5. Statement by the Minister for International Relations and Welsh Language: Update on Trade Policy

– in the Senedd at 5:18 pm on 7 January 2020.

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Photo of Elin Jones Elin Jones Plaid Cymru 5:18, 7 January 2020

(Translated)

The next item is a statement by the Minister for International Relations and Welsh Language— update on trade policy. I call on the Minister to make the statement—Eluned Morgan.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour

(Translated)

Thank you, Llywydd. As the UK prepares to enter into a new phase of negotiations that could fundamentally alter the Welsh and UK economies for decades to come, trade policy has come to the fore. The general election has made clear that Brexit will happen, and with it the potential for multiple parallel trade negotiations arises. And it's worth noting as well that the general election also saw Welsh Labour's share of the vote exceed that in 2010 and 2015, and all Senedd elections, other than in 2011. So, the Welsh Government still has a clear mandate to speak up for Wales across the UK, particularly on devolved issues.

The Senedd passed a motion in December calling for a formal role for devolved institutions in negotiations on international agreements. The External Affairs and Additional Legislation Committee has also published a report providing more detailed recommendations. All of those appear to me to be sensible, and I will respond formally to them in the next month. I'm keen to work closely with the committee to ensure that they remain informed on developments.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 5:20, 7 January 2020

(Translated)

Securing a meaningful role in international negotiations is therefore our absolute priority in the coming weeks, as preparations for negotiations ramp up. We want to ensure a clear role for the Welsh Government, so we will need robust mechanisms, not just for us to effectively represent Wales, but for the integrity of the union as well.

We are eager to ensure a clear role for the Welsh Government in all aspects of future trade negotiations. We aim to be constructive partners, and we believe a collective UK position, reflecting and respecting different priorities across all nations of the UK, can only be a source of strength in undertaking complex negotiations with powerful trading partners.

You can be clear that the EU will seek to balance the priorities of all 27 member states, involving them in setting a mandate and informing negotiations. This is part of what makes them formidable negotiators. The UK can equally balance the priorities of the four nations of the UK, and its negotiating hand will then be the stronger for it.

As a United Kingdom, it's essential that we learn lessons from the article 50 negotiating process and avoid repeating the same mistakes made by the previous Secretaries of State. There are two specific aspects that I want to highlight, but there are others. These are: first of all, the need to build consensus, and the second is being open about the trade-offs that are inherent in any trade deal.

Firstly, across the whole of the UK, we must build a shared vision, based on what we want our economy and future trading relationships to look like in future. This vision needs to be based on evidence and engagement with key stakeholders. All nations of the UK need to come together to develop and agree negotiating mandates. And these mandates will balance the interests of all parts of the UK and all parts of society, not just those in England. Scrutiny and debate are an essential part of any democracy and these should be embraced as a mechanism to improve trade policy and build cross-party consensus. This will then avoid subsequent Governments seeking to reopen or renegotiate agreements, when they come into power.

When the UK Government reintroduces the trade Bill, which deals with replicating existing EU trade agreements, we will press the UK Government to preserve the amendments that led to this Senedd giving its consent. But, if they now introduce legislation to provide a basis for the negotiation of new international treaties, we will demand that we too will have a role as devolved institutions, and that that role is then embedded in the new legislation. In the same vein, we will also seek support in the House of Lords to amend the withdrawal agreement Bill to formalise such a role with regard to EU negotiations.

A broad consensus also needs to reflect views of businesses, communities and citizens across the United Kingdom. We should at least match the EU and US by demonstrating transparency and encouraging public debate. We stand ready to work constructively with the UK Government to help build this consensus, and this includes being clear about how to protect our NHS in trade deals.

(Translated)

The Deputy Presiding Officer (Ann Jones) took the Chair.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 5:25, 7 January 2020

It's worth pointing out that our trade negotiations with the EU will be unprecedented, as they'll ultimately lead to increasing barriers to trade, rather than removing them. All scenarios envisaged by the Tories lead to increased friction with our closest and most important trading partner. And all the credible evidence shows that the benefits associated with ambitious trade agreements with the US, Australia and New Zealand combined will in no way compensate for the reduction in trade with the EU. We recognise the benefits and opportunities of new trade deals, but our immediate priority must be to minimise the impact of new barriers to trade with the EU.

So, this brings me to the second key issue. We need to be open and transparent about trade-offs associated with each trade deal—the trade-offs between multiple negotiations taking place in parallel. Choices will have to be made, and there will be winners and losers.

Within individual negotiations, we must not to lose sight of the interests of consumers, as well as producers. In some cases, the benefits for consumers of lower prices would outweigh the risks to uncompetitive sectors, for which a phased period of adjustment could be negotiated. In others, the need to sustain jobs and protect employers from predatory practices in other countries will clearly be paramount. We also need to balance our economic interests from our wider responsibilities under the well-being of future generations Act, and we want to ensure that we promote, not undermine, environmental and labour market standards and global action to tackle the climate change emergency.

One clear trade-off between different trade negotiations is the degree to which the UK prioritises a close trading relationship with the EU against an ambitious trade deal with the US. Each will seek alignment with their regulations, such as for food safety. So, continued alignment with the EU could limit the economic cost to the UK and maintain the integrity of the UK internal market. On the other hand, aligning with the US will have a higher economic cost and risks fragmentation of the UK internal market as well as the potential of weakening the union.  

