Transatlantic Trade and Investment Partnership

– in the Scottish Parliament on 29 April 2015.

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Photo of Elaine Smith Elaine Smith Labour

The next item of business is a debate on motion S4M-13007, in the name of Christina McKelvie, on the implications for Scotland of the transatlantic trade and investment partnership. I call Christina McKelvie to speak to and move the motion on behalf of the European and External Relations Committee.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

I am delighted to speak to the motion on behalf of the committee. It is not often that we get a European and External Relations Committee debate in the chamber, but there was one last week and there is one this week. I am sure that all members will be keen to take part in it.

I sometimes think that TTIP has become the most emotive four-letter word of the past year. What is TTIP and why has it provoked such a strong public reaction? By the measure of all our inboxes over the past few days, that reaction is very strong indeed. TTIP is a trade agreement that is currently being negotiated by the European Commission, on behalf of the European Union, and the United States. There have been about 50 such trade deals between the EU and international partners—the most recently concluded being the comprehensive trade and economic agreement with Canada. They never make these things easy to say.

The negotiations on TTIP started in July 2013, but it is unclear when or even whether the negotiations will be concluded. The new European Commission has made the development of a

“Reasonable and Balanced Free Trade Agreement with the US” one of its 10 priorities, and the ninth round of negotiations recently concluded in the US. However, the timetable for the agreement remains fluid. Even if there is an agreement, it will be many years before its impact is felt.

In the past, EU trade deals have all been agreed without attracting much attention, so why is TTIP proving to be so controversial? All over the EU, civil society organisations have campaigned and rallied in opposition to TTIP, and a genuine European anti-TTIP movement has emerged. Organisations in Scotland have been part of that movement and have articulated strong concerns about the potential agreement.

The committee concluded that much of the concern about TTIP has arisen as a result of the lack of transparency that has historically surrounded trade negotiations and that initially surrounded the TTIP negotiations. Concerns mounted over both what would be in the agreement and its potential implications. That was highlighted in evidence to the committee. For example, the University and College Union told us that

“The secrecy, including the secret negotiating positions, and the lack of public engagement and involvement in the whole process have set alarm bells ringing.”—[Official Report, European and External Relations Committee, 27 November 2014; c 25.]

The STUC stated that

“the secrecy surrounding the negotiations is unacceptable and likely to undermine trust in both trade policy and the EU institutions responsible for directing it”.

When Cecilia Malmström took over as the new European Commissioner for Trade in late 2014, she responded to repeated calls for more transparency and disclosure by promising greater levels of transparency in the negotiations. That included making more negotiating texts public, making the negotiating texts available to all members of the European Parliament, and publishing information on meetings held by European commissioners and senior European Commission officials.

In addition, the Commission responded to calls from the European ombudsman, Emily O’Reilly, for greater public access to consolidated negotiating texts, by publishing a number of “textual proposals”, which set out EU proposals for the legal text in TTIP.

I first became aware of the strength of concerns relating to TTIP in Scotland last year, when I attended an NFU Scotland hustings in Larkhall, in my constituency, during the European elections. From that point on, TTIP began to come up regularly in contacts with constituents, in my meetings with trade unions, and—most pervasively—on Twitter.

Last August, I proposed to the committee that we conduct an inquiry on TTIP. In our discussion we were particularly concerned by the number of unanswered questions about TTIP. What would be the impact on public services? Would our regulatory standards be lowered? Would our shops be flooded with meat containing hormones? Would there be an effect on jobs? How beneficial would TTIP be for the Scottish economy?

In addition, the lack of transparency surrounding the whole TTIP process made it difficult to get clear or reassuring answers. For that reason, one of our key motivations was to explore the implications of TTIP specifically for Scotland and the people of Scotland in order to shed light on what it would mean for us. We were keen that the evidence should be balanced, so we decided to hear from organisations that were concerned by TTIP and from organisations that were in favour of it.

Before talking in more detail about the evidence that we heard, I would like to say a heartfelt thank you to all those who engaged with the committee in its inquiry into TTIP. Those thanks are extended to the committee clerks who managed to bring to the table amazing people who gave us wonderful information and allowed us to negotiate our way through the issue properly. That was no small feat.

Photo of Patrick Harvie Patrick Harvie Green

I, too, would like to thank the committee and those who contributed to its work in producing the report.

The committee is asking Parliament not simply to note its report—as normally happens in committee debates—but to welcome its recommendations, too. Reading those recommendations, I am unclear whether the committee is recommending that the TTIP deal should progress. That does not seem to have been addressed. Will the committee convener tell us whether the report is intended to imply a recommendation that TTIP proceed?

