right way of doing this, which is a sensible mechanism for engaging the devolved Governments appropriately. 

I appreciate that the sensible mechanism is with the UK Government, but it is important, I think, that we have confidence that the Welsh Government is also ensuring that they understand the EU negotiating position, and the EU understands the Welsh strengths and interests as well.

You were just saying earlier about the UK Government not engaging with the Welsh Government and that. Haven't the Welsh Government's devolved competencies, you know, the ones you were talking about, been put in the freezer, so to speak? 

You know the competencies—. You said the devolved things, the devolved competencies. In the beginning, didn't the UK Government co-ordinate with the Welsh Government to put certain things in the freezer? 

No. I think you might be referring to the inter-governmental agreement in relation to the competencies, and no section 12 regulations, which are the freezing regulations, none of those have been made, actually. 

Right okay. All right, thank you. Is the Welsh Government considering different options and scenarios as to what the future relationship with the EU will look like and, if so, how is it preparing for each option? 

Well, yes. There is—. It's challenging, I think I should put it like that, in terms of preparing for post-transition scenarios. What I would say is that at this point in time, there's actually very little information coming out of the UK Government in relation to preparedness for a post-December world—whatever that looks like. I think perhaps the demise of the Department for Exiting the European Union may have had something to do with that. As a Government, despite working in that vacuum, if you like, it's incumbent on us to take those preparatory steps, and the Cabinet sub-committee on European transition and trade obviously looks at questions of preparedness when it meets. 

Okay. So what preparations are being made for each scenario if the UK exits the transition without a trade deal? 

Look, if we are leaving with the sort of deal the negotiating parameters disclosed by UK Government are aiming for, or leaving with no trade deal, there are obviously significant preparedness implications, aren't there? Because that's looking at many of the sorts of scenarios we were looking at last year when there was a prospect of leaving with no deal at all. So, there are questions of friction at ports, customs requirements, police and judicial co-operation—all those issues then become live again and much of the work that we have done in terms of preparing for a 'no deal', well some of that will need to be reused in that kind of scenario, because many of the features will be similar in that sort of hard Brexit deal. 

So they're not ongoing; you have stopped them and you're going to have to restart them if it looks like that after July.

Well, it's not a question of waiting until July. Clearly, we keep an eye on the development of the negotiations in real time. But, you know, in the period when you're focusing on seeking to influence negotiations then you dedicate some resource to that. But, what we had got to at the end of last year was a suite of preparations that in, I would say, extremely difficult circumstances, as third parties like the Auditor General for Wales were saying, were essentially an exemplary set of arrangements to the best we could in those circumstances. And so, we would look at some of that work and reuse that in that potential scenario.

14:05

Okay. From what I hear, I can sort of understand why some of this is happening because whatever mandate has come through over the last three years, Welsh Government has opposed everything that the UK Government has tried to do. So, if we did go out on World Trade Organization terms, what do you think of WTO terms and the most-favoured-nation status, because obviously under WTO terms the EU cannot then discriminate against us under WTO rules? 

Just on the first point that you made, it is possible to take a different view about the right outcome for this set of discussions whilst also engaging responsibly to seek to influence the UK Government's negotiating position within the parameters that it has set for itself. So, I would contest your first point that we have essentially not done the latter. We have consistently put forward public positions that are evidenced. And where the political realities, if you like, of the UK Government's position have moved forward—so most recently, at the start of this year, we published our response to the political declaration, at the time when the UK Government was still signed up to it, and we gave our response to how that needed to change, but accepting that the starting point for that discussion was a free trade agreement. By accepting that, if you like, new reality, we sought to influence how that could look, so I wouldn't accept the point that we've simply said 'no'. I think the opposite is the case, actually. 

In relation to WTO terms, or what the UK Government are now calling an 'Australia deal,' which is 'no deal', I think there's only one Government in the world that we've been able to ascertain that trades only on WTO terms, which is Mauritania, and that's for I think pretty obvious reasons, which is that they are significantly inferior. Starting from where we start today, which is an integrated relationship with the European Union—we will take a different view as to whether that's a good thing—there is no precedent for Governments unpicking that kind of relationship and willingly heading to a WTO-deal relationship, because of the economic damage it would pose. 

Do you really think the Government will unpick those trade deals when a lot of those trade deals are actually going to be rolled over and grandfathered, in some cases? 

The purpose of this from the UK Government's point of view, as I understand it, is to assert its view of sovereignty in this situation. If it's looking to do something that gives it the freedom to do that and that imposes economic damage, it needs to level with the British people around that and make its case. And if it's not expecting to use that flexibility, you might ask what the point of this is. 

Would it be possible just to add one point; just to expand around our preparedness? So, we're very, very mindful that under almost all scenarios there's an extensive programme of preparedness work needed between now and the end of 2020. We're pressing on with everything that we can, where we have an understanding of what's needed. We're looking for some more engagement and some more information, essentially, from inside the UK Government to make sure that we can align our work with them, and also work with partners, as we did right throughout 2019 and previously, when it came to aspects of the preparations. Some of it depends on where the outcome of the negotiations will be and there are also aspects that look common under most scenarios. So, where we can, we press forward, where we've got the information and where we're able to work with partners, and there are some things where we'll need to see how the negotiations unfold to be able to best tailor the preparedness work to the situation we find ourselves in. 

Thank you for that. You saved me asking my question because irrespective of what kind of deal will be achieved, things such as customs checks, will happen no matter what, so there is a need for preparation somehow. Huw. 

Thank you, Chair. I've got some quick-fire, pub-quiz-type questions for you now, Minister. So, first of all, who is the main ministerial point of contact in the UK Government now? 

Well, the negotiations are obviously being led by David Frost who is an official, not a Minister. We've been told our principal contact remains Michael Gove, though, as I mentioned earlier, in the most recent conversation with him he was joined by the Paymaster General, Penny Mordaunt, but as far as we know he is our main contact. 

14:10

That's great. And, can I ask, aside of what we've discussed already, very often inter-ministerial relations are quite important: how would you describe, albeit with the frenetic activity that's going on, your relationship with Michael Gove? 

We seek to be as constructive as possible. The point I make is that we have put forward reasonsed arguments for the position we are advancing, and we haven't had, really, good reasons as to why they're not being followed through, so that is disappointing. But, you know, we will absolutely—I will personally, and the Government will always—seek to be as constructive as possible. 

Okay, thank you. Who is going to chair the JMC(EN) from this point onwards? 

Should there be any further meetings of it, if it's chaired by UK Government Ministers—. Obviously the chair rotates, or at least it has recently—we've chaired it in Cardiff, the Scots chaired it in Edinburgh—but from the UK Government's point of view, my understanding is that will be Michael Gove. 

Okay. But you anticipate from what's been already set as an emerging precedent that this could be a rotating chairmanship.

As I say, there's been one meeting outside London in Cardiff, one meeting in Edinburgh and they were chaired by the First Minister in our case and Mike Russell in Scotland, but when it's the UK Government chairing it, we expect that it will be Michael Gove. 

Okay. Do you have a preference in how you'd like to see it chaired going forward, because sometimes these JMCs can resort by default to UK Ministers chairing them? Do you have a preference as Welsh and Scottish Governments as to how frequently you would like to see yourself in the chair, reflecting, if you like, a parity of esteem, a trust between partners? 

As the First Minister has said previously, what needs to be established as a core part of any well-functioning arrangements going forward is parity of esteem, and also parity of participation, which means rotating chairs, rotation locations, and the institutional and secretariat support that goes with that—agreeing agendas, leading on those. The Governments of the UK need to be treated in parity in relation to all of those aspects. 

Thank you. Can you describe at the moment and on an ongoing basis, what you envisage the working relationship will be between your officials and UK Government officials on UK negotiations now? What's happening right now and what do you think it will look like in a month's time, two months' time? 

Well, they're official—obviously, official contact on an ongoing basis. In terms of the work streams coming out of the negotiations, we want there to be meetings ahead for each of those work streams between officials. Last Friday, for example, we had a readout on an official level of the discussions that had happened in Brussels a week before, but there needs to be a structured set of meetings that comes from each of those work streams.

Would it be ok, Minister, if I could ask Simon or Piers whether they can give us a flavour of what the working relationship is currently, and is it developing in a positive way? 

I'll start, and then Piers can come in. I think the key focus at the moment is on the negotiations. They are one week in and establishing some of the conversations that are going on there and actually trying to establish stronger links and actually get to a point where there is kind of a political level oversight or there’s official involvement in what’s going on. Something that we're also pressing on is just to make sure that issues like the legislative change and the statutory instruments that need to come through in this calendar year are done in a co-ordinated way; that the preparations work is not lost; and issues around the domestic policy implications and how they interact with whatever is going on in the negotiations is something that we need to strengthen and build up the dialogue around those. So, operating on all of those fronts to try and get the connections between those issues.