We've been clear that the evidence overwhelmingly points to prioritising our relationship with the EU as our most important trading partner. This reflects a broad consensus amongst businesses and academics. It also recognises the twin realities of an aggressive 'America first' policy: that without a substantive EU trade deal, we'll need to rely on World Trade Organization rules. And there's still a possibility that we could leave the EU with no deal, which will cause unnecessary economic damage across the UK. This will be particularly dangerous at a time when the WTO appellate body for resolving disputes is being undermined by the United States. The self-imposed and unrealistic time constraints from the UK Government only serve to weaken our position in both negotiations.

Within the Welsh Government, we're building new capacity to rise to these new challenges and to identify the new opportunities that will arise. We're bringing together our work on EU negotiations, future trade negotiations with third countries, the development of common frameworks across the UK, and our thinking on the UK internal market. As a small, agile and outward-looking country, we can support the UK Government in helping identify regional impacts of trade policy options and trade-offs. We can draw on our networks across Wales, and make connections across policy areas that are difficult for large Whitehall bureaucracies to identify.

We're going to establish an expert stakeholder advisory group to inform and test our trade priorities for Wales as the negotiations progress. This will ensure that Welsh businesses, civil society and consumers will have a voice, and I'll of course keep the Senedd updated on our work on trade policy.

So, my priorities in the coming weeks will be to make progress on establishing formal intergovernmental machinery and securing a clear role for the Welsh Government in future negotiations. And as a part of this I'll press for transparency in UK trade policy, starting with agreeing negotiating mandates across the UK, and for those to be published. I'll continue to make the case for prioritising our trading relationships with the EU, whilst exploring opportunities for future trade deals that offer opportunities for Welsh businesses and consumers. Diolch, Llywydd.

Photo of Darren Millar Darren Millar Conservative

Thank you, Deputy Presiding Officer, and can I thank the Minister for an advance copy of her statement today? I'm a little surprised by the tone of the statement, because, of course, you say you want a close working relationship with the UK Government and yet you do everything that you can to offend them in terms of the things, frankly, that you have just said. 

To start your statement by lauding the Labour Party's performance in the recent general election, when you lost a significant number of seats in Wales, I think many people would find pretty rich, including on your own benches.

You also, of course, made a number of idle threats about what you're going to do if the UK Government don't listen to you. You're going to table amendments in the House of Lords and you'll put the kibosh on this and the kibosh on that, when the reality is that you have very little ability to stop whatever the UK Government wants to do. So, as I said in my contribution in First Minister's questions today, I think it would be far better if you had a team UK approach when it comes to trying to get the best possible deals for Wales when it comes to our future trade arrangements internationally, rather than having this combative approach all the time. Now I'm the first one to say that I'm very combative myself and to acknowledge—[Interruption.]—and to acknowledge my shortcomings in that respect. However, I do think that when it comes to intergovernmental relationships it's very, very important to get off on the right step. We have a new UK Government, we have a new Secretary of State for Wales and a new Wales Office Minister as well, and I think, frankly, it would be far better if the Welsh Government was making warmer noises in respect of that relationship, going forward.

You also, of course, seem to still be harking back to pre-general election debates—the same old shroud waving about the damage that Brexit is going to do to the Welsh economy. Now, it's up to you whether you want to keep that scratched record on the table, still going around and around, but, again, I'm not quite sure that's helpful. I think the people of Wales and the people of the UK have moved on, frankly—they want to get Brexit done, they're supporting a UK Government, which has a very clear and a significantly bigger mandate than your Government has here in Wales in terms of the arithmetic in this National Assembly, and I think that, instead of that scaremongering, what you should be doing is talking up the opportunities for Welsh businesses and looking for the places that you think can be identified where Welsh business internationally would be able to prosper.

You mention in your statement that you're going to establish an expert stakeholder advisory group. I wonder if you could tell us a little bit more about the timetable for the establishment of that group, how big you think it needs to be, which industries should and shouldn't be represented on it, whether that will be a formal stakeholder advisory group where members will be paid, and, if so, what are they going to be paid, because I do think that there will potentially be—given the influence you clearly want to exert in every single trade deal, given what you've said in your statement, I do think there will be a capacity issue, an expertise issue and challenge for you within the Welsh Government if you want these sorts of levels of influence, if, effectively, you want a seat at every negotiating table, which I think frankly is a bit impractical. 

I, for one, trust the UK Government, with the Wales Office and the Department for International Trade, to represent all parts of the United Kingdom and the United Kingdom's interests as a whole. And, of course, there will be trade-offs. Within England also, there will be trade-offs between different regions within England, let alone between the different nations of the United Kingdom. And, of course, it's for Her Majesty's Government, frankly, to weigh those in the balance, and decide which trade agreements should proceed and on what basis.

Now I accept—I accept—and I think it's absolutely right that the Welsh Government should be informed, should be kept up to date, should be allowed to state its priorities. I think they're all perfectly reasonable things for any Government to do. But I think to suggest—. And I think the direction of travel with what you were saying was almost that you'll have a veto on things, and perhaps you can tell us whether that's your stated intention as a Government. That will not necessarily be very helpful. So, I look forward to the publication of your international trade strategy. I think that you could do with one, because I'm not quite sure that we got all of the detail that we needed today. I know that you've got an international strategy, but I think an international trade strategy would be quite helpful in terms of where you want the investment to come in from, where you think we can do business in the world as a small nation within the UK. And, if you've done any of that scoping work then perhaps you'd be able to share it with us as Assembly Members.