Photo of Christina McKelvie Christina McKelvie Scottish National Party

I thank Patrick Harvie for that intervention. I also thank him for calling me out in the chamber last year, asking the committee to do some work on the issue. I hope that we have responded to that request.

Patrick Harvie is right in his assumptions and conclusions on the recommendations. As I will say towards the end of my speech, the committee is not finished with the issue yet. There are many aspects of TTIP that we want to keep an eye on before we reach final conclusions. We wanted to raise the profile and understanding of TTIP and to bring it before Parliament in order to allow us to debate the issues.

The committee did not come to a clear understanding on whether TTIP should go ahead. We believe that there are aspects of TTIP—for example, the investor-state dispute settlement mechanism—that we should keep a close eye on. There are also concerns about how public services would be affected by TTIP. Our interest in the issue is not finished; I can reassure Patrick Harvie on that.

I would like to thank not only those who engaged formally with the committee through oral and written evidence, but all those who engaged via Twitter and by email with their views on the proposed TTIP agreement. The committee benefited from all the engagement—formal and informal.

Towards the end of the committee’s inquiry, I hosted an event on TTIP that was organised by the Hansard Society and the European Parliament’s office in Edinburgh. I would like to thank those two organisations for taking the initiative to organise the event for the public. It was sold out—the room was packed—and we had many very interesting exchanges. It was held in the evening and was completely full, the places having been taken up quickly by people with an interest in TTIP.

For two hours, a number of speakers and participants discussed the intricacies of TTIP; it would be fair to say that we could have gone on all night. The stamina of some of the participants was remarkable, as they had travelled to attend the committee’s evidence session with Lord Livingston first thing in the morning and then stayed in Edinburgh all day to attend the evening event.

My thanks also go to Scotland’s MEPs and members of the Committee of the Regions who provided written submissions on TTIP and who have been actively engaged on the issue in Brussels. The interaction between the committee and Scotland’s representatives in the EU is an extremely positive example of how sharing and collaboration can improve understanding and scrutiny of EU policies.

Finally, I thank the Scottish Government for its timely response to the committee’s report. The committee is looking forward to receiving a response from the United Kingdom Government after an event that will take place next week is over: I hope that we will, once a new UK Government has been formed, get a timeous and detailed response. We are also looking forward to receiving a response from the European Commission.

In our oral evidence, we heard first from third sector organisations and trade unions in late November last year. In December, we heard from businesses and business organisations. The evidence that emerged from the round-table meetings was often very concerning. It is notable that we heard more about specific concerns than about specific benefits. We heard that the reduction in tariffs, the improvement in regulatory coherence and better co-operation would boost the economy, but we had many questions. What sectors would benefit the most? What are the realistic projections of economic growth? Would only big companies benefit or would small and medium-sized enterprises, which make up the majority of firms in Scotland, benefit, too? What would be the impact on jobs? What trade-offs would be made, given that a trade deal would presumably open up the Scottish market to the US?

I was quite struck by the lack of information on some of those areas and the lack of awareness among some Scottish businesses and their representative bodies about the implications of TTIP. The trade deal is, of course, still being negotiated, but it seems to me to be fundamental that we do not enter into an agreement unless tangible benefits can be identified. We wanted to know what those benefits for Scotland would be. I therefore welcome the commitments that the Deputy First Minister and Cabinet Secretary for Finance, Constitution and Economy made in his response to the committee to work with the enterprise agencies and other existing structures to help to raise awareness and understanding of TTIP.

I will turn to the concerns. Primary among concerns was the potential impact on the national health service and other public services—I am sure that many members will focus their comments on that. I also note the importance that the Deputy First Minister attached to it in his response to the committee.

Another key area of concern was the prospect of the eventual agreement having a detrimental effect on regulatory and environmental standards. In particular, concerns were raised about whether restrictions would be maintained on genetically modified foods, and about the entry into the EU market of meat that is derived from animals that have been fed growth hormones, and of chicken that has been washed in chlorine.

Among the other issues to emerge were the very complex issue of the use of the investor-state dispute settlement mechanism and the potential for large multinationals to sue Governments. The issue of protected food names came up, too—in particular, in relation to cherished products such as our Stornoway black pudding.

We listened closely to those concerns and raised them in the subsequent evidence sessions that we held with the European Commission’s deputy chief negotiator, the UK Government’s Minister of State for Trade and Investment, and the Cabinet Secretary for Finance, Constitution and Economy. Following those meetings we still had some concerns, which informed the conclusions and recommendations in our report. I will highlight some of those concerns now and will leave Hanzala Malik, in his capacity as the committee’s deputy convener, to speak about some of the others when he closes the debate.