And I don't want to tempt you, Simon, too far down the thing, but do you have a reason to be optimistic that things like the Welsh policy context will be understood—is being understood—by your counterparts in Westminster?

I think the examples where we've had fairly detailed dialogue on topics, and relationships have built over time, the Welsh policy context is well understood in Whitehall. I think there are departments that have had stronger and deeper relationships over time, where actually that is easier to pick up because things are established, so on the environment, farming and rural affairs side, it is typically better understood in those spaces than in some of the other policy areas.

Has the recent reshuffle, fairly recent reshuffle—has that caused any issues, or has the official working just continued because Ministers come and they go and whatever? 

14:15

I think the biggest effect was the disestablishment of DExEU who had an awful lot of co-ordination work in this space, and there are a few co-ordination gaps at the moment in a few areas as Whitehall looks to find ways of dealing with that business. 

Yes, thank you. Sorry, Piers. That's brilliant, thank you. Could you touch on something this committee is trying to get to grips with: the division of responsibilities between yourself and the Minister for International Relations and the Welsh Language in respect of the EU-UK trade negotiations? 

I've got overall responsibility for the Welsh Government's engagement with the future relationship between the UK and the EU, including any free trade agreement in that context, and the Minister for international relations has responsibility for trade negotiations with the rest of the world, if you like. But, plainly, in trade negotiations, there are a number of portfolios within Government that are engaged, and I'll ensure that there'll be overall agreement on our positions within Government.

Okay, thank for you that. Back on 27 January, in your evidence to the committee, you indicated that if the Welsh Government did not have a formal role in the negotiations it would need to consider how it was organised internally. Now, in response to what we've discussed already, the UK’s approach to negotiations, what does that look like? 

I don't think any significant internal reorganisation is needed at the moment. What has happened is that the remit of the Cabinet sub-committee on European transition is going to be extended as well to include trade, which provides that ministerial forum for those kind of interdependencies to be taken into account in the round. It's obviously vital that there's a co-ordination mechanism across Government for those discussions that are happening in parallel. The trade policy team internally will have responsibility for all free trade agreements supporting myself and the Minister for international relations, and then beneath the Cabinet sub-committee directors of different departments will be engaging together to understand those trade-offs and interdependencies, and advise the Cabinet sub-committee accordingly.

Okay, thank you for that. There has been a lot of discussion over what the UK Government's approach was in terms of what seemed to be a parallel process here of negotiating both with the EU and also with the US. Any one of those would be a behemoth of a task to do; doing both at once is quite something. But where is Welsh Government on this? Do you have the resources, if it came to the—. As we currently are pursuing two at once, do we have the capability—the capacity, sorry, not the capability, within Welsh Government to step up to the plate here and to either formally engage with the UK Government to get the Welsh voice heard, or somehow otherwise to influence the shape of the UK negotiations? 

There are also the Japanese discussions that will be commencing, I think, relatively soon and then later in the year I think the Department for International Trade are planning on discussions commencing with Australia and New Zealand. So, with that range of negotiations happening in a similar time space, if you like, that's likely to put significant pressure on Welsh Government resource. There's been additional resource brought into the trade policy team to undertake this work and to build capacity, and there's a central trade policy team, but experts in each individual portfolios then supplement that team to support the work across the board. Since we are not leading or directly involved in negotiations in that sense of being a negotiator, then having negotiators isn't necessary, but having that policy capacity to influence negotiations obviously is an important part of that. 

So, you're confident that you have the capacity here to actually deliver on two major negotiations, and others that come about as well? 

As I say, that set of circumstances would lead to significant pressure on resources in the Welsh Government, but we are building capacity and capability as much as we can to influence those negotiations. 

What would be your ideal way forward on these negotiations from a Welsh perspective and, I also have to say, from a Scottish perspective as well? Because traditionally in these sort of spheres you don't try and do everything, you try and focus in partnership with the UK Government on the important things where there is an element of expertise as well within Welsh Government or Scottish Government and you work as a partnership with the UK Government. It just strikes me that, if that positive collaborative approach doesn't go forward, you may be even further stretched, because you will have to cover all bases, almost in a firefighting way, rather than a, 'Right, Scots, you can help us with this, focus on this. Wales, you focus on this.'   

14:20

Two points to make on that. I think we have—. In relation to the different kinds of negotiations, to make a distinction, which are the negotiations with the European Union—for reasons which we all understand are politically very sensitive and fraught in terms of the broader context, and different Governments in the UK have different priorities within that context, that's to state the obvious. 

In relation to negotiations with third countries, the whole point of that isn't to dismantle a set of integrated trade relationships, it's to expand the existing trade relationships. So, in a sense, this is an area for the Minister for International Relations and the Welsh Language, but in principal terms, there is more opportunity in those negotiations to find common ground, because all parties are looking to push in the same direction of expanding trade opportunities. That isn't, unfortunately, the case in the context of the European Union negotiations. 

So, in an ideal world, of course, we would spend months and years preparing for different scenarios and we would working in a collaborative way. The reality in front of us seems to be that this will be helter-skelter. How, within the way that you're seeking to arrange Welsh Government mechanisms behind the scenes, are you going to be able to deal with the spontaneity of this and the need to make a decision by the middle of the week next week on the thing that's popped up that is of critical importance or even danger to certain areas? How are you going to do that? 

There's a set of in-principle discussions around what the priorities are, which is the domain of the Cabinet sub-committee, and then between that, as the pace of negotiations demand, there will need to be official and ministerial responses to that in exactly the way that you're describing. But the work of identifying what the priorities should be in each of those sets of negotiations is underway and is the work of the Cabinet sub-committee. 

Before I go on to questions on the common framework, just one point from me—one question, perhaps—you're right to identify that David Frost is leading on negotiations and he was appointed by Boris Johnson, the Prime Minister. I understand he reports to the Prime Minister. So, it's a very good question as to whether reporting lines are there for Welsh Government. But I would assume, following the period of negotiations that he has with the EU, he will be producing reports for the UK Government. Will the Welsh Government be getting copies of those reports so it can actually assess what discussions are going on and how they are moving? So, they give you an idea as to where you may wish to express further influence, or where you may wish to express further time on preparations. 

It's that sort of mechanism that we've outlined as the kind of mechanism we would wish to see in place. It's not currently in place. 

So, it's not in place. At the moment, you have no mechanism in place to see any reports that come to UK Government from those negotiations? 

There's been one-week's worth of engagement. Piers, perhaps you can elaborate on that? 

Sure. We've had a verbal read-out, but actually what we've asked for, on a structured basis, is to get a written report, because that enables you to engage in a more substantive and more detailed way. So, we will see whether or not we hear any more from UK Government this week about both what will happen on the back of last week, but also what will happen on the back of future rounds. 

No, but I think the point you make, if I may say, Chair, is a central point. There needs to be—. It needs not to be an oral update, it needs to be a written report, which Governments can sensibly engage with.

Okay, thank you. We'll go on to some common framework areas, David.  

Thank you, Chair. Minister, do you respect the UK Government's mandate for a deeper, swifter, more divergent Brexit?

No, sorry, I'll go on to that; we have so many expansive general questions on your relationship with the UK Government.

Well, the UK Government has a mandate to take us out of the European Union, which they have obviously done. The political declaration was the basis upon which that has been agreed with the European Union. The mandate that has been put forward for the negotiations doesn't, however, remain faithful to the terms of the political declaration in a number of ways, perhaps most notably the level playing field. So in a sense it's gone beyond the political declaration, which was the basis upon which, at the tail end of last year, it was described in the future relationship. So, now we're in a territory where the UK Government is talking about a Canadian free trade agreement and, failing that, an Australian free trade agreement. The Australian free trade agreement isn't really a trade agreement; the Canadian one doesn't reflect the principles of the political declaration. So, there's obviously a question about what is the kind of relationship that it should be pursuing. The political declaration is quite a long way away from what's in the negotiating mandate.

14:25

The difficulty I have with the decisions Welsh Government has taken in the last 18 months or so is that Mrs May's Government pursued a much softer version of Brexit than the one endorsed, whatever you think about it, in the general election for Boris Johnson's Government. But you opposed the soft version and now you oppose the harder version. It's no wonder that you don't perhaps have the level of leverage that you would like, isn't it?

I wouldn't accept that. In fact, what we did was describe a version of Brexit that we thought was consistent with the referendum result in 2016. Unfortunately, for parliamentary reasons, which I suppose we don't need to go into here, that wasn't delivered. But the notion that we didn't support versions of a hard Brexit, which is what I would argue those deals were, doesn't say anything about the fact that we put forward our own positive and constructive alternative. I think it's been perfectly possible to be very clear about what we think is in the interests of Wales and to disagree about the direction of travel whilst accepting the political realities, such as the political declaration at the end of last year, to engage with that and describe the version of that that we think is in Wales's best interests. I think we've done that pretty consistently throughout, stemming back to 'Securing Wales' Future', which as a document wouldn't have started from the world that we would have wished to see, but recognised the new reality at that point and, I would say, engaged with it constructively. And by the way, it hasn't been refuted in terms of the argument it makes; it's the politics that have been disputed, if you like.