But I want you to know this, in closing. I want you to know this: on this side of the Chamber we're prepared to work with the Welsh Government and the wider stakeholder base here in Wales in order to promote trade. One of the things that we have called for over the years is for the Welsh Government to appoint trade envoys from all political parties and no political parties in order to make the case for improved trade relationships between Wales and the wider world. Will you now consider doing just that in order that we can make a team Wales within a team UK approach really work for the benefit of everybody?

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 5:36, 7 January 2020

First of all, listen, I recognise that we lost seats in the general election, but we still won more seats than the Tories and that means that we do have still a mandate to speak up for the people of Wales. We have our own mandate here in this Chamber and that is our responsibility, and that's why we do have a responsibility to make sure that we are feeding in to these trade negotiations.

I've got to tell you that, actually, we are keen to engage constructively with the United Kingdom and have been engaging constructively with the United Kingdom Government. I've already had a significant number of conversations with the new trade commissioner, Conor Burns, and we were hopeful that the new ministerial body that was going to be set up to look at the trade issues across the different devolved departments—. That was meant to meet just before the general election, so we are looking forward to seeing that again. We are disappointed, however, at the fact that we've been talking about the concordat and what that relationship will look like for months and we'd like things to move on, because we are really short of time now.

So, we of course are keen to make sure that we engage and we will continue to engage with the UK Government. Of course we now accept that Brexit will happen, but also I think we've got to be clear that we believe—just because there's been a general election that doesn't mean that we don't believe that there will be damage as a result of Brexit. Academics have told us that that's going to be the case, economists have told us that that is going to be the case, and the fact is that 60 per cent of our trade in goods is with the EU. So, anything that is going to build barriers between us and the EU is likely to have a negative impact and I don't think it's remiss of us to point that out.

We will be setting up this expert advisory group and I'll give you more information on that next month, but what I can tell you is that we've already carried out some extensive analysis about the key sectors that export in Wales. We have yet to analyse that information, but the key thing for us to do when we do go into these negotiations is, where possible, the strength of our argument will be much greater if we're able to base it on evidence. That's why getting this expert advisory panel, I think, is crucial.

I've not said anywhere that we are asking for a veto in relation to trade. We recognise that the UK Government is the lead partner in relation to trade. But, obviously, when it comes to devolved issues, then we expect to have a major say and we would want to make sure that this Assembly also has an opportunity to feed into that. 

Just finally on the trade envoys, I've been meeting with some of the UK trade envoys just to make sure that they're aware of what the Welsh offer is and that's something that we're planning to do a lot more of in future to make sure that people understand what the Welsh offer is, and some of that will come out in the international report next week.

Photo of Delyth Jewell Delyth Jewell Plaid Cymru 5:39, 7 January 2020

(Translated)

I would like to thank the Minister for her statement today and wish her a happy new year at the beginning of a crucial year for Wales. 

You say that the Welsh Government now recognises that the UK will leave the European Union, and Plaid Cymru agrees. Now that the Conservatives have a majority, we know as a fact that we will leave the European Union at the end of this month. We will therefore use all of our energy from here on in to do everything within our ability to safeguard Wales’s interests and its people’s interests as that process proceeds. So, I welcome this timely statement today.

It’s a cause of concern that inter-governmental structures are yet to be established, as you’ve just mentioned, in order to enable Governments and devolved Parliaments to influence the trade negotiations before they begin. There was some mention, and you’ve already referred to this, about establishing a joint ministerial committee, or a JMC, specifically in relation to trade. Can the Minister provide us with an update as to whether there is any intention to establish that body, because, without it, it’s very difficult to see how your Government will succeed in ensuring that Welsh interests are represented? Could I also ask whether you've had an opportunity to meet with the trade Secretary, Elizabeth Truss, since the election, in order to emphasise the need that Wales’s voice should be heard?

I agree with you that the work of scrutinising the Trade Bill in Westminster will be crucial. Therefore, can you give me any idea as to how this Parliament will have an opportunity to contribute to that work, as it will have a direct impact on our economy here in Wales? I am interested in your plans to introduce amendments to the Trade Bill in the House of Lords. Can you give us any ideas as to what kind of amendments you will seek to introduce?

Turning to the detail of the trade deals that will be negotiated by the UK Government, there was a heated debate at the end of last term as to what would be the best approach in terms of safeguarding our health service in light of possible threats of a trade deal with the United States. Plaid Cymru wants a Welsh veto over any agreement, but your Government’s stance, as you've just said, was that ensuring an official role for the Parliament would be more appropriate. So, have you made any progress in trying to secure this?

America, of course, isn't the only nation that we will be making trade deals with. Australia and New Zealand, as you've already mentioned, will also be high on the list. Now, I know that the Welsh agriculture sector will want to hear a firm, robust statement from you that your Government will do anything it can to safeguard their interests during these negotiations, because many are concerned that cheap lamb and beef from these nations could flow into our market, putting Welsh farmers at a disadvantage. I would also urge you to make it clear to the UK Government that an investor-state dispute settlement would be unacceptable for us here in Wales, as this would enable businesses to sue the Government for providing public contracts to public bodies.