In relation to the lack of transparency surrounding the negotiations and the lack of clarity on certain issues, notably the potential effect on public services, we called on the European Commission to make available as much information as possible during the course of the negotiations. As neither the Scottish Parliament nor the Scottish Government has a formal role in the negotiations or in the eventual ratification of the agreement, we concluded that it is crucial that there are strong mechanisms and structures in place to ensure that the Scottish Government is consulted on and kept informed of developments that are of relevance to devolved policy areas. Our inquiry demonstrated to us that the Scottish Government is primarily dependent on intergovernmental contact with the UK Government.

Photo of John Finnie John Finnie Independent

Christina McKelvie talked about being kept informed on areas that are within devolved competence, but I take it that the committee will still wish to hear about the potential erosion of workers’ terms and conditions, which are a reserved matter.

The Deputy Presiding Officer:

I can give you extra time to make up for interventions, Ms McKelvie.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

My response to John Finnie is that the committee will absolutely want to hear about that. As he knows, intergovernmental discussions can focus on devolved areas, but they will also certainly look at reserved matters that have an impact on jobs, workers and the economy in Scotland. The Deputy First Minister has assured us that such matters will be raised and dealt with.

Photo of Neil Findlay Neil Findlay Labour

Did any of those who gave evidence express the concern that secret, behind-closed-doors negotiations away from the prying eyes of voters and taxpayers are likely to drive people more to extremist parties such as the UK Independence Party?

Photo of Christina McKelvie Christina McKelvie Scottish National Party

I have to say that that is a bit of a leap. The matter was not raised by the UKIP MEP who gave evidence to the committee, who thinks that all this is a great idea, but does not want to be a part of the Europe that wants the trade. It showed UKIP’s almost two-faced attitude to this matter.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

I am sorry. I need to finish, and I have some more to say.

The economic benefits of TTIP are presented as the key driving factor behind the negotiations, which might answer some of the questions that have been asked. However, it is fair to say that the economic modelling that has been conducted at both EU and UK levels, to estimate the contribution that a trade agreement between the EU and the US could make to gross domestic product growth, lacks rigour.

Moreover, the committee felt that there was insufficient information on the likely impact of the agreement on the key economic sectors in Scotland. The committee welcomed the commitment of the Scottish Government and the enterprise agencies to conduct further research and asked the Scottish Government to carry out a more detailed economic impact assessment covering both GDP growth and the impact on key sectors in Scotland, if and when the agreement is finally signed.

I do not know how much more time I have left, Presiding Officer.

The Deputy Presiding Officer:

I can give you another minute.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

That is excellent. Thank you very much.

One of the two big issues to emerge from the inquiry was the investor-state dispute settlement mechanism. I hope that I am not putting my colleague Rod Campbell on the spot when I say that I think that he will pick up on the issue in his speech.

The committee was told that the ISDS model that is used in the comprehensive economic and trade agreement with Canada might provide a model for the TTIP agreement, but for us the fundamental question is why there is a need for an ISDS mechanism to protect against discriminatory action against EU companies in the US, or against US companies in the EU, when member states have their own established and well-developed legal systems. The committee therefore concluded that genuine and well-founded concerns had been expressed to us about the risks of national court systems being bypassed by major corporations, and that disputes should be resolved in accordance with the legal systems and the processes of the country involved.

I ask the Parliament to welcome the committee’s work and I look forward to hearing speeches from many interested colleagues across the chamber.

I move,

That the Parliament notes and welcomes the conclusions and recommendations in the European and External Relations Committee’s 2nd Report, 2015 (Session 4), The Implications of the Transatlantic Trade and Investment Partnership for Scotland (SP Paper 693).

The Deputy Presiding Officer:

I advise Parliament that I have a little bit of time in hand for interventions. I also point out that I felt it to be important to give the committee convener extra time for interventions.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

First of all, I thank the convener of the European and External Relations Committee for her remarks. I welcome the committee’s inquiry on this important issue and applaud it for the way in which it has gone about its task and the breadth and depth of its scrutiny. As the committee and MSPs will be aware—and as we will hear in the debate—many organisations from trade unions to environmental organisations and many members of the public have deep concerns about TTIP, and the Scottish Government believes that those concerns should be raised, represented and addressed, not just dismissed out of hand.

The committee heard evidence from a range of interests including trade unions, non-governmental organisations and businesses; the European Commission, live by video from New York; the UK Government’s Minister for Trade and Investment, Lord Livingston; and the Deputy First Minister. It has covered a wide range of complex issues that cut across the roles and responsibilities of the EU institutions, Westminster and, of course, the Scottish Government and Scottish Parliament.

On that point, we must reluctantly recognise that the Scottish Government and the Scottish Parliament currently have no formal role in the TTIP negotiations or in the ratification of any agreement, if and when that happens. Nonetheless, we have a critical role in representing the people and businesses of Scotland and ensuring that the UK Government takes full account of Scottish priorities and concerns. The committee has already played an important role in that, and the Scottish Government has formally responded to its conclusions and recommendations. This debate gives Parliament the opportunity to play its role.