We're getting to the heart of the matter now, aren't we? There's a complete mismatch in how the big political event recently, the general election, is interpreted. It seems to me that, having not gone out of your way to, in effect, negotiate or help bargain for what's commonly called a softer Brexit in the last Government—. I remember the First Minister, in your position, saying that he thought the withdrawal agreement was a pretty good one, it was just that he wanted a few more expansive things in the political declaration; we went round and round and round the racecourse on that, and you never gave your endorsement of that. I just think it's the hangover that you're suffering at the moment, because you're speaking at complete cross purposes all the time, aren't you? Because the current UK Government—. You may genuinely regret this, many people genuinely regret it, it's not where I wanted to be, but there was a clear decision by the British people in the general election to support the party that wanted, as I said, a deeper, swifter and more divergent Brexit.

You either take the view, I suppose, that Brexit is whatever you choose to describe it as on any given day, or you take the view that it has some bearing as to what is being described to people in, for example, the context of an election campaign. Having a political declaration that describes a version of that, and then in the new year to have a set of discussions that don't reflect that declaration, I think poses a question.

But you play these word games as well, don't you? A non-divergent Brexit is still understandably Brexit.

Brexit without divergence, so the level playing field, if you look at that side of it as well—it was never a realistic prospect, was it, for a meaningful Brexit?

We've had a referendum and a general election, and the fall of a Government in between, taking this country in that direction of a very firm Brexit.

Not to belabour the point, but with regard to the level playing field commitments, the political declaration is clear that there would be no regression from the high standards in place in the Union or the United Kingdom at the end of the transition period. So, that is a particular version of leaving the European Union. That is not what is described in the negotiating mandate.

14:30

Well, it is. It's only that the arbitration issues and who interprets what the regulatory frameworks are and the standards that are then presumably contained in UK legislation. It's not saying that we want to lower standards. I think the UK Government has made it very clear on environmental and labour law issues that it is not pursuing that at all.

I think the mandate talks about the kinds of level playing field provisions in place for comprehensive free-trade agreements, and this Canadian agreement, I think, is used as the exemplar of that, but I don't think that you can simply, as I said earlier, cut and paste from a fundamentally different economic context the sort of deal that you want. That precedent just isn't there. Now, I don't think that you should be basing it on precedent, but if you are, they haven't found one yet that meets that task.

If I can just quickly, then, move on to common frameworks, I just wonder, given that we've now had the Agriculture, the Fisheries and the Environment Bills published, to which I think the Welsh Government is hoping to pursue its legislative clause, at least temporarily, how do these Bills affect the work on common frameworks that's been done, and are there new areas that may emerge as a result of these Bills in terms of other areas that will be covered under common frameworks?

I think some of those questions are policy questions for the responsible Ministers, but in terms of how it engages the broader point, I think the Fisheries Bill is the only one that engages the question of common frameworks, because it describes, in some detail, the joint statements and so forth. And the legislative consent motion referred to the fisheries framework, which would flow alongside that. So, that's the only one of the Bills that engages directly the common frameworks work.

And there has been agreement, apparently, between the UK Government and the Welsh Government on the World Trade Organization provisions within the Agriculture Bill. I think this relates to what sort of state aid or support regimes will be permissible. Could you give us some more information on that—the nature of that agreement?

Essentially, it's a mechanism for engaging Welsh Ministers in decision making, but I might ask Simon to elaborate on the policy underneath it.

The international agreements around trade obligations are observed, but they have a very strong impact on devolved administrations, so officials have had discussions underpinning the development of the Agriculture Bill, and talked about how the WTO forces could operate in practice, and we've reached agreement about UK Ministers talking about—committing to ongoing dialogue with devolved administrations about the shaping of that policy, and even getting it to the extent of if there are disputes within that; a mechanism set out in how they would actually take that forward, making statements to the House of Commons and explaining why they have taken a different view. And that would create an opportunity for this Parliament to consider the issues as they're being taken forward as well.

And then finally from me—thank you for that clarification—many of the frameworks are predicated on the need to keep enough common principles to underlie a UK internal market, and I wonder where the Welsh Government has got in its negotiations with the UK Government on those sorts of principles which, for the ongoing operation of the common frameworks, is obviously going to be very, very important. Are you confident—I think the target date is by the end of this year—that there would be agreement between the devolved administrations and the UK Government on those sets before it moves, in effect?

Obviously, the internal market work is linked very closely to the wider negotiations in common frameworks as part of that. The key principle is that the internal market arrangements need to be agreed, rather than imposed and there are benefits in terms of the co-ordination of economic development across the UK, but we're very concerned that the UK Government will seek to legislate on the UK's internal market in a way that could cut across devolved competences. That is not the right way of doing it; it needs to respect the capacity of individual parts of the UK to regulate in a way that reflects the devolution settlement in different parts of the UK.

In terms of the time frame, the end of this year is still the date that, obviously, everyone is working to. The ambition is to have a workable set of frameworks at that point in time. Whether there will be a concluded set of frameworks in each of the areas may or may not be the case, but certainly, a set of workable arrangements, obviously, prioritising those areas that need most focus. One of the big dependencies, obviously, is the nature of the relationship with the European Union, which will probably be clearer mid-way through this year. At that point, that has quite a significant potential set of impacts on the common frameworks.

14:35

I’m conscious of the time, Minister, so I’ll just close with a couple of quick questions, if that’s okay with you. You just said that you think that only the Fisheries Bill would actually impact upon common frameworks, but the Minister for Environment, Energy and Rural Affairs, in a response to the Chair of the Climate Change, Environment and Rural Affairs Committee, indicated that she believed that there were two Bills—the UK Agriculture Bill and UK Fisheries Bill—that would require primary legislation and that would impact upon the agriculture support and fisheries management support within Welsh Government competences. It highlights that this was actually where frameworks are expected. So, are you sure that it’s just the Fisheries Bill that common frameworks will be impacted on, or will the Agriculture Bill also look at this?

This perhaps underlines the point I made earlier. This is a policy-driven discussion, essentially, for the portfolio Minister and the relevant committee. My understanding is that the Bill itself doesn’t make substantive provision in relation to those areas, although the existence of common frameworks to resolve policy development within those areas obviously is beneficial. But I’m not sure that the Bill itself engages common frameworks, but I will defer to the relevant portfolio holder in relation to that.

Okay. Time is against us, so I’ll stop there. Perhaps if we’ve got any other questions, we might write to you with some points, particularly on some of the issues with frameworks, progress on frameworks, progress on inter-governmental relationships and a few other matters in relation to your new portfolio of European transition. Thank you very much for your time. As you know, Minister, you will receive a copy of the transcript. If there are any factual inaccuracies, please let the clerking team know as soon as possible so that we can have them corrected. So my thanks again, and to your officials, for your time this afternoon.

If Members are content, we'll now propose to have a break for five minutes and we'll recommence at 14:45.

Gohiriwyd y cyfarfod rhwng 14:37 ac 14:44.

The meeting adjourned between14:37 ac 14:44.

14:40
3. Negodiadau ynghylch y berthynas rhwng y DU a’r UE yn y dyfodol—safbwynt o Frwsel
3. UK-EU future relationship negotiations—a view from Brussels

Good afternoon. Can I welcome Members back to this afternoon's meeting of the External Affairs and Additional Legislation Committee? We go on to item 3, which is the UK-EU future relations negotiations and a view from Brussels, and in other words, a perspective of the EU vision of the discussions. I'd like to welcome three individuals in the room itself. David Henig, director, UK trade policy project at the European Centre for International Political Economy, and, on our video links, Niclas Poitiers, research fellow at Bruegel, and Fabian Zuleeg, chief executive and chief economist at the European Policy Centre. Can I welcome you all this afternoon and can I thank you for your time? I'd like to start off, if possible, by asking each of you to give a perspective and overview of how you see the EU's perspective of the negotiations and the issues the EU are focused upon in that. So, David, we'll start with yourself, please.

14:45

Okay. Thank you for the invite. Just a few opening points. I think the first is that there was a noticeable difference between the atmosphere in Brussels towards the UK on 31 January, the last day of EU membership, and on 3 February. It was very noticeable that the UK is immediately being treated as per any third country. The bar came down, UK officials were not in any meetings any more, did not have the choice, and found their invite somewhat limited. There was a clear change in atmosphere.