Now, you've mentioned that we need to prioritise trade with Europe, rather than the nations that I've already mentioned, so I would like to know whether you have any plans to introduce a continuity Bill to ensure that our regulations keep pace with changes in Europe.

And, finally, all of the issues that we've discussed today are happening in the absence of an international strategy from the Welsh Government, and such a strategy is crucial now in ensuring that the Government operates in a co-ordinated manner and does strive towards specific targets and outcomes. It's not good enough that this still hasn't been published, with us leaving the European Union in 24 days' time. So, can you ensure that you will publish that strategy for this latest deadline, which is the end of this month? Leaving the European Union will pose huge challenges for us as a nation, but we have survived such challenges in the past, and, in order to ensure the best outcome for the people of Wales, each and every one of us in this Senedd is duty bound to roll up our sleeves and to work hard for the future of Wales, and that means having a robust trade deal in place. And I do very much hope that you will be willing to meet that challenge, Minister.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 5:44, 7 January 2020

(Translated)

Thank you very much, and a happy new year to you too. I do agree with you that our major aim now is to ensure that we safeguard the interests of Wales, and my concern too is the fact that the ministerial forum still hasn't met. It's not because of a lack of intervention and requests from us; we have been asking this month after month. Unfortunately, the general election came in December, because a date had been set. There was, in the command paper that was written on trade in 2019, a commitment to create that forum, so we are confident that it will come into being. I haven't met Elizabeth Truss yet, but I have had several meetings with the person who is taking the discussions forward, Conor Burns, and I've spoken to him on several occasions.

In terms of scrutiny, I do think it is vital that this Senedd does have an opportunity to scrutinise any agreements that are reached. Of course, in terms of the amendment in the Trade Bill that was paused in the House of Lords, what was disappointing was that we'd succeeded in having many things agreed whilst that went through the House of Lords. I have discussed this with the Minister and he was very clear that he would be content to ensure that those were respected when the new legislation comes forward, when this new legislation is tabled in Parliament.

I do think it is important that the Assembly should have an opportunity to scrutinise, but it’s interesting to see, isn't it, in terms of the withdrawal agreement Bill, that there has been pushback from the Conservative Government in terms of what the role of Parliament in Westminster is in terms of to what extent they can see what happens as the discussions and negotiations go ahead. I think it would be very difficult for us to ask for more here than they receive in Parliament in Westminster. But I'm sure there will be a great deal of pushback against that, as the legislation goes through both Houses of Parliament.

Of course, our priority is to ensure an agreement with the European Union. I think, in terms of a continuity Bill, it’s too soon for us to look at that, so we need to see to what extent the current situation can be respected. And with regard to the international strategy, I can say to you that that will be published next week. Thank you.

Photo of David Rees David Rees Labour 5:47, 7 January 2020

Can I thank the Minister for her statement today, and in particular her appreciation of the committee's work and the recognition that she thinks we actually have provided some sensible recommendations? But I have a few questions. The thing that's been pointed out—and I think it's important for us to remember—this is not about leaving the EU, that's done and dusted, we all know that, I'm trying to actually make that clear, but this is about how Wales can benefit once we have left the EU and to ensure that any trade deals that take place are to the benefit of the people of Wales and not detrimental to the people of Wales. That's crucial for us to understand that. Forget the arguments, this is about our future and getting it right. 

Minister, in your statement, you identified a few things, and I'd like to ask a few questions related to that. You talked about the JMC trade, and Delyth Jewell has already raised a question on that. It is important how far we're going on that, because we were told in the committee many times that this was being discussed, we're still not there. We are weeks away from departing the EU, when negotiation will then start on the future relationship, and we need to understand where we are with that and where the UK Government is with that and what they see it as. Because Europe has its own negotiators ready, Michel Barnier has been appointed and he has appointed his deputy. Their side is ready. Where is our side in the sense of the devolved nations?

Therefore, are you also having discussions with your Scottish counterparts to ensure that there's an unanimous voice together going into the meetings of the JMC to put this on the agenda, to make sure that Welsh and Scottish voices, and Northern Irish when they get into an Executive, are going to be heard as part of the negotiating process? Because I think it has been mentioned by the First Minister before—having that opportunity to have a say in the negotiating position is far more beneficial to all the parts of the UK than having to be told at the end of it all. So, as I said at the beginning, being able to go with it and therefore be part of it is going to be hugely beneficial to the whole of the UK, full stop. 

You also mentioned trade-offs. The question, I suppose, is what type of trade-offs will be acceptable, and will the Government come back to the Assembly to discuss those trade-offs, because what might be acceptable to Government may not be acceptable to the Assembly. And I've got an example, because we talk about data—data is an important commodity, but will data and transfer of data be one of those trade-offs? So, will we have—? People have data, businesses have data. But, if you pass that data on to certain companies in certain countries, who knows where it ends up? So, the question is: what is the trade-off, and will you come back to the Assembly with your consideration of what is acceptable as a trade-off? 

Will the Welsh Government be reviewing EU laws and regulations? Because you mentioned regulatory alignment, and it is likely that in a future relationship we will diverge. Otherwise, why are we leaving if we're not going to diverge? So, there will be divergence. But how will we in Wales look at those EU laws and regulations and will the Welsh Government be acting, through the statutory instruments, because I think the First Minister mentioned that yesterday, to keep regulatory alignment where we have devolved responsibilities so that our exports can meet still the regulations that the EU will be operating, even if the UK doesn't keep regulatory alignment?

