58.The memorandum of understanding (MoU) on devolution sets out an overarching agreement between the UK Government and the three devolved administrations on principles and protocols regarding inter-governmental relations. The role that the devolved administrations currently play in respect of treaties is set out in five supporting concordats. The MoU establishes a Joint Ministerial Committee (JMC), which has the following responsibilities:
[to] consider non-devolved matters which impinge on devolved responsibilities, and devolved matters which impinge on non-devolved responsibilities; where the UK Government and the devolved administrations so agree, to consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom; to keep the arrangements for liaison between the UK Government and the devolved administrations under review; and to consider disputes between the administrations.
59.In the Government’s July White Paper, Dr Fox stated that the devolved administrations and legislatures would “have the opportunity to engage with and contribute to our trade policy”. In July, the Secretary of State told the House that the Government would “run events in all regions and nations of the UK to seek their views on how prospective trade agreements could support prosperity and growth”, and would conduct “a series of collaborative policy roundtables with Devolved Administrations recognising the close interaction between trade policy and devolved policy areas.”
60.As the House of Commons Library notes, the provisions for oversight and scrutiny of trade agreements in CRAG are limited in relation to the devolved administrations: “There is no legal requirement to consult the devolved executives and legislatures, which have very limited involvement in treaties.”
61.Mr Hollingbery set out to us recent interactions the Government has had with the devolved administrations, stating: “As far as I am concerned, there is a genuine and real uptake in the amount of engagement we are having.”
62.The Law Society of Scotland told us that “UK withdrawal from the EU offers an opportunity to review the procedures in place for negotiation of international trade agreements […]”. The Scottish Government’s submission to our inquiry stated that Brexit will “fundamentally change the nature of the UK as a state, and impact on the UK’s current constitutional arrangements […]”. As such:
The way in which the UK and devolved administrations approach international trade policy and agreements will have to change radically to reflect a very different, and more challenging, context.
The Scottish Government continues to argue that current practices in relation to the devolved administrations are inadequate, out of date, and in need of “an urgent and substantial overhaul”:
63.Ivan McKee MSP, Scotland’s Minister for Trade, Investment and Innovation, told us in oral evidence that, because of the complexity and policy coverage of modern trade agreements:
our clear position is that all the devolved administrations should be involved in all aspects of trade negotiations right from the very beginning. That is deciding what countries you want to go into trade deals with, right through the process of defining your objectives, selecting a negotiating team, putting them in place, monitoring negotiations, through to scrutiny, ratification and implementation. A formal statutory structure should be put in place at a UK level to enable that to happen.
64.The Scottish Government has stated that its proposals for increasing interaction with UK trade policy, detailed in this chapter, should be formalised through legislation.
65.Sally Jones, Global Brexit Insight Lead at Deloitte, noted the importance of having the support of the devolved administrations from a business perspective:
It would be very difficult from a practical perspective to agree a national-level free trade agreement that did not have the support of the devolved assemblies that are ultimately going to have to create the legislation under their competence that would enact it. I would entirely think that involving the devolved assemblies and the regions is critical.
66.The Scottish Government proposed a statutory intergovernmental international trade committee to facilitate effective trade policy dialogue between the devolved administrations and the UK Government, which
would pull in the different devolved Administrations and the UK Government right at the very start of that process so they were involved right from defining who we are going to do trade deals with, what we are trying to get out of them, what the negotiation stance is, what the roadmap for the negotiation is, what happens to the negotiations, what happens at the scrutiny process and what happens at ratification and implementation. Right through that process the strength would come from having the devolved Administrations there and firmly involved in the process.
Mr McKee saw the:
JMC structure at the moment as not being robust enough in total and not robust enough to deal with trade policy and trade negotiations. […] [I]t may well be that a beefed-up JMC on trade may work if it is developed.
67.This is supported by the Welsh Government, which has stated that a Joint Ministerial Committee on International Trade would:
enable timely and comprehensive consultation on overall trade policy and individual trade negotiations […] [and provide] the governance structure needed to allow Ministers from the four administrations to work together to agree on priorities for trade negotiations, particularly in respect of areas of devolved competence.
reach a consensus on any draft negotiating mandate before it proceeds to the UK and Scottish parliaments and the Welsh and NI assemblies, and should be revisited if the mandate changes during negotiations.
69.The Welsh Government agreed, noting that the JMC could:
provide the governance structure needed to allow Ministers from the four administrations to scrutinise a negotiating mandate for trade negotiations in a strictly confidential way.
70.Trade Justice Scotland pointed to the role of Canada’s provincial governments in shaping the Canadian mandate for the EU-Canada Comprehensive Economic and Trade Agreement (CETA) as an example of a potential model for sub-national actors’ involvement in trade policy, as “the mandate for the negotiations was drafted with input from the provincial governments […]”.