I think the second point I would make is that, for the EU, this is another trade negotiation. The EU is very experienced in trade negotiations. They have a machinery that works reasonably seamlessly in terms of discussing with member states what they would like to see in a trade agreement, then completing the mandate—this was the process we saw happening during February—and then starting trade talks. This is a tried-and-tested method for the EU. However, there are some differences on this occasion. The timescale is obviously much shorter. The EU has not been through the normal consultation processes that it would go through. It has not started off an impact assessment like it would normally do and, clearly, the pace of negotiations is much quicker. This is presenting some problems in terms of keeping member states up to speed with what happens, which is normally what happens.

In terms of what the EU would like to see from the talks, we can see very clearly that they have set out that this is a free trade agreement. However, I think it is important, from the way I see it, the EU does want an agreement with the UK. It has agreements with all neighbouring countries, and it does not want to see the UK completely outside, because part of the EU's remit is, not just for member states, to have good trading relationships with all countries on the continent. And so there is a sense that I have that, when the UK threatens to walk away, the EU would rather not walk away; but it is quite clear, equally, that as the larger market they believe that access to their market in preferential terms compared to the World Trade Organization is worth something and that we will need to follow the level playing field rules in order to access that, and that is, in principle, non-negotiable.

Yes. I will follow up directly on that. I think we have seen a lot of ramping up of the rhetoric over the last weeks, a lot of new demands were added to the list on both sides, and both sides have hardened their stance in preparation for these talks. Now, finally, we've got to the negotiations. So, I hope that it will calm down a bit and we will actually start talking about the issues. But I agree with David.

So, the issues are, basically, there are some parts that are non-negotiable on the EU side, which also the UK side stated to be red lines. We're talking about a level playing field; fisheries is a big issue; the governing structure is still quite open. We have a very tight timescale; this would have to be concluded by June. I think, at this stage, the two sides have to come together somehow if they want to get a deal.

I think, financially, both sides want a deal. My personal perspective is that, with these threats, or the stated policy agenda of the UK Government, it became clearer that they want what they want, but still it's very far apart from what the EU wants. I'm not convinced that now this kind of stance the UK is putting, that they want what they call the Australia type, which is basically WTO trade terms, that this is a credible threat.

I think that there still has to be a lot of—. There has been a lot of goodwill lost over the last weeks, and I think there are still a lot of things that are not really aligned, and we're still very early in sorting out how it's going to be. The EU is very much aware that they are the bigger bloc. This matters a lot in trading negotiations, and I think the priorities are very clear from the EU side. 

14:50

Nothing much to disagree with with my colleagues. I would add to that I think it is far from clear whether the UK Government really does want a deal. It's not something that can really be assessed from the outside, but certainly in Brussels there are some doubts about the genuine wish for a deal. Of course, the UK would like a deal if it gets everything it wants, but we know that that is not going to happen. So, when we look at the red lines on both sides at the moment, then it looks like no deal is possible, because those are not compatible with each other. 

I think what also is important to recognise is that one very important red line for the European Union is the arrangements within the withdrawal agreement, and those will have to be fulfilled. In particular, there's a concern around the protocol on Northern Ireland and whether the UK is doing what is necessary to implement that protocol. Again, without implementation in full of that protocol, there is not going to be a trade deal. So, for the moment, yes, there are talks ongoing and those talks have identified a number of areas where there is agreement, but there are also a number of areas where there are very strong disagreements and a very big gap between the two sides. For the moment, I don't see a common landing zone. I do not see where the compromises could be that would end up with a deal, unless the UK makes some spectacular u-turns on certain issues. 

Thank you for that. Perhaps I can open it up to a couple of questions. It's been mentioned here clearly that there might be a preference for multi-bilateral agreements, rather than a single large agreement. What's the EU's position on that type of approach from the UK Government? Anyone?

It's not going to happen.

It's not going to happen. The European Union is not going to agree a patchwork of different bilaterial deals. Of course, if there is a central deal, then there will be the possibility to build on that and perhaps separate arrangements in different areas, but there needs to be that central deal. So, this is not going to be a patchwork of different bilateral relationships. They are also difficult to handle. They would imply that you have different governance for different issues. These kinds of thing are not on the table for the European Union. 

I wonder if I could ask: you've described the process that is bypassing the normal time for consultation and dialogue with other Ministers who are members of the Council with other European nations, through the Parliament, and so on. Is that to the advantage or disadvantage of the UK in this negotiation? The speed at which this is now going to have to happen, does that give any more cards to the UK Government, the fact that they've said, 'We have a very short timescale or we're out of here'?

In my opinion, it will make the EU process less smooth. So, you could argue that putting your opponent slightly off balance may be slightly helpful, but it may also mean that, as I think, the EU will be more reluctant to make concessionary moves to the UK without having the chance to check these in advance with member states. Member states have made clear what they want to see. The Commission is often the more moderate player in comparison when negotiating trade deals, but if they don't have the time to work concessions through with the member states, then I think they're probably more likely to retain a hard line on things, because the Commission, like any sensible negotiator, wants to make sure that whatever they negotiate can be passed through not only the member states in the Council but also the European Parliament. And if you don't have time to set that up, I think that is to the UK's disadvantage, if we are seeking anything in particular. It's not always clear, as has been said, as to what the UK is exactly seeking in terms of a deal or not. But if we are seeking significant softening of the EU's position, I think this will be made more difficult by the timescale.

14:55

Yes, I agree with that. I think also, in putting yourself under pressure, if you know that at the end of that road is a wall, then it doesn't really put that much pressure on the other side. The EU is fully aware that the big cost is going to be on the UK side if there's no deal struck, so the time pressure actually makes probably high expectations that the UK will have to concede, given that the alternative to that is no deal at all.

Yes. I think that there was always this discussion, at least in the UK: basically, if you could play the member states against each other. That has not worked out for the withdrawal agreement. I don't believe it will work out now. The Commission has a very clear negotiation mandate from the Council, and then the UK will have to deal with the interests of every single EU country, and I don't see any reason why this coalition will break up. The EU has done many, many trade agreements, there have always been diverging interests, and I don't see why that could be the case now. The time pressure is to the disadvantage of the UK, very clearly. I think the EU Commission is very much aware that this is much worse for the UK than any member state if there is no deal, so I think they will have the time and the advantage.

Diolch, Cadeirydd. Ro'n i'n mynd i ofyn yn y Gymraeg, os ydy hynna dal yn bosib, dwi'n gobeithio, i wahanol adrannau. Diddordeb mawr yn beth roeddech chi'n ei ddweud ynglŷn â'r Undeb Ewropeaidd wedi hen arfer negodi bargeinion masnach fel hyn dros y blynyddoedd, dros y degawdau, ac wrth gwrs mae yna brofiad helaeth, felly. Dŷn ni'n gwybod bod yr amser yn brin, a hefyd bod yna heriau mewn gwahanol aelod-wladwriaethau, Mae gwahanol wledydd yn Ewrop efo sawl gwahanol fater domestig sydd yn heriol nawr, o COVID-19 i newid Llywodraethau, neu beth bynnag. Mae yna bethau eraill sydd yn tynnu sylw'r gwahanol wledydd o'r 27 sydd ddim byd i wneud efo'r ymdrech yma i negodi bargen masnach efo'r Deyrnas Unedig. 

Felly, o gymryd hynna i gyd at ei gilydd—ef profiad helaeth yr Undeb Ewropeaidd mewn negodi bargeinion masnach, y ffaith bod yr amser yn brin, gwahanol heriau o fewn gwledydd eraill Ewrop—dŷch chi'n weddol ymlaciedig, os gallaf i ei roi e fel yna, os oes yna, ar ddiwedd y dydd, ddim bargen o gwbl, dim cytundeb o gwbl, o ochr Ewrop. Fuasai hynna yn ganlyniad teg i ddod iddo fe os bydd yna, ar ddiwedd y dydd, achos yr holl rwystrau yma, unrhyw ddiffyg? Ac os bydd yna ddim bargen, dim cytundeb ar ddiwedd y dydd, hynny yw, ar ddiwedd y flwyddyn yma, bydd yna ddim cytundeb, hynny yw, y Deyrnas Unedig fydd yn colli allan, nid Ewrop. Dwi ddim yn gwybod pwy sydd eisiau dechrau. David, wyt ti eisiau dechrau?

Thank you, Chair. I was going to ask my questions in Welsh, if that's still possible, I hope that it is. I'm very interested in what you had to say about the European Union as being very used to these kinds of trade deals over the decades, indeed, and there is experience in this regard. We know that time is tight, and that there are challenges in different member states. Different states in Europe have several different domestic issues that are facing them, from COVID-19 to changes in Government. There are other pressing issues that are taking the attention of the EU-27 that have nothing to do with this trade deal with the United Kingdom.