Will you be operating through the Brussels office to strengthen the relationship with the EU? Because, once we're outside the EU, we will not have a direct link into the EU, but the Brussels office becomes an important component of the role Welsh Government have in setting up a discussion with the EU. We might not be negotiators, but it's always about influencing, talking, having an opportunity to expand our position so that the negotiating side on the other side of the table have a wider picture.

You also talked in your statement about the stakeholder advisory group. Can I ask where the information that you intend to give that will come from? Is that going to come from the UK Government? So, if you're going to give that information to the advisory group and ask for their opinions, will that be coming from—? Because it's all on the negotiations. Where will it come from? Will the UK Government be giving you the information that you can pass on to the advisory group, and will you be allowed to share that with the Assembly? Because very often we are told sometimes that Governments give Governments information and we can't pass it on because it's confidential. So, how will we know what the stakeholder group is doing and is it doing it properly—how can we scrutinise those processes?

You've talked about the Trade Bill and the amendments, and it's been mentioned by Delyth—and Darren—what happens if the amendments aren't accepted, but, first of all, the first question is: is the new Trade Bill the same as the old Trade Bill? Because we've seen changes in the EU withdrawal agreement Bill. Do you have any indication as to whether there will be changes in the Trade Bill? Because that Trade Bill did require an LCM; a new Trade Bill, an amended Trade Bill, might not require an LCM. So, have we any pictures of where the Trade Bill is at this point in time, and is it going to be the same one?

I think it is important for us to remember one thing, particularly on these benches. The transatlantic trade and investment partnership was a big issue. It was actually defeated by the European Parliament—they ruled certain things out. As mentioned, the investor-state dispute settlement issue was a huge matter. And it doesn't have to be the US, by the way, because Sweden is doing it to Germany now. We don't want a repetition of that, and therefore there is an important aspect as to how institutions across the UK—the Scottish Parliament, the Welsh Parliament—have an opportunity to have a say on such things. I personally wouldn't want to see TTIP being enacted in any agreement here, but there's a very strong possibility that that might be reintroduced by the Americans, who, as we all know—and Donald Trump said it in his inaugural speech—put America first, and they will look to see exactly what they can do with that process. We need to be vary wary of these matters.

Photo of David Rees David Rees Labour

Yes, I will wind up, Deputy Presiding Officer. It is important for us all to remind ourselves that what we're trying to do is to ensure that our businesses are able to operate beyond Brexit, and therefore these discussions are crucial.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 5:54, 7 January 2020

First of all, can I thank the committee Chair for the really good paper, which I was able to read over Christmas? I thought that was really useful, and I think, if people are interested in this issue, particularly the legal aspects of where we stand as a body here in the Senedd, that that is very much worth looking at.

Just on the JMC trade, I can't tell you—every single moment and opportunity we have we are pushing for that to be set up. One of the things that we are trying to do is to see if we can set up the terms of reference, so that we're ready to roll once it starts. I'm hoping, now that the election's out of the way, that we will see some speeding up of the situation. The key thing for me is that in the commendations by the UK Parliament in the past, what they've said is that they want to see, the UK Government wanted to see transparency and inclusivity as a core part of how they negotiate trade deals. Well, it's not quite as transparent and inclusive as perhaps we would have liked to have seen, but, listen, we are still anxious and keen to make sure that we have a constructive relationship.

Your other question was on devolved legislatures and to what extent we can work together. Well, hopefully, this cross-ministerial body will be a forum for us to do that, and there are opportunities, obviously, for us to meet with the other devolved legislatures prior to that. But it's not just about the devolved legislatures, there are actually lots of different Government departments that may not have the same priorities within the UK Government as the people leading on trade. So, Lesley Griffiths, for example, is very engaged in the future of agriculture. Now, they may have a different say and a different opinion on what that should look like, which may not be the same view as, for example, the Treasury department. So, we've got to look for our allies where we can in terms of this trade negotiation, and that's where this flexibility will come in, and we'll need to make sure that we build up those priorities.

There will be trade-offs. Flexibility and timings are things that we will need to bear in mind. The more we diverge from the EU in terms of regulations, the more difficult it will be for us to trade with them. So, I'm very clear that we in Wales would like to see that regulatory alignment remain as far as possible, because that means that 60 per cent of our trade continues to be able to access that market if they agree to that. Because it's not just about tariffs and all that; it's the non-tariff barriers that are as significant, if not more significant. 

On the Brussels office, I'll be going out to the Brussels office next week and will hopefully have an opportunity to talk to them about how they can help to inform us in relation to gaining intelligence from the Brussels side of things in relation to trade.

On the advisory group, I think it would be very difficult to imagine that we would be able to give information to an external advisory group that is not possible to give to Assembly Members, so I would certainly think that that would be a strange situation. But there is a UK Government advisory group that's been set up and there is a Welsh person on that group. They don't represent Wales, but we are making sure that we have a relationship with that representative. 