I will use my speech to focus on some of the key themes in the committee’s report: the economics of TTIP; regulation; investor-state dispute settlement; and the potential threat to the NHS and other public services.

Scotland already has a strong economic relationship with the US. As the committee recognised, TTIP could—I emphasise the word “could”—help to build on that by improving market access for Scottish goods and services and reducing non-tariff barriers. Indeed, our indicative modelling of the impacts of TTIP, which the committee requested, suggested that it is likely to have a positive, albeit modest, impact on headline indicators such as GDP and total international exports. However, we must recognise that it is not a one-way street. Although the aggregate economic impact may be positive, some subsectors and companies could be adversely affected. There will be winners and losers.

We must also acknowledge, as the committee has done, that the assumptions that have been used by the Commission, which we have necessarily used to inform our own analysis, are just assumptions. Other studies, such as that by Tufts University, suggest a more negative economic outcome.

If truth be told, no one can be absolutely certain of the scale and scope of the economic benefits and challenges that TTIP might bring or how they will play out across the businesses and communities of Scotland.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

Obviously, there could be economic advantage, and there could be economic disadvantage, as Tufts University has highlighted, but what about reputation? I have great concern about genetically modified organisms. If genetic modification is part of signing up to TTIP, Scotland cannot afford that reputationally. Will the cabinet secretary respond to that, please?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I want to come on to the point about regulation in particular. Kevin Stewart raises an important point about reputation. In respect of Scotland’s beef and lamb and our agriculture more generally, our status and reputation are paramount in considering the benefits or otherwise to Scotland.

The Scottish Government is absolutely clear that any agreement must under no circumstances be at the expense of lower regulatory standards. I think that that is the point that Kevin Stewart has raised. We are also absolutely clear about the important right of the Government and the Parliament to regulate in the public interest and certainly not at the expense of our NHS and other vital public services.

As many members will be aware, TTIP is not just about reducing tariffs between the EU and the US still further; it is also about reducing so-called non-tariff barriers though regulatory coherence. As the committee has pointed out, that could help to reduce the red tape and associated costs that Scottish businesses—especially small businesses—face when they export to the US. The principle of regulatory coherence or harmonisation sounds sensible and is, after all, central to the European single market, but we must not forget that the primary purpose of regulation is to protect consumers, workers and the environment.

The committee was right to point out that, although the UK Government and the Commission have said that TTIP will not affect standards, we cannot be assured of that until we see the final text. The UK Government and the Commission must be held to their word on that and must resist the lobbying of those who would put profit before protection and shareholders before citizens. That is why, for example, the Cabinet Secretary for Rural Affairs, Food and Environment, Richard Lochhead, raised that issue with the UK Secretary of State for Environment, Food and Rural Affairs before last month’s EU agriculture and fisheries council.

The Scottish Government is clear that regulatory coherence must not lower standards and must not put regulatory decision making in the hands of technocrats or big business. Those decisions are for democratically elected institutions and no one else.

Turning to the committee’s consideration of investment protection and the investor-state dispute settlement, over the past 15 years this Parliament has taken bold and ambitious legislative action on issues such as smoking in public places and climate change and has taken many other decisions that might not grab the headlines but are all about acting in the interests of the people of Scotland. Every so often, we disagree with each other on what those interests are and how they should be achieved, but I do not think that we disagree that it is for this democratically elected institution to make those decisions—nothing should undermine that.

Photo of Dennis Robertson Dennis Robertson Scottish National Party

The cabinet secretary has mentioned twice now that it is elected members who should be making decisions. Is she not therefore concerned that the UK Government sent unelected lords to the EU to make representations on fisheries on Scotland’s behalf?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I absolutely agree with that point and I will come on to it in my concluding remarks.

The committee heard concerns from organisations such as Friends of the Earth Scotland that proposals for ISDS might undermine our decision making or that Governments and legislatures might hold back from legislation for fear of being sued—the so-called “regulatory chill”. Those concerns are not unique to Scotland and are reflected across Europe in the 150,000 responses to the Commission’s consultation on ISDS and in the fact that six of the 14 committees of the European Parliament involved in drafting the Parliament’s resolution on TTIP have recently passed draft opinions rejecting the ISDS clause that is currently part of the agreement.

The European Commission has stated that nothing would limit the right of Governments to regulate. However, in our view the committee’s scepticism about the need for ISDS is justified. As it happens, Westminster’s Business, Innovation and Skills Committee agrees with that view. When the BIS committee published its TTIP report on 25 March, its chair said:

“We are not convinced the case has been made for the inclusion of ISDS clauses”.