So, taking all of that into account—the vast experience of the European Union in trade negotiations, the fact that the timeline is short, the different challenges within the member states—you're fairly relaxed, if I can put it that way, if there is no deal at the end of the day, from the European Union side. Would that be a fair conclusion for me to draw here, because of all of these barriers, if there were not to be a deal at the end of the day? So, at the end of this year, if there would not be that agreement reached, it's the United Kingdom that would be the loser, not the European Union. I don't know who wants to start. David, do you want to start?

You're offering to me. As compared with my colleagues, I think I detect some more concern in the EU about no deal, but not from a trade point of view. I think that, from a trade point of view, you will hear over and over again, 'This is 8 per cent of our trade, this is 50 per cent of your trade. We are relaxed about that. The German car makers are not coming to the rescue, please stop thinking that they are.'

But, as I mentioned earlier, I think there is a bigger issue for the EU in terms of what might be called the EU neighbourhood, or in terms of the EU regulatory zone. I think that not at any cost, but the EU would rather have a deal to have the UK follow roughly the same regulations. I think they probably think that the UK will do that anyway, that the alignment the UK Government is talking about is an alignment in theory that is not actually going to happen in practice, so we are not going to adopt different rules on car safety or aircraft safety, and I think that seems reasonable. So, I think that the EU would like a deal and, possibly, I would argue, the EU would like a deal slightly more than it seems to me the UK Government would. But I'm aware that I'm not sure that my colleagues would quite agree with that, so I think that that's an area we might disagree on. 

15:00

Yes, I disagree on that, as you might think. I disagree on that. The—[Inaudible.]—is clear and maybe I am too optimistic, but I think the economic cost for the UK would be considerably higher. There would be an economic cost for both sides. I know that Fabian has a different assessment on this, and I think at the end of the day he's right and that only the UK Government knows what it ultimately wants. But I don't think you can pressure the European Commission by threatening 'no deal'. For me, that does not seem like a reasonable strategy, because at the end of the day everyone knows that that is not the interests of anyone. It would be a really bad outcome for the EU, it would be a disastrous outcome for the UK in many, many areas. So, I think the pressure is on both sides, but the pressure is higher on the UK side, and I don't think the EU is that threatened by a Singapore-on-the-Thames scenario; I don't think that is really something that keeps the people of the EU up at night. I think the economic downside is not the disalignment of UK regulation but the economic downfall of not having a free trade agreement. 

To borrow someone's famous phrase, 'no deal' is better than a bad deal for the EU. I think, yes, I fully agree the EU does want a deal. It wants a deal because of the economic impact, but also because having a deal, even if it is a very minimal deal, would open the door for co-operation in a range of different areas. It would enable a dialogue on some of the other issues such as security, such as defence, such as internal security; a number of areas of possible co-operation would become very, very difficult if you have no deal at all. So, certainly, the European Union wants a deal, but that deal cannot break the principles that are there, because if it breaks the principles the cost is far higher than the economic cost from not having a deal. And it cannot go against the explicit interests of the member states in a negotiation like this. There is a certain amount of veto power on the individual member states. If a member state feels very strongly in a particular area, it would be unprecedented that the other member states overruled them within the negotiations. So, if a member state puts down very strong red lines, then these red lines will stick because the other member states will back them up, even if they have diverging interests in other areas. 

My final point on this would also be that I think one of the difficulties when it comes to these phase 2 negotiations is that we are talking about diverging interests, and at least on the EU side this is also a game of winners and losers. We have a situation where, yes, the aggregate effect is going to be economically bad for the European Union, but within that there will also be particular companies, particular sectors, particular countries that will benefit from some aspects of this. So, it is much, much harder to get that into a deal than we had in phase 1. So, overall, I think from the EU side, yes, there is some flexibility but it will be limited, and the big question for me remains whether the UK side is willing to concede on some of the points where the UK has said they will not concede, but if they don't then there simply will not be a deal.  

Two questions from me at the moment. On the weekend, I read, since you mentioned civil aviation, that the UK Government is intending to pull out of the European agency on civil aviation certification, and go to the Civil Aviation Authority in this country. Now, it's not an economic argument because the economics seem to be far more expensive in doing that rather than staying in the European agency and partnership. Is that the type of message that Brussels worries about, in that the UK is establishing its own organisations for certification, whether it be for motor vehicles or, in this case, aviation? And what type of expectation will there be in the negotiations to ensure that this doesn't cause a problem for European aviation and UK aviation, so that planes that are certified here can fly everywhere, and, similarly, vice versa? Is that an issue Brussels expected, or is this an example of perhaps how a future relationship can work if we get it right?

15:05

I can maybe respond to that question. It might be just a political signal at this moment. I think it's intended as a signal that the UK is willing to put some kind of regulatory independence over the economic costs and benefits. I see literally zero benefits from leaving this organisation because, in the end, the certification will always be more or less the same, it's just that you have to set up and pay for your own organisation. And, there's also no point in this, so I don't know where the UK would like to diverge from EU regulation there. So, I think it's a political signal. It's the willingness to have sovereignty over some issues despite the cost. But, I think, for the airline industry, for flying, it will not have a huge impact. So, the big question in airlines is more like the freedom of flights, and thus the UK has sent a very strong message that they don't want to be part of the European free sky; I've forgotten the name of that agreement, but basically—[Inaudible.]—like Switzerland has the right to fly in the EU, in the internal market. The UK doesn't want supervision of the European Court of Justice, so it will be, if that's a red line for the UK, not the UK carriers will be excluded from this market. 

Okay. Thank you. Perhaps you can express your views—it's slightly different—on the balance of power in the European Council and the European Parliament—clearly, since the UK has left, there would have been an impact upon the balance of power in both institutions—and how that will perhaps impact upon the negotiations. As, I think, David highlighted a little earlier, the European Parliament as well is a major voice now, but we seem to have a difference balance of power as a consequence of the UK MEPs no longer being there, other MEPs from other nations coming in, at a lower number, I understand, at this point. But that does change the balance of what is deemed to be right and left of the Parliament. How is that balance of power changing, and what do you see that impact on negotiations being? Fabian. 

Yes, I can start. On the European Parliament, I think what we are seeing in the European Parliament predates the exit of the United Kingdom. Essentially, we have a more fragmented European Parliament. So, it is more difficult to get agreements on any issue, particularly on contentious issues. I think what this means is that, particularly when it comes to issues such as trade, there will have to be very careful consideration of what the kind of red lines might be that the European Parliament sets, and this, I think, would also apply to the Brexit agreement, so the phase 2 agreement, of course, whenever that comes to the European Parliament. 

I think the assumption that the European Parliament would just simply accept any deal would be very brave indeed. I think that is also one of the reasons why some of the issues that are there, such as level playing fields, such as the Northern Ireland issue, these are also issues for the European Parliament, and the European Parliament would not vote for a deal if it doesn't see that these kinds of conditions are satisfied. 

For the council, yes, the departure of the UK does make a difference. It certainly makes a numerical difference when we look at qualified majority voting, for example. But, overall, I don't think it's going to change that much within the decision making. And the UK, at least in recent years, has not been a very proactive member state, in the sense of putting new initiatives on the table and trying to make progress in certain areas. And the UK, and not only the UK, but the UK has been more of a negative actor, saying 'no' to particular things. And I think that is a problem that will persist in the council going forward. We have a variety of coalitions to say 'no' to certain things; it's much, much harder to construct a positive coalition to say 'yes' to something. But as I said, that's not dependent on the United Kingdom—that is something that was there beforehand, and that continues now.

15:10

I'm going to comment mostly on the European Council, of which I have experience as a UK official, being part of trade negotiations. There has generally been a bit of a backlash against trade, and the EU's openness to trade, which has been reflected in the European Parliament being more fragmented. But it's particularly becoming apparent, I think, in the European Council. The absence of the UK, and perhaps Germany being a little bit more reluctant about open trade as well, means that the balance within the European Council is now away from open trading states, such as Sweden, Denmark, and Ireland. And for the UK, this has been exacerbated by the fact that we have made little effort to maintain any friends in the EU. I receive quite a lot of critical comments from friends in these countries—friends working in the administrations of these countries—who cannot believe how little contact they have with the UK Government, to explain their position, maybe to help make a case within the council that would be helpful to trade. And when I mention the backlash—the level playing field conditions; this isn't just about the UK. There has been a debate going on in the EU about whether you need to have tougher level playing field conditions for several years. The UK is, in a way, in the wrong place at the wrong time—coming up to the first country to want to do a major trade agreement with the new European Parliament and the new Commission, who want to get tougher on trade enforcement. So, this isn't about business as usual. The EU and the council have looked at trade agreements, and said, 'We don't think they're tough enough. Who's the next trade agreement with? The UK. So we'll make that tougher.' Clearly, there is a UK-specific element to this, but also this is new because attitudes to trade are changing in the European Parliament and in the European Council. And I think I disagree slightly with Fabian: I think, in trade, the UK was always a more positive influence, and without us there, I think the French are now stronger, and they generally have a more sceptical view on these matters.