In terms of the Trade Bill, we don't yet know if the new trade Bill will be the same as the last Trade Bill. If there's continuity of trade agreements that were there in the past, then, obviously, it won't be such a problem, but if what they're suggesting is that they want to introduce new trade agreements, then we will want devolved bodies to absolutely have a say and a role in that process, which is slightly different.

On TTIP—listen, this was a really big deal in terms of the negotiations between the EU and the United States. It all crashed and didn't work, but I've got no doubt at all that the United States Government will be pushing to include the investor-state dispute settlement role in a trade negotiation. What that means is that if an investor country feels it's being discriminated against, it can seek compensation, but not through the courts. It's through some very opaque system that is not transparent, and that's something I certainly don't think that we would want to sign up to.

Photo of Mandy Jones Mandy Jones UKIP 5:59, 7 January 2020

Thank you for your statement today, Minister. As someone who has actively campaigned for an independent trade policy for the UK as an independent nation, I believe in a global United Kingdom trading freely with the whole world. I think that this can provide the foundations for a bright and prosperous future for Wales. I agree with you when you say the general election made clear that Brexit will now happen. It confirmed the decision made in 2016 and the UK Government now has a clear mandate to get Brexit done, to coin a Conservative campaign slogan.

As a member of the External Affairs and Additional Legislation Committee, I look forward to your response to our report sometime during this month and discussing it with you in more detail after next month.

In the statement, you call for a clear role for the Welsh Government in future trade deals. Minister, can you detail what that role may look like, and point to where, in this current devolution settlement, the powers sit to enable this to happen? On devolved matters, yes, but any others? I do find that in this statement, in recent statements to the press by members of Welsh and UK Labour, your Government and your party are really critical of a trade deal with the world's largest economy, and our close ally, the United States of America. I do find this rather strange as, in 2017, the then First Minister, the Member for Bridgend, said on a visit to Washington DC, and I quote:

'In my discussions with American businesses, politicians and diplomats, I will be raising the importance of further developing free trade between our countries and the removal of barriers to make trade between us easier and quicker.'

So, Minister, when did the Welsh Government change its position on trade with the United States, and, more to the point, what message does that send to the 250 American-owned companies here in Wales? And let's remember that the US accounts for almost 40 per cent of inward investment projects.

Minister, leaving the EU also gives us the opportunity to intensify protection for animal welfare, like cracking down on the transport of live animals to the continent. I've spoken about this before. Whilst a ban on live animal exports is not currently possible due to EU free trade rules, a ban could be introduced once the UK leaves the EU at the end of the month. Will the Welsh Government look at ending the transport of live animals? That's another question I've asked before as well.

I agree that, after we leave the EU, taking back a seat on the WTO is very important, as we look to strike trade deals with a number of countries around the world. Minister, has your Government considered the possibility of actually hosting a new trade summit for Commonwealth countries? This could promote trade and also celebrate cultures, history and future relationships. We could be the first. Wales has a proud track record of hosting great events, from the Rugby World Cup, the Ryder Cup to the NATO summit. We have the talent and we have the capacity. We can all agree that we are leaving the EU, so now can we all agree to do all we can to make this work? Thank you.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 6:02, 7 January 2020

First of all, of course we're interested in promoting trade. It's just that we're doing this at a really difficult time. The World Trade Organisation is currently in a situation where the United States have stopped appointing judges, so that anything that comes out of the World Trade Organisation now can only go so far in terms of the legal process, and people could potentially ignore what they are suggesting and challenge that, and that could take years to go through the system. So, at a time when our fallback position is to rely on the World Trade Organisation, this is not the time to be doing that.

In relation to trade, of course what we've emphasised is devolution is where we absolutely must have a say, where we have those powers. And you must remember that we went into the EU at a time when devolution didn't exist; we're coming out to a very different world, where those powers reside here. And it's great that the UK Government have recognised that and they are anxious to engage and involve us, because they know that, ultimately, we're the people who have to make that happen on the ground. So it's not in their interests either to sign up to trade deals that would be difficult to implement on the ground. So, we're giving them the benefit of the doubt, we want to engage; at the moment, they're not quite engaging in the way we'd like them to.

In terms of the United States, I'm absolutely clear that it's one of the biggest investors in Wales. As you say, you've emphasised the number of companies that have housed themselves here in Wales. It's one of our biggest export markets. All of that is being done without a trade agreement, don't forget. So, the point is, you don't always need a trade agreement to be in place in order to trade. And I do think, at this point in time, when we're kind of over a barrel in terms of the deadline we've set ourselves for the EU of a year, we've got a Trump presidency that is saying, 'Put America first', that's quite a difficult place to put yourself in—you're not holding many cards in that kind of situation. But let's hope for the best, and let's see what the UK Government can come up with.

I think Britain has a really proud record in terms of animal welfare. Certainly, when it came to the transport of live animals, the UK Government was really influential in terms of cutting down significantly the number of hours that animals were allowed to be transported within the EU.

In terms of the Commonwealth, this is something that many people say: 'Why don't we go back to the old days of the Commonwealth?' If you look at the amount of trade that we do with Australia, with India, with Canada, all of that put together doesn't amount to the amount of trade that we do with Ireland. So, you know, I think that we have just got to make sure that we get some perspective on where our nearest trade partners are, and trade gravity really plays an important role here.

