Yes, thank you, convener—I will be brief.
The UK Government has described the main purpose of the bill as being to provide the key measures required to build a future trade policy for the UK once it leaves the European Union. The bill is in three parts. Parts 2 and 3 fall within reserved areas; part 1 is relevant to devolved matters and, along with schedules 1 to 3, is covered in some detail in the Government’s legislative consent memorandum.
Clause 1 provides powers for both Scottish and UK ministers to make regulations to implement the Government procurement agreement. Clause 2 provides powers for both Scottish and UK ministers, within devolved competence, to make regulations to implement qualifying international agreements. Schedules 1 to 3 establish and then constrain devolved competence for the purposes of the exercise of those powers, along similar lines to the approach taken to Scottish ministers’ powers in the European Union (Withdrawal) Bill.
The powers in the Trade Bill are designed to operate alongside the powers in the European Union (Withdrawal) Bill. The UK Government has said that it expects that, in most cases, the implementation of any obligations within existing international trade agreements would be dealt with through the European Union (Withdrawal) Bill. There will be certain circumstances where that may not be possible, and the provisions that are set out in clause 2 of the Trade Bill are intended to bridge that gap.
The LCM makes clear that, if the UK is to leave the EU, the Scottish Government agrees to the need for provisions that seek to maintain continuity in trading relationships and to ensure continued access to UK Government procurement markets. Such provisions, including those in the Trade Bill, would provide some continuity for businesses, employees and consumers.
The LCM also makes clear that the Scottish Government welcomes the powers that Trade Bill confers on ministers. However, the Government cannot recommend to Parliament that, at this stage, it gives consent to the bill as drafted. The Welsh Government takes a similar position. The Government’s position on the bill is set out in the LCM, and its reasoning is consistent with the approach that it has taken in response to how powers are conferred on devolved Administrations in the European Union (Withdrawal) Bill.
On 18 January, the Scottish and Welsh Governments published a number of draft amendments to the Trade Bill. The amendments were tabled at Westminster and debated at the committee stage of the Trade Bill, although none were passed. We have had discussions with the UK Government and officials in the Department for International Trade before and since the amendments were debated, and I expect those discussions to continue.
The Secretary of State for International Trade has subsequently written to Scottish and Welsh ministers acknowledging the links between discussions on possible amendments to the European Union (Withdrawal) Bill and the Trade Bill. Dr Fox confirmed that the UK Government would want to reflect the outcome of the discussions by bringing forward changes to the European Union (Withdrawal) Bill and that he would want to adopt that approach on the Trade Bill.
It might not be possible to identify which trade agreements may need to be implemented through the Trade Bill until nearer exit day, but it might help if I give some brief examples. For organic products, EU regulations set out a list of third countries whose standards are treated as being equivalent to those of the EU, making import arrangements simpler. Those equivalence arrangements will be incorporated into domestic law by the European Union (Withdrawal) Bill, but trade agreements might include requirements of their own for what is to be treated as equivalent. The EU’s existing trade agreements with third countries are already reflected in the EU regulations, but if anything changes when the UK develops its own trade agreements with those third countries, there will be a need to bring legislation—on organic standards in this example—into alignment.
Similarly, some trade agreements, such as the Canadian deal, include provisions on mutual recognition of professional qualifications. Although EU law is currently in line with those agreements, if anything changes when the UK develops its own trade agreements, there will be a need to bring UK law into line.
The closer that any UK third-country agreements are to existing EU third-country agreements, the less likely it is that the power in this bill will need to be used. We understand that the UK Government has not yet identified any area where it—or we—will definitely have to use the power; it is there as a back-up to avoid a situation in which so-called grandfather trade agreements cannot be brought into force because domestic law cannot be updated.