I don't have much to add to what was just said. I think at the end of the day, this point that David just made that—[Inaudible.]—agreement, which is certainly much less important for the EU than the UK-EU trade deal will be, but this thing is under huge pressure because of environmental standards and environmental issues. So this topic is coming up, up, again and again, so I think it's increasing in importance. And I think it's basically a red line. I don't see a trade deal without considerable level playing field conditions. This is a very contentious issue, and the two sides are very far apart, and the Parliament is very much part of this agenda.

No. I actually agree with my colleagues. I think, on trade, it has always been a different debate, where some countries have been pushing. But I think, generally, things have become much more difficult. We had the big discussion around the Comprehensive Economic and Trade Agreement when the UK was still a member state, so this is not something where things are going to get easier, certainly. But on level playing field conditions, I fully agree that these are pre-conditions for any trade deal. The European Union is not going to move away from that. There are some member states where this is an absolute red line, and they are not going to sign up to any deal without level playing field conditions. Actually, I would say the majority of member states are thinking in that way. The big question has always been how you design them in such a way that they are least intrusive, that they work in a way where they are not detrimental to competition. But in that context, it also has to be said that the rhetoric that is coming out of London these days is not helping. The more the UK Government is emphasising that divergence is the point of Brexit, the greater the fears are going to be that that divergence might lead to unfair competition, and half of the demands are going to be to have strong level-playing-field conditions.

15:15

Yes, can I ask you for a moment to imagine that we are the UK Government sitting here and you are three wise advisers, and, on the assumption that the UK Government is really working hard, does want a deal in the timescale we've got available, what would you be saying to us as UK Government: (1) on what are absolutely—absolutely—red lines that the EU will not shift on, so, 'Ministers, you may as well ignore that, because they're just not going to shift'? But what also would your advice be to us on how to achieve a deal in the timescales available?

Okay, a challenging question for you. Fabian, do you want to start off?

Sure. I think my starting point would be to say that, while there are some areas where there is space for negotiation in terms of the exact nature, I would avoid very much making absolute statements. So, when it comes to issues such as a level playing field, to have a deal, the UK will have to sign up to level-playing-field conditions, so the negotiations should be about what is in them, how onerous are they, how difficult are they to meet, rather than having a public discussion around whether you sign up to something at all.

I think similar things apply to fisheries, apply to a range of other issues that are there. There will have to be significant movement on the UK side. So, absolute statements don't help. I would say that the way to approach this is for the negotiators to sit in a room and quietly agree what the landing zone of this deal is going to be, sketch out what the broad direction is going to be, sketch out what possible solutions could be for the contentious issues, and then to get the Governments on both sides to buy into that. If we don't have that kind of common landing zone, I don't see how a deal can be done within such a short time frame.

I fully agree. I think the most important thing right now is to know where we're going, and so I think it's hugely important that the UK recognises what are red lines for the EU, instead of trying to build up a very, very hard position by setting up red lines themselves that are very clearly non-negotiable for the EU. I think it would be important that the UK, maybe not publicly, but at least in negotiations, makes it clear where it actually wants to be in the frame of it is clearly what the EU wants or even the Commission is able to give, and then basically negotiate on the technicalities. So, as long as the UK starts with this very hard position of not having any level-playing-field conditions, there being simply nothing to negotiate on, then a time frame—this problem will not be resolved in one year. So, as long as we don't—. I mean, a trade agreement is ambitious in a year, of this scale, by itself. As long as we are just still talking about the basics—about what this trade agreement looks like—I don't see any chance of this moving forward.

So, I think, No.1, I would say: have a fairly ruthless view of UK priorities, whether they be offensive interests—I'm not clear that there are any of those—or whether they be defensive. So, if, for example, having no reference to the European Court of Justice is the absolute No.1, then identify that and therefore the second part is: depending on what you've decided those prioritise are, going by what the red lines are of the EU, then to think of what are the approaches that will allow those red lines to meet. Thus, for example, yes, there will need to be level-playing-field conditions, but, if—another example—the UK says, 'We cannot have dynamic alignment'—that means just following EU rules—then I'm sure there are forms of words one can say in which both sides will maintain equivalent approaches. That won't be easy to agree—the EU will, rightly, be quite resistant—but there is at least the possibility of a zone there. So, once you've identified your priorities, you can then see where you might be able to find compromises.

I'm afraid the third part is, in the areas that are not your priorities, the UK is going to have to accept the EU approach if it wishes to set the timescale. So, the UK has set this timescale of 10 months. Okay, fine—that was our decision. We can set some priorities, but we then have to accept the consequences of setting such a timescale, and it may well be that in many areas of the rules around trade agreements, non-level playing field, things like intellectual property or the access to each other's services markets, generally, we would have to go with what the EU has done, because we simply don't have time to negotiate that line by line. And that is a consequence of our first priority, which was 10 months.

15:20

Yes. Actually, I rather agree with the analysis there that there are strong reasons, I think, for both sides to come to an agreement. This is not a very good metaphor, but we're at the 'weigh in' stage of a boxing match when there are all these histrionics, but we will get to an agreement—not a fight, which is why it's not a good metaphor. [Laughter.] It's all I could think of in the time. So, I think, surely, the landing zone is there, and I think the early stages are always deflecting a lot of attention away from where there are great commonalities.

Britain, even outside the EU, is a very significant state. The last thing the EU wants is to see that not moored into some level, anyway, of economic and political co-operation, if not integration now. The UK is a hugely significant security player in Europe—only France comes anywhere near close to matching UK capacity. We have the world's oldest, and arguably still most efficient, capital market, which the EU needs access to. We have—. Well over half the top universities in world rankings—they were only issued a couple of weeks ago—in the whole of Europe are in Britain, and the Erasmus programme is massively popular with the level of European students wanting access to our higher education institutions and also the ability to hone their English-language skills. And there are other examples. 

I accept that the balance of power is on the EU side. The size of the block is about eight times, or whatever, the size of the UK, and there has to be some recognition of that in the UK's position, but I don't see any irrationality in what the UK Government is going to do, ultimately. I think they're just setting up the negotiation so that they get maximum leverage. But the destruction of both sides—it may be worse for the UK, but it would be very, very significant for the EU as well, and I don't think we're a league of masochists, are we?

Of course, the UK is important in certain areas, and I think you mentioned financial services, you can mention fishing waters, and I think we can accept that. But, in terms of the EU, in terms of just how they go about trade deals—any trade deal, in general, is set up as who has the larger power. It's not saying, 'You don't have any powers at all.' That then plays it back to the UK Government. How do you wish to use the areas where the UK has a strength and what do you wish to use them for? It is not clear to me, and I don't think it's very clear to Brussels. I think something we haven't really touched on yet—there's some mystification in Brussels. What does the UK really want? Because you seem to say all you care about is tariffs on goods—all you really care about is having no tariffs—but everything else, all other regulation, you don't wish to align on anything, you wish to have all of the non-tariff barriers, all of the different regulatory barriers. You're quite happy with all of those; you don't want anything else. Surely, that goes against what pretty much every country in the world wants—this is very strange.

So, I do get that sense from Brussels, but, if all we want is this tariff-free deal, I'm afraid the strengths that you identify—let's say financial services—aren't going to count for very much. So, it's a case of, again, back to the priorities, what it is that we want to achieve. It's not clear that those strengths then play into it. I'm sure there are scenarios in which those strengths could be quite important, but I'm not quite sure what I see at the moment.

Just back on the fisheries example, yes, we have very significant fishing waters, but we also have things that we need from the EU—not so much on fishing, but, on seafood, that ability to get that product very quickly onto market within the EU is a problem. So, it's not a complete strength for the UK. It's the basis for a deal, if that's what we want, but it's not, and this is where I would very much agree with my two colleagues—. The EU is not going to do a deal on certain bases, but, if we wish to deal, and if we've decided we want a deal, there are things we can bring to it.

15:25

I'm sorry, I didn't actually hear the question, because the system decided to kick me out.

I fear it's too long to repeat. [Laughter.] What about our other panelist here?

I think the emphasis for the question was based on the fact that the UK actually is still a major state, has a very large influence in sectors such as the financial sector and fisheries, higher education. Surely, the EU would want to ensure that it has a good relationship with its neighbour in such a position. I suppose the argument is: what red lines are the EU actually prepared to give up to make sure that those strengths of the UK are not becoming a challenge for the EU if there's no deal?