Photo of Alun Davies Alun Davies Labour 6:05, 7 January 2020

I'd like to simply raise two issues with you this afternoon, Minister, and I'm grateful to you for the statement. First of all, to emphasise again the importance of inter-governmental arrangements and the machinery of Government. We do have some experience of working in international negotiations with the United Kingdom Government through our membership of the European Union, and we do have in place a number of templates that we are able to use, I believe, in order to ensure that we do have the sort of relationship that you have discussed and described this afternoon and at other times.

I believe that the memorandum of understanding that we agreed in 2012 for engagement with the European Union is a good starting point for a new structure that will ensure that both the Welsh and Scottish Governments, particularly—but Northern Ireland arrangements as well—are able to work alongside the United Kingdom Government to ensure that we have a position that is supported by the whole of the United Kingdom and not simply the Government of the United Kingdom. I hope that that is important.

It's also important—and I speak to the Chair as well, the Deputy Presiding Officer—to ensure that our democracy is able to keep ensuring that we have the methods and mechanisms of accountability to ensure that, whatever new structures are in place, there is proper democratic accountability for those structures. That speaks to this place—not to the Government, but to this place—and also to the arrangements that we have in place with the UK Parliament and the Scottish Parliament to ensure that there is proper accountability and proper democracy overseeing any new inter-governmental machinery that is put in place.

The second point that I wish to make is that of values. We talk, in terms of trade, sometimes as if that is happening within a vacuum. For me, trade and our approach and our policy has to be rooted in our values. When we reach agreements with third countries, then this isn't simply a matter of ensuring that we have the tariffs in place and the mechanisms at the border and behind the border in order to ensure that we have frictionless trade, but that we have a relationship of values as well, so that the debates that we have in this place—whether they are about sustainability or equality or welfare rights or the rights of working people—are also rooted into these agreements as well.

I was very pleased to hear you saying, Minister, that you are strengthening the capacity of the Welsh Government to address these matters. I believe that that is absolutely essential and important. But, it is also important that we don't just have the technical expertise and the structural ability to provide pressure and influence on these matters, but that we also do so with a strong sense of being able to deliver our core values.    

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 6:09, 7 January 2020

Thank you. I think that you are absolutely right. I think that some of the templates exist already and you've been a part of those mechanisms in the past, where the Governments of the United Kingdom come together, you come to a common, shared position and then you go and speak at the EU together. So, this is not rocket science. It's all there. It needs to be picked up. It's just that there has obviously been a paralysis for a very long time in Westminster, but let's see now if that blockage will cease to exist.

Democratic accountability, I think, is absolutely crucial, but there's no point in just putting that at the end of the process. Article 50 should teach us something. They can go and negotiate whatever they want. If they bring it back to Parliament and Parliament rejects it, then what's the point? It's a pretty blunt instrument. You've got to engage people earlier on in the process, and I think that that is really important. 

You're absolutely right in terms of values. That is important and that's why we have set that out in the paper that we set out, the trade policy issues for Wales, where we've underlined some of the key values that we see as being important in Wales: sustainable development, economic and social protection. We don't want to see a watering down of labour standards. Well-being of future generations: we want to make sure that there is transparency and fairness. All of those things we've set out already, so I think that that is absolutely fundamental to the way forward.

Photo of Mr Neil Hamilton Mr Neil Hamilton UKIP 6:10, 7 January 2020

The Minister said in the statement that we must, in the UK, build a shared vision of the kind of economy and future trading relationships that we want with the EU. Of course, I applaud the sentiment, but it doesn't really bear much scrutiny because all the language of the statement and the attitudes that the Minister herself, in particular, has adopted in recent years, point in the opposite direction. She doesn't share the vision of the UK Government on Brexit at all.

In fact, the statement itself and what she said in reply to other questions earlier on point to the fact that she is still fighting the same debates that we had in the referendum campaign and the general election in 2017 and, indeed, even the general election just a few weeks ago, talking about the need for regulatory alignment. Well, if you go into negotiations on the basis that, 'Yes, we are going to ask for everything that you've got already and we're not going to give anything away', then you're inevitably not going to come back from negotiations with a successful result. No United Kingdom Government is going to pay the slightest attention to the Welsh Government if it carries on harping on about these themes.

The tune is exactly the same. All that's happened as a result of the general election is that they have changed the key. Otherwise, the tune is exactly the same as the one that they have been piping away at unsuccessfully for the last three and a half years. You would think that the Labour Party should at last have learned something from the devastating wipeout of the general election, particularly in Wales, where the Conservatives now hold an unprecedented number of seats at Westminster as a proportion of the total.

If the Welsh Government really wants to be taken seriously by the UK Government, they have to get behind the message that the UK Government itself is putting forward and has since Theresa May, of unlamented memory, departed the scene. Boris Johnson is a different kind of leader from Theresa May. He's going to take a positive, optimistic view of negotiations in the world, and he's going to play, I trust, much more hardball in our negotiations with Monsieur Barnier. Theresa May completely failed to deliver on the referendum result because she adopted the same frame of mind that, unfortunately, I think I still see in the person of the Minister who is making this statement today. I don't think that she particularly wants to be known as the Theresa May of Welsh politics, but she has a danger, I think, at least in this respect, of earning that sobriquet.