71.A Trade Model That Works for Everyone proposed that the devolved administrations’ representatives should work alongside negotiators on negotiating teams. Trade Justice Scotland again pointed to the CETA negotiations as an example of such an approach:
provincial negotiators were present during the bilateral talks with the EU, and they also participated in a pan-Canadian trade committee which worked between negotiations to agree and set the Canadian position for future talks. And all the negotiating documents were made readily accessible to provincial teams.
72.The Welsh Government also called for “Welsh Government officials to be part of the negotiations”, suggesting that this could be “in the room” or “in the room next door”.
73.Others have pointed to other ways to involve devolved administrations through negotiations. Ms Thimont Jack, of the IfG, argued that engagement through the JMC throughout negotiations would be a way in which the UK Government could have “extensive consultation” with the devolved administrations during negotiations.
74.Mr McKee told us that the Strategic Trade Advisory Group, which has been put in place to advise Government throughout future negotiations (discussed in detail in Chapter 5), provides “no real role for the devolved administrations […] [T]here is an absence of any willingness to involve devolved authorities in any of those processes and structures.”
75.The Scottish Government has stated that new trade agreements with:
otherwise devolved content, or which touch on devolved issues, must be agreed by the Scottish Government and Scottish Parliament. Given the scope of modern trade agreements, in practice, this would almost certainly mean all such agreements.
76.Global Justice Now argues for a “full debate and binding vote on the ratification of all future trade agreements” for the devolved administrations, while War on Want argues that the consent of the devolved legislatures should be secured using the current legislative consent process.
77.Ms Thimont Jack told us that:
I think the challenge for the UK is the way that our constitutional settlement works. With Canada you have a clear division of powers at the provincial and federal levels. We have the challenge in the UK of the UK Government acting for England and we also have the Welsh, Scottish and Northern Irish Governments, when there is one. That is the way the devolution settlement works and it makes it quite challenging to give a proper veto to the devolved Parliaments.
78.The arguments for increased transparency relating to trade documentation, and our conclusions and recommendations in this respect, are set out in Chapter 2. Specifically regarding access by devolved administrations, the Minister for Trade, Investment and Innovation in the Scottish Government told us that:
there is absolutely no reason why we should not see documents that relate to negotiations. That is different from what is potentially in the public domain.
79.The Law Society of Scotland argued:
At a minimum, trade policy documents, including negotiation texts, should be made available to parliamentarians, both in Westminster and the devolved administrations and legislatures, to enhance transparency, facilitate scrutiny and strengthen democratic accountability.
80.Trade Justice Scotland coalition put forward the example of documents being made available to provincial negotiators during CETA negotiations, where “all the negotiating documents were made readily accessible to provincial teams.”
81.The Scottish Government has advocated considering the Canadian model in the context of considering how devolved administrations should be involved in trade policy formulation, and the Trade Justice Scotland coalition told us that:
there are many examples of how regional, provincial and state parliaments and their representatives are involved in the negotiation and ratification of trade deals.
82.The Scottish Government did, however, make clear that the UK should not be limited by current models, but should instead build on them, noting that “the circumstances currently facing the UK are unique, and the response must be too.”
83.It is crucial that the Government take account of the views of each nation and region within the United Kingdom in formulating an independent trade policy. Current structures are not sufficiently robust to provide for structured engagement and extensive consultation.
84.The Government should form a statutory UK intergovernmental international trade committee. The UK Government should have a duty to: consult the committee on the mandate for future trade negotiations; regularly update the committee on progress with negotiations; and consult the committee on the final text of an agreement prior to ratification.
85.A representative from each of the devolved administrations and the Local Government Association should be included on the Strategic Trade Advisory Group (STAG), to allow Government to consult with them in detail throughout the negotiation process—in addition to the intergovernmental committee.
67 Scottish Government, , October 2013
68 Scottish Government, , October 2013
69 Department for International Trade, , Cm 9470, October 2017
70 Department for International Trade, , 16 July 2018
71 Parliament’s role in ratifying treaties, Standard Note , House of Commons Library, February 2017
73 The Law Society of Scotland ()
74 Scottish Government ()
75 Scottish Government ()
77 Scottish Government ()
81 Ken Skates AC/AM, Cabinet Secretary for Economy and Transport ()
82 Scottish Government ()
83 Global Justice Now ()
84 Ken Skates AC/AM, Cabinet Secretary for Economy and Transport ()
85 Trade Justice Scotland coalition ()
87 Trade Justice Scotland coalition ()
88 Ken Skates AC/AM, Cabinet Secretary for Economy and Transport ()
91 Scottish Government, , August 2018
92 Global Justice Now ()
93 War on Want ()
96 The Law Society of Scotland ()
97 Trade Justice Scotland coalition ()
98 Scottish Government ()
99 Trade Justice Scotland coalition ()
100 Scottish Government ()
Published: 28 December 2018