I think the answer lies in the term 'red lines'. They are red lines, and they are not going to be sacrificed for particular interests. Yes, there is room for manoeuvre, there's room for negotiation, but that's beyond the red lines. You can have give and take, and I fully agree with David: you have to know what you're willing to give, you have to know what your priorities are in terms of 'take', and you have to be realistic about what your negotiation position is.

Just to give one example: yes, there's an argument that the strength of UK higher education institutions is an important facet of the future relationship. That might well be true, and, if you talk to people within the higher education sector, they will talk about how important it is to maintain co-operation, but whether that counts for very much when you have finance Ministers deciding on the next multi-annual financial framework and deciding the trade-off between what universities get, how much money—. Then it will be much more down to basics.

I think this is something that the UK has to recognise—that the moment you are outside, yes, you are, possibly, able to dock onto certain programmes and dock onto certain co-operation, but the system is not going to be changed, the rules are not going to be changed, and the advantages that the member states have from being inside are not going to be given up. So, it's a fairly basic calculation on the European side, which is not going to change.

I think it's absolutely crucial—yes, if the UK had come into these negotiations saying, for example, that Erasmus is a very important priority or that participation in Horizon 2020 is a very important priority, there would have been something that could have been talked about, but the question would have then been: what is the UK willing to give up? But, under current circumstances, where it looks like the only thing the UK wants is the most minimal of all relationships, there's not going to be much room for manoeuvre from the EU side.

I suppose the point on Erasmus—perhaps this pushes the point too far—is that it's much more important to the EU side, that there's engagement with the UK, not the other way around. That's where the flow comes. We are, for whatever reason, the country that has by far the greatest number of world-class universities, and we have other potential partners if we don't look to Europe: North America and the far east. I mean, that's what will happen. 

15:30

But that wasn't my point. I think, fundamentally, of course there are different interests, and maybe Erasmus is not an interest. My point was to say that this is about deciding what the areas are where the UK wants to co-operate, where it has a strategic interest. Erasmus might not be part of it. But that's not the point. The point is that, for the moment, at least, the message that's coming out of the UK Government is, 'We don't really want to co-operate on anything. We want to have the right to diverge on whatever we want, and the only thing we have on the table is that we want zero tariffs.' There's very little room to manoeuvre within that.

Do you think, then, that there's no clarity in Brussels as to exactly what the UK wants at this point in time?

I'm not sure there's clarity within the UK what the UK wants, so certainly there's no clarity in Brussels. 

Yes. I think there's a bit of a misconception sometimes that this is about tariffs and a fight about who can get more. This might be true in some areas, maybe in fisheries, where there's two diverging interests, but the UK—as you've very much identified—has comparative advantages in services, and it is about the governing structure of how these kinds of services will interact with each other and how they will trade. And it's very simple: if we don't have any kind of framework, the UK lawyer will not be allowed to operate in Europe the same as it is right now. So, it's not about, basically, the EU giving some kind of tariffs for lawyers and the UK gives away some kind of tariffs for cars. It's basically, 'What kinds of services are recognised in the EU?', 'What's the recognition of professional degrees?', and all these kinds of things, and as long as they've not got a framework, this will become very difficult, especially for the service sector. So, this is why such a deal is so important, especially for the UK, especially for a service sector country. 

And then we come back to the level playing field. It's about the EU has a set of rules, has a set of governing structures, and it will not allow any kind of trade agreement to undermine this kind of governance structure. So, that's where many of those red lines come from, and I feel like there's a lack of recognition of that: that it's not about, basically, 'We give away car tariffs for access to lawyers.' It's basically, 'What are the rules for all the specific sectors under the regulations under which we trade?' And then there are environmental and labour standards.

So, this is why it's so important that we have an agreement, that we have something that we can trade based on, and then the tariffs, I think, in most areas, they are secondary. So, I think, we need to be able to trade with each other, to be able to have common research programmes, we need some structure like Horizon 2020—or Horizon Europe it's called now. There needs to be some kind of structure there, and this is, I think, where we still don't see any recognition on the UK side about what they want this structure to look like. The EU, I think, they've said what they want: they don't want a Switzerland agreement, with a pick and choose of many different small agreements, because that created quite a mess. They want an overarching structure. The UK wants the minimum, but this will create a lot of tensions everywhere. So, I think there's a lack of clarity about what the UK wants, yes.

Can I just add one point? The UK's higher education sector can't be a strength if we don't put it on the table, and we don't appear to have put it on the table. If we want to put it on the table, perhaps it becomes a strength.

So, famously, it's the fortieth anniversary of Douglas Adams's The Hitchhiker's Guide to the Galaxy. He had many famous quotes, and one of them was, 'So long, and thanks for all the fish.' I just want to ask you, in all this wider discussion that we're having, how do we get past the fisheries issue, which is sooner than many of the other issues? So, we're looking at July. I understand that fisheries is a no-negotiation issue in terms of access to the waters—what are currently the shared waters around. So, how do we get past that in order to enable us to get on to the other issues?

I wasn't sure that it was a 'no negotiation' issue. I was under the impression it would be probably quite a fierce negotiation between both sides. There's a deal to be done on fish because we have waters that the EU would like access to and those waters contain fish that we don't actually eat ourselves, so we need to sell to the EU. There's a deal there to be done, which if—. And you can see that there could be a deal done. The EU has set out a starting position of wanting exactly what it has now. That is a starting position. I wouldn't get too excited about it. Obviously, that's going to be the starting position. It's probably not what they're really expecting. The UK has a starting position of absolute and total control of waters and no access at all. Obviously, that's the starting position. There is a possibility of a deal, but that's not very long, and I think the bigger issue is how often this deal has to be revisited. The UK is talking about renegotiating every year. The EU is saying that is unrealistic, but, look, if we can't do a deal on fish where there are interests on both sides in doing a deal, we're going to struggle on other areas where the interests are actually less obvious. So, I would say it is actually a very good test case, but as I say, it really should be possible to a deal.

15:35

I'm not an expert in fisheries. I agree with David that I think there's something to negotiate there. This is an area where there are numbers where you could treat them one way or the other. I wouldn't underestimate how important this issue is to some member state countries, not because fisheries is an important industry, but because it's an important constituency, and they're very vocal and for some reason, agriculture and fisheries always have a big influence on politics in most countries, so I wouldn't underestimate the importance of this issue. So it's very contentious for some countries, but I think there is something, if the rest would be solved, there would be something to negotiate on. So, yes. I don't know.

Yes. I think the difficulty with fisheries is because it has been separated out from the rest, it becomes very much a zero-sum game. What one side wins, the other side loses. Certainly, that's the way it's going to be portrayed in many places. But I do agree there is a possibility of having a deal, but I think what needs to be recognised is there is domestic politics on both sides of the channel, and domestic politics on fisheries are fierce in a number of member states. I think what really concerns me is that this conflict is not just going to be happening across negotiation tables. We know that fishermen on both sides are quite prone to taking direct action, so we have to also prepare for what happens if there are clashes in certain waters. How do we deal with that? Again, this is something where I would hope there's a lot of talking between both sides, so that we can manage those kinds of situations when they occur, and for me, that is when they occur and not if they occur.

Thank you. Perhaps we're coming towards the end of the session, but as you've mentioned a lot—all three of you have mentioned—there are other things: the work programme of the EU is ongoing. We actually haven't yet got the budget agreed and the multi-annual financial framework, which obviously feeds into all the programmes as well, so in a sense, and I suppose what we're trying to work out is how much this will influence the negotiations. The negotiations will go on, but there there'll be features, as part of the normal day-to-day business of the EU, that may have an impact upon how those negotiations move in one direction or the other. So, how critical are those other aspects of the work programme going to be to these negotiations? Oh, no quick answer.

I think Fabian's probably the best person to answer.

Yes. I mean, I think this is already the case now, and has been the case for a while. Brexit is not the top priority for the European Union. It is a potential difficulty that has to be dealt with, but there are much more important issues going on, certainly. Also if we're seeing the level of crisis that we have, looking at Greece and Turkey at the moment, looking at what is happening with COVID, there are a number of things that are on the agenda on top of what was already on the agenda with the MFF and other issues. So for the European Union, these are difficult issues to manage. They will take up a lot of political bandwidth so, if anything, it makes it less likely, in my view, that there will be compromises in the Brexit negotiations. In the Brexit negotiations, it will be in the political interest of the member states who, in the end, will be the ones who have to agree to show to their domestic audiences that they can deliver, especially if there are problems in other areas. Of course, there is cross-contamination between different issues. Just to mention one issue, if there is a request by the United Kingdom to extend the transition period, that will be very difficult to determine what the financial obligations of the United Kingdom are in those circumstances, because we don't know yet what we're going to spend on the different programmes. And so, if the UK is in longer, there will have to be some form of estimate about what that means in budgetary terms, which makes that whole process much more difficult. But in the end, Brexit is not the driving force of European policy and, if anything, since 31 January it has become less of a priority rather than more.