Neither is the Scottish Government; we are not convinced that ISDS is required for an agreement between advanced economies such as those of the EU and the US, which have established legal systems and a strong rule of law. In our view, disputes between investors and the state should be settled in domestic courts and nothing should undermine the freedom of the Scottish Government and the Scottish Parliament to act and regulate in the public interest.

The committee also heard concerns from trade unions and others that TTIP would lead to the privatisation of our NHS and other vital public services. I am sure that many members have heard those concerns from their constituents. In our view, those concerns are too strong, too loud and too important to be dismissed with a glib assurance from Lord Livingston that everything will be fine. That is why the Scottish Government has been pressing the UK Government and the European Commission for an explicit exemption for the NHS on the face of the agreement.

Photo of Patrick Harvie Patrick Harvie Green

Does the minister acknowledged that it goes a little bit beyond the NHS and beyond the threat of further privatisations and that the deal threatens the right of national Governments to bring back into the public sector things that have already been privatised? There are many of us across the chamber who would like to see some of our infrastructure brought back under public ownership, but that could be made more difficult by the TTIP deal.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

The issue of public services more generally is something that the committee addressed and something that we have raised with the UK Government.

Particularly on the NHS, we have raised the issue with the Secretary of State for Health, and the First Minister has raised it with the Prime Minister. However, a commitment to an exemption has not been forthcoming, even just for the NHS, although Lord Livingston has attempted to give reassurances.

We therefore fully endorse the committee’s support for the double lock that would explicitly exempt the NHS from the agreement and, in the context of TTIP, provide absolute clarity that any decisions on the NHS south of the border, such as opening it up to more private providers, will in no way interfere with the ability of the Scottish Government and the Scottish Parliament to determine how and by whom the NHS and other publicly funded public services are provided.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I am coming to the end of my remarks.

As the First Minister has said, and as she reiterated to the STUC last week,

“No ifs, no buts — there must be an explicit protection for the NHS on the face of the agreement.”

Let me conclude with two broader points that the committee’s inquiry has brought to sharp relief. First, whether it is TTIP or some other aspect of EU policy, the existing structures and mechanisms for formal consultation and engagement between the UK Government and the Scottish Government are not working, and action is needed to reform and improve the current intergovernmental machinery and the concordat on the co-ordination of European policy issues. Furthermore, if MPs and the unelected House of Lords are to have access to TTIP documentation, MSPs, too, should have such access.

Secondly, as the committee highlights, TTIP exemplifies the disconnect—

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I am concluding my remarks.

TTIP exemplifies the disconnect between people and organisations in Scotland, and EU decision-making processes. As the Scottish Government set out in “Scotland's Agenda for EU Reform” and reiterated in our recently refreshed action plan for EU engagement, it is our view that the EU and its institutions must do more to reconnect with citizens. The committee’s inquiry has made an important contribution to that in respect of TTIP, and I trust that our debate today will add to that contribution.

Photo of Jenny Marra Jenny Marra Labour

We welcome this European and External Relations Committee debate on the issue of the transatlantic trade and investment partnership and its implications for Scotland. I know that I am not the only member who has been inundated with emails from constituents in the past couple of days voicing their sincere concerns about the trade deal. Those emails show the strength of feeling among the public about the potential threat that the deal could pose and it is right that we debate the issue here in the Scottish Parliament.

The committee report cites evidence from the Cabinet Secretary for Finance, Constitution and Economy, John Swinney, that TTIP will bring considerable economic benefits to Scotland. He echoed earlier comments by the then First Minister, Alex Salmond, and his successor, Nicola Sturgeon, who both described TTIP as especially good news.

Although there are some who would take issue with that, we can agree that the real bone of contention is the hidden impact that the deal could have on public services, particularly on our NHS, and the threat of opening up those services to the market. Those points were very well put by the convener and by the cabinet secretary just some moments ago.

There is a strong and unchallengeable consensus in the Parliament and across Scotland to have a health service in public hands that is free at the point of need and funded through general taxation. Labour will resist any attempts to defy the will of the Scottish people for a publicly run NHS that holds to the ideals that were instilled by Clement Attlee’s Labour Government when our health service was created more than six decades ago.

We all welcome the assurances from the European Commission and from the UK Government that there is no risk to public services from TTIP. In particular, I highlight the evidence that my Labour colleague David Martin MEP, an acknowledged expert on European trade issues, gave to the committee. He wrote:

“TTIP is expected to follow the model of previously negotiated EU trade agreements which are already in force. All EU trade agreements to date have included broad carve-out for public services, which protects EU Member States’ rights to keep services such as health, education and water in the public sector. In addition, Member State national governments are able to take out additional reservations on particular sectors (including, for example, public healthcare services) ... Governments are, and must remain, free to renationalise any service they reclassify as a public service ... This is currently the requirement irrespective of TTIP.”