The Welsh Government adopted a policy for the last three and a half years of deliberate confrontation with the UK Government. That absolutely, totally failed. Now, it's time to not just open a new page, but actually a new book, if the Welsh Government is to have any influence at all over the UK Government, which I would like to see, of course. The interests of Wales are slightly different from the interests of other parts of the United Kingdom, the same as Scotland's are and the same as the north of England's interests are slightly different from everybody else's as well. The Welsh economy exhibits certain characteristics, in particular the importance of exports to the EU in Wales, which I acknowledge is much greater than anywhere else in the United Kingdom. But, when she says in her statement that we must not lose sight of the interests of consumers as well as stakeholders, I applaud her for that because everybody's a consumer in Wales. Everybody eats food, for example.

Agriculture is an important element in any future trade negotiation with the EU, but we can't just see this through the perspective of producer interest groups. We should see also the importance of negotiating in the interests of consumers. In Wales, particularly, as we're the poorest part of the United Kingdom in income terms and GVA, the interests of a larger proportion of the Welsh population is in getting cheap food and, indeed, cheap everything out of these negotiations: opening up markets, reducing prices, creating a more competitive economy within which to operate.

So, the frame of mind that we need, I think, for the Welsh Government, as for the UK, is firmness of purpose. No, we're not going to the negotiations as supplicants of the EU. They have much more to lose in total than we have—a £66 billion a year deficit with the EU in goods in 2018. We have a massive surplus in services with the world at large. That's not part of the negotiations with the EU. The EU is interested in doing the best possible deal that it can get for itself and we should be interested in doing the best possible deal that we can get for Britain. But if the Welsh Government sees itself as a kind of Trojan horse for EU interests in these negotiations, it will get nowhere. It will in fact further discredit itself and marginalise itself and be ignored by the UK Government, and that has further repercussions as well in terms of the relationships between the devolved Governments and the UK Government on other issues. So, I do implore the Minister, even at this late stage, to change the tone and change the mood music because that's the way to make progress.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 6:15, 7 January 2020

I don't think I bear any relationship to Theresa May at all, other than the fact that, as my finance Minister has just pointed out, we're both vicars' daughters, as is she. But we are very, very different vicars' daughters. [Laughter.] Can I just say that—? Listen, I don't know which part of 'We accept that Brexit will happen' you didn't understand, but that's what we've made clear, I think, today.

The fact is that there is a vision for the United Kingdom, but there are also four parts to the United Kingdom and I think it would probably benefit the UK Government to remember that. What is important is that the vision for the United Kingdom isn't focused just on London and the south-east. For the first time now the UK Government, in the shape of the Tory Boris Johnson, is going to have to consider the needs of places where there is still a manufacturing base. So, I am hopeful that the UK Government will move more towards the Welsh position than they have in the past.

It is absolutely wrong to say that there is a deliberate effort at confrontation. I've a very good relationship with Conor Burns, the trade Minister. I'm just saying, 'Can you speed it up a bit because we're running out of time here?' In terms of balancing consumers, producers, of course we've got to get that balance right, but which consumers and which producers? What I'm not willing to see is cheap food be sacrificed for the 58,000 agricultural workers in Wales. That's a balance that we have got to discuss. I don't want to see that sacrificed. As a vicar's daughter I'm allowed to use these kinds of images on the altar of the city of London, so I think it's really important that we get all of this and we try and work together for the good of the country. It's in all our interests. If this is going to happen, let's make it the best deal possible for the people not just of Wales, but for the United Kingdom.

Photo of Ann Jones Ann Jones Labour 6:17, 7 January 2020

Finally, and briefly, Jenny Rathbone.

Photo of Jenny Rathbone Jenny Rathbone Labour

We should hope for the best, but we have to prepare for the worst. I'm afraid I can't share the sunny uplands of opportunity post Brexit. I'm unable to see them at the moment.

There's nothing but uncertainty on what the UK Government's position is going to be in these trading negotiations. As you point out in your statement, there will be winners and there will be losers. So, the thing I wanted to raise in particular were the issues of food safety and food security, briefly mentioned by Neil Hamilton. But the spectre of chlorinated chicken and hormone-adulterated beef still loom large in any negotiations that we might have with the United States, if we have already conceded watering down food standards in our negotiations with the European Union.

What will happen to our climate emergency carbon reduction commitments if we are content to outsource our food production to unregulated factory farm conditions, which are completely unsustainable in the long term? What does that mean for our food security as well as for the well-being of future generations, which obviously includes our global responsibilities? I don't know if you are able to shed any light on the UK Government's position on these matters, but they're not the sorts of things that are being discussed in the sloganising that we've heard from the UK Government to date. So, anything you can say on this would be useful.

Photo of Baroness Mair Eluned Morgan Baroness Mair Eluned Morgan Labour 6:19, 7 January 2020

Just very briefly, I'm aware that we're running out of time. So, yes, uncertainty is a big issue. In terms of food safety and security, there is the question of with whom are we going to align. Because if we do align with the United States, and we allow hormone-treated beef in, then the barriers with the rest of the continent will go up because they won't want that to enter their market. So, there are trade-offs, and the order and the sequencing of this is going to matter massively. That's part of the difficulty of having multiple negotiations going on at the same time. We've made it clear: EU comes first.

In terms of what we know from the UK Government, part of the problem is that we don't know what the negotiating mandate is. The Americans have published theirs. It's all transparent. We don't know what the UK mandate is. That's something we've really got to start getting on with, because we're running out of time, as I was saying.