15:40

Yes, I agree. The topic has lost a lot of—. So, it's not the main topic on the agenda anymore. I think there is this issue of COVID-19 that might delay the negotiations. That remains to be seen, but it might put more pressure on the negotiations because the economy might be affected quite severely, so how that plays out I think is anyone’s guess at this moment. I think it’s not the top priority anymore. I think the new Commission wants to push new topics that take a lot of their political capital and a lot of political tension here. This kind of tension that we had last year or during the negotiation of the withdrawal agreement, I think, has subdued these days, which might be a good thing for the negotiation because it makes it easier to negotiate on technical terms. But, I agree with Fabian totally that it’s not that big of an issue anymore.

The UK is not being helpful either in any of this. There are ways, you know—. When you get to the question in Brussels, 'Does the UK actually want a deal?' If you wanted a deal, you might actually be making efforts to look at what the other EU priorities were and where do you play in; how do you do something helpful? You can do that. It's not clear that we want to do that; it's not particularly clear that we want a deal. And thereby Brexit, the UK trade deal, doesn't become anything of an opportunity, it just becomes a cost that's being managed while there are a number of other costs that are being managed. So, you're not that important. If we wanted a deal—as I say, I don't think under this Government that's so much of an issue—then I think you would be taking an interest in what the EU was doing and trying to push ourselves up the agenda, but that's not happening. 

I just want to pop back to trade for a minute. You've all said that there's no clarity on the UK side. Brexit, basically, was all about removing the UK from the level playing field, you know, against rules on state aid, the European Court of Justice, EU procurement rules, et cetera, as we don't agree with any of them to be quite honest. Also, why should the UK concede on its red lines if the EU doesn't? A deal to me, specifically, is ultimately about mutual agreement regardless of all the posturing on both sides. I just want to turn this one on its head for you: there are far too many EU suppliers who export to the UK who are going to pay dearly if the EU trade negotiations don't start working for them, on the EU side coming into the UK. Those business and their trade organisations will be lobbying their Governments, who will, in turn, be turning up the heat on the European Commission if they're not allowed to export to the UK if the EU doesn't do any kind of deal. I can see you smirking there. 

Yes, because it's nonsense. 

This works for both sides and it's got to be by mutual recognition, whether you're smirking about it or not. 

Can we keep that tone of language down please? I don't think it's appropriate in the committee. Perhaps the comment was: do you believe that the lobbying of the European nations by organisations that represent some of the supply chains will be strong enough to actually ensure or to try to push the EU to move some of its red lines? David, you first. 

15:45

Okay. There are a few points. I think it is worth going through them. On EU suppliers who might lose markets in the UK, that's true, but they would also be thinking that, in whatever sector they're selling in, they may gain, because UK suppliers will no longer offer so much competition to them. If you think about it, it would be harder for UK suppliers now to be their competition in their own market, so now they can sell to 27 without the UK competition if there was no deal, potentially. Therefore it's, I think, unlikely that they would put much pressure on.

There are—. As I've said before, you can make an exception, one or two exceptions, for, for example, financial services, which is why the EU does make an exception for financial services, where it's pretty clear the UK is the dominant financial services player, and therefore in that space you see potentially a different conversation, but then in that space you see the EU offering unilateral measures—or they did before a potential 'no deal'—and they quite possibly would again. But, other EU industry bodies that I talk with, there's no suggestion that they would go above and beyond what they already want. They want a deal, they've put out a document saying, 'We want a deal', but they wouldn't particularly lobby their Governments if it was going badly.

I think, in terms of the vote to leave, the different elements, I think the EU mostly gets that. It's taken time, but the EU mostly gets that it's a vote to leave something. I think when it comes to different things, though, this is where it gets confusing. What exactly were you voting to leave? Because you have level-playing-field provisions in the World Trade Organization, so it can't have been just level-playing-field provisions. The procurement system—well, you're part of a WTO procurement system, so it can't quite be exactly that. And now it seems that it's leaving more or less everything, except, for example, in the UK negotiating objectives it says, 'We want special dispensation on freight transport'. So, hang on—you do want something on freight transport, but you don't want anything special on these areas, or you do on financial services.

So, I think the question is still open on the EU side—you know, we're still not entirely sure what the UK wants. And I think the other part of that is in thinking, as you always do—when you're going through a trade negotiation, you don't just speak to the Governments of the day, you speak to the opposition, you speak to the Welsh Assembly or the Scottish Assembly, and at the back of your mind as well you're thinking, 'The Government's saying this, but lots of others—UK business, the Scottish Assembly or the Welsh Assembly, are all saying something slightly different. Therefore, in future perhaps there's a change of Government and this will look a bit different'. So, I think they would have that in their minds as well, but I think at the moment mostly the EU gets the UK, but then, on the other hand, the Commission President von der Leyen today went slightly too far in seeming to suggest the UK still wants to be part of the single market, which clearly we don't. So, I wouldn't say the EU absolutely fully get this.

I think, when it comes to the narrative that has been around from the beginning of this that somehow the companies in the European Union that will have some losses will sacrifice EU principles, or will make their Governments sacrifice EU principles, to get a deal—it hasn't happened up till now; it will not happen in future. That's not how the European Union functions, and that is just a misapprehension of what has happened and what is still not happening. There is no evidence whatsoever that anyone in any member state is pressurising their Government or the European Commission to give up on the principles that are underpinning this. If anything, it's the opposite—there's a much stronger appreciation.

When it comes to issues such as state aid and procurement, I find it strange to hear that this has never been in the UK interest. The UK has been the one that has, rightly, been one of the greatest proponents of competition policy, state-aid control, procurement opening, et cetera, at the European level. It is, very essentially, in the interests of the United Kingdom to suggest that it is somehow better for the United Kingdom not to have a Europe-wide system that applies in those areas, where competition policy at the European level has delivered enormous benefits to all member states, including the United Kingdom. I just find it strange.

15:50

I was cut out in between, so I'm not sure if I will repeat what David said, but I think, coming back to this, at the end of the day, it's about market access, to some extent. You say Brexit is about regaining sovereignty, if I understand you correctly, and the same is true for the EU. They want to keep their sovereignty, and they're the stronger partner in this negotiation. The EU will not allow any trade agreement to undermine their sovereignty in these areas. So, then it's a question for the UK: are they willing to align with the conditions that are set up, that the EU wants to set up, in this way or not? I don't see any lobbying in this regard, as Fabian was saying. I would actually say the opposite, that public opinion has shifted against Britain because of the public statement by the British Government. I think many people are fed up with this.

I hope this doesn't affect the negotiations, but I would not have any hope that European business comes to the rescue of Britain. It's very clear there are some sectors that actually will gain, and it's very clear that a lot of sectors have much to lose if the UK were to allow freer market access with the regulatory disalignment, without level-playing-field conditions. When we talk about fisheries, it's the same story. So, I don't see this, and I think there's a misconceptualisation that I see in the UK media, which I think is very far from the truth about this. Trading negotiations are also always a power game, and this is also the reason the US will not come to the rescue. At the end of the day, you're in a room, everyone has different interests and you have to find a way to trade with each other, and then the size matters—market size matters a lot.  

Thank you. We have come to the end of our time allocation. Can I therefore thank all three of you for your contributions this afternoon? It's been very interesting to have the perspective from the EU, and Brussels in particular. You will receive a copy of the transcript. If there are any factual inaccuracies, could you please let the clerking teams know as soon as possible so that we can ensure they are corrected? So, once again, thank you for your time. It's been very helpful. We've had previous discussions, and I'm sure we'll have more discussions in the future. Thank you very much. 

4. Papurau i’w nodi
4. Papers to note

If the committee now moves on to the next item on the agenda, which is papers to note, the first one is the letter from the Llywydd regarding the Social Partnership (Wales) Bill. We have drafted a response, which we will discuss under item 8 this afternoon. Are Members content to note the paper, ready for discussion later on? Thank you. 

The second is from the Minister for International Relations and the Welsh Language, following the 10 February committee meeting that she attended. Are Members content to note the paper? Thank you.

The third is correspondence from the Minister for International Relations and the Welsh Language again regarding the UK trade negotiations with the USA, dated 4 March. Are Members content to note that? Thank you. 

5. Cynnig o dan Reol Sefydlog 17.42(vi) a (ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42(vi) and (ix) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi) a (ix).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi) and (ix).

Cynigiwyd y cynnig.

Motion moved.

We move on to item 5, which is a motion under Standing Order 17.42(vi) and (ix) to resolve to exclude the public for the remainder of today's meeting. Are Members content to do so? Therefore we now move into private session for the remainder of today.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:53.

Motion agreed.

The public part of the meeting ended at 15:53.

Dysgu am Senedd Cymru