Photo of Jenny Marra Jenny Marra Labour

No, I am a bit short of time, so I will continue, if that is okay.

We can take some confidence from knowing that we have strong members of the European Parliament such as David Martin and Catherine Stihler arguing the progressive case in these trade deals in the European Parliament. If elected next week, a Labour Government would not put our NHS at risk under TTIP. Ed Miliband, as Prime Minister, would demand a clear and robust exemption for our NHS and other public services from any deal, as the cabinet secretary demanded.

However, we are right to be vigilant. Part of the problem, as identified by the committee convener, has been the secret nature of how this deal has been negotiated. Although that may be normal for trade talks, people need clarity and assurances when something as important as our NHS and other public services are being discussed.

I take the opportunity to acknowledge the efforts of the TTIP campaigns, particularly the trade union movement, to shine a light on the potential threat and to wring out those assurances. Dave Watson of Unison Scotland called for an unequivocal exclusion of public services from the TTIP negotiations.

I hope that, through the report and the campaign work by the trade unions and others, those who are negotiating TTIP recognise the level of mistrust among the public about the issue and do their utmost to remove any grey areas that could give rise to fears of exploitation by vested interests.

We all have a duty in this Parliament to hold those involved in TTIP to their assurances that our NHS will not be impacted by the trade deal. I look forward to doing so on a cross-party basis.

The committee report also highlights how distant people and organisations can feel from decisions taken in Brussels. That reminds us that fears and misunderstandings about our place in Europe are not confined to UKIP and the Tory back benches. Fears about Europe and its role in our lives exist in all our communities and, even though the politics may seem opaque and distant at times, it is important that those of us here who believe in co-operation and solidarity with our neighbours across the European Union and who believe that the union serves us well—the economic and social union of Europe—continue to fight for it.

The Deputy Presiding Officer:

I call Jamie McGrigor. You have seven minutes, and there is a little bit of time at this point if members wish to take interventions.

Photo of Jamie McGrigor Jamie McGrigor Conservative

I thank all the stakeholders who attended our evidence sessions, all of which were most interesting and enlightening. I also extend my thanks to the committee clerks for all their work, especially the compiling of the report.

Perhaps it is worth putting on record the objective of the agreement, which was the negotiating mandate for TTIP states. The objective of the agreement is to increase trade and investment between the EU and the US by realising the untapped potential of a truly transatlantic marketplace, generating new economic opportunities for the creation of jobs and growth through increased market access and greater regulatory compatibility, and setting the path for global standards. I do not think that there is anything too sinister about that, but I agree with what Jenny Marra said about looking at the areas about which people are worried, exposing them and seeing whether there really is anything sinister behind them.

Today’s debate on the transatlantic trade and investment partnership is very important for a number of reasons. The US is an important market for Scotland in terms of both exports and foreign investments in Scotland. TTIP holds the potential to further reduce the red tape that is hampering business. It will lower tariffs and will allow for the creation of high international standards by reinforcing the EU-US trading power.

This trade agreement is also a natural development of the UK-US special relationship, although the EU, in a slightly different role this time, is acting as a negotiator.

Free trade is one of the fundamental drivers of economic growth and prosperity in the world, and it was only when trade was increasingly liberalised that the United Kingdom, strengthened by the union of 1707, could step out of the dark ages into an era of greater prosperity. TTIP is a logical step towards a world based on free trade. A conclusion of TTIP negotiations might, we hope, also put additional pressure on the on-going Doha round of the World Trade Organization toward ever freer world trade.

Photo of Neil Findlay Neil Findlay Labour

Of course he would say that, being a Tory. Does he not realise that this is not about free trade? It is about the developed world protecting its trade at the expense of everyone else.

Photo of Jamie McGrigor Jamie McGrigor Conservative

I would just have to say that I disagree with that.

The Scottish North America business council made a valuable contribution during the committee’s inquiry by pointing out that, although the trade barriers that we have with the EU and the US are portrayed as small—an average of 3 per cent—the total cost for British companies is more than $1 billion. Imagine if we were to remove those tariff barriers, further unshackling business. The economic benefits for Scotland and Britain would be significant indeed. Estimates show that up to £10 billion could be added to the British economy every single year—although not even that would be enough to cover the Scottish National Party Government’s black hole. It is a significant amount of money.

TTIP will not change the fact that it is up to the UK Governments alone to decide how our public services, including the NHS, are run. There is nothing in the agreement that has the power to change our laws or lower consumer, labour or environmental standards. The setting of standards is and will remain the right of the EU and national Governments. The deal will allow greater sharing of best practice and the creation of better international standards if they are used by the EU and the US. It will enable us to use more pressure on our trade partners across the world in terms of any new deals. If they want to gain access to the EU and US markets, they will have to adhere to the standards that TTIP can help to create. Those can be higher standards.

The EU has also made it clear, in responding to public concern, that TTIP will not lead to a lowering of standards unless the European Parliament and national Governments—I think that there are 28 of them—decide that that should happen. I am aware that people fear that investors could sue Governments for losses, and win if the Governments take a decision in the wider public interest, whether on health, the environment or consumer standards. The inclusion of investor-state dispute settlement mechanisms is common in international trade. They are there to protect companies from Government decisions that are discriminatory and unfair. That protection is already part of UK law, and the UK has not suffered from any of those agreements. The mechanism gives investors higher confidence, thus increasing investments. However, it is important that, if ISDS mechanisms are included in the final draft, they are as tight as possible, minimising the risk of any abuse.

In response to those who argue that the deal will benefit only big business, that is far from the case. TTIP will grant British and Scottish firms unprecedented access to the American market, with its 300 million consumers. Thanks to lower regulatory differences, lower trade tariffs, smoother customs processes and access to US public procurement, markets will directly benefit small businesses that previously might have been unable to bear the costs of all that.

It would be Luddite to reject this deal, which will deliver £10 billion a year to the British economy and unshackle business from red tape, trade tariffs and other obstacles to free trade and the prosperity that that can deliver. However, it will benefit not only the UK—[Interruption.]

The Deputy Presiding Officer:

Order. I suspend the meeting for a few moments.

15:22 Meeting suspended.

15:23 On resuming—

I hereby reconvene the meeting, and I ask guests in the gallery not to clap proceedings.

Photo of Jamie McGrigor Jamie McGrigor Conservative

As I was saying, the deal will benefit not only the UK but the whole of the EU. It is due to the stagnant EU economy and the weakness of the euro that, for example, farmers are getting about 20 per cent less for their farming subsidies than they got last year. An injection of up to £100 billion would kick-start the economy and indirectly benefit a great many people because it might do something to start some growth in Europe, which is exactly what is desperately needed.

There are a lot of misconceptions around TTIP that wrongfully undermine a genuinely good trade deal, and it will be a shame if scaremongering scuppers something that will be genuinely good for working people. It is likely to be another year before we can see the final draft of the agreement, but the US, EU and UK negotiators and Governments have all issued assurances that standards will not be affected and that the NHS will remain in public hands for as long as the Scottish and UK Governments decide that that is the preferred course of action. It is important that we do not succumb to the myths and anti-American sentiments that sometimes are evident in this country.

The Deputy Presiding Officer:

The member has closed.

We come to the open debate. Speeches will be around six minutes with a little bit of time in hand at this stage for interventions.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

One of the things that I love about this country is people’s right to protest. [Applause.] Another thing that I love about it is our democratic right to discuss matters such as the one that we are discussing today.

I am really pleased that the European and External Relations Committee took the inquiry on, especially when, as it notes at the beginning of its report, the European Commission has identified a

“‘Reasonable and Balanced Free Trade Agreement with the U.S.’ as one of its ten priorities” for its term of office. The inquiry is prescient and very important.

I am also pleased that the committee intends

“to actively consider the potential impacts of TTIP on Scotland as the negotiations unfold.”

Especially as we are not the nation state, it is very important that the committee carefully considers everything that comes up in the negotiations. The committee recognised that

“neither the Scottish Parliament nor the Scottish Government has a formal role either in the negotiations or eventual ratification of the agreement.”

Photo of Alex Rowley Alex Rowley Labour

The minister said that we would need to see the final text to see the benefits or otherwise of the agreement. However, given that no one has been able to come to the committee and show any evidence of any economic benefits for Scotland, should the Parliament and the Scottish Government now start to campaign throughout the United Kingdom to put a stop to TTIP?

Photo of Linda Fabiani Linda Fabiani Scottish National Party

No. The Government and the Parliament have a right to know what is going on, and it is up to whatever Westminster Government exists to ensure that the devolved legislators in the UK know what is going on. In our submission to the Smith commission, we proposed that we should have that right, and we absolutely should. I ask everybody in the chamber to make sure that that happens.

The debate takes me back to the first parliamentary session. At that point, the general agreement on trade in services was being discussed—I think that it was the Doha round, following on from the initial GATS agreement. I kept asking parliamentary questions of the then Government—or Executive, as it called itself—about how the agreement affected us and what we were doing about it. It basically said, “It’s a reserved matter. Nothing to worry about. The Westminster Government is looking after us.” I do not believe that any Westminster Government looks after Scotland properly, so I make a plea for us to be properly involved, including in the discussions, because TTIP is very important and its potential impact in Scotland is huge.

Members have talked about transparency. Neil Findlay talked about the transparency of our Government. Let us have transparency at the European, US and UK levels so that we know what is going on.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Talking about transparency, I tried to intervene on Jenny Marra because she rightly said that the health service has—

Photo of Linda Fabiani Linda Fabiani Scottish National Party

In a minute. Let me finish, will you? Sit down. [Interruption.] Sit down!

The Deputy Presiding Officer:

Order, Ms Fabiani. If you do not wish to take the intervention, please just say no.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

Well, perhaps if he stopped rabbiting in my ear from a sedentary position, Presiding Officer, it would be easier not to get annoyed.

The Deputy Presiding Officer:

If the level is getting too high in the chamber, I will shout for order. Please continue with your speech.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

My apologies, Presiding Officer.

I totally agreed with all Ms Marra’s comments about the health service. There is a real concern that the privatisation of health services could come into TTIP, and we must guard against that very strongly. I liked everything that she said, but I ask whoever closes the debate for Labour to confirm whether a future Labour Government at Westminster will include in the negotiations an explicit exemption for public services.

Photo of Jenny Marra Jenny Marra Labour

To clarify, I gave that assurance in my opening speech.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

I did not find that as explicit as I would have liked, so I appreciate the member’s intervention.

I completely understand why many people are exercised by and terribly concerned about TTIP. It is crucial that we work together as team Scotland right across the parties. Even the Conservative Party can have a role in saying that we demand transparency and openness.

I was heartened by a lot of what our European representatives—apart from the UKIP person—said during the European and External Relations Committee’s evidence sessions. We should be working with our European representatives on the trade implications.

I am worried about the right of corporations to sue Governments. We have to fight against that very strongly. ISDS is not needed because individual nations have their own regulations.

Photo of Jamie McGrigor Jamie McGrigor Conservative

I also agree with people’s right to protest.

Does the member understand that the deal could be good for small businesses as well as for big corporations?

Photo of Linda Fabiani Linda Fabiani Scottish National Party

The number of small and medium-sized businesses that we have and their trade with America is rather good, but I want further discussion of the benefits that the UK Government—through Lord Livingston, I think—is saying will accrue. The evidence from the Scottish Trades Union Congress, the World Development Movement and our own cabinet secretary for finance, for example, is that they are not convinced that we would see the benefits that are being discussed. If ISDS goes forward, its disadvantages will far outweigh its advantages. There are many cases involving World Trade Organization agreements in which big organisations, such as GM organisations, have tried to take on national Governments.

I remember when one company—I cannot remember which, but I think that it was Monsanto; I will take it back if I am wrong—tried to insist that basmati rice is not from the Indian subcontinent and that it should have the right to grow GM rice that it could call basmati. When we start to talk about ISDS, that is when I get really worried.

If we believe in the right to protest and in democracy, we should never put ourselves in a position in which a big, unelected corporation that is run entirely for money can hold a state Government and its people to ransom. Transparency is absolutely required.

Photo of Anne McTaggart Anne McTaggart Labour

I am grateful for the opportunity to speak in the debate as a member of the European and External Relations Committee. Like many speakers, many of my constituents have contacted me with their concerns about the negotiations for a new transatlantic trade and investment partnership between the EU and the USA.

The European Commission runs negotiations on behalf of the European Union and its member states, but it is important for individual member states, including the United Kingdom and Scotland, to consider the effects that such an agreement would have on them. The UK Government says that the establishment TTIP is a positive thing and that the agreement could pave the way for numerous economic benefits, citing results from a study by the Centre for Economic Policy Research, which states that the UK’s annual income could grow by between £4 billion to £10 billion if trade barriers are eliminated.

Some sceptics, including members of the public, have expressed concern that entering into such a trade agreement would undermine the regulation of goods, soften environmental and labour protections, and force privatisation. Such measures are not attractive to the people of the United Kingdom and Scotland for obvious reasons.

Proponents of the plan argue that the monetary benefits, including more jobs and cheaper prices for goods, outweigh any other factors.

Another major concern, especially for Scotland, is that TTIP would impede the delivery of public services, such as the national health service, but that concern was eased by the assurance that member states would be able to choose not to outsource to private providers.

Transparency in relation to the draft agreement has been a problem throughout the negotiations. The European Commission has been taking steps to address those concerns, as other members have emphasised.

Although aligning technical procedures on both sides of the Atlantic could lower the cost of exporting to the US and therefore create new opportunities for businesses across the UK to grow and hire, the British public has, by and large, made it clear that our public services, our social model and our democratic principles are not up for trade.

I share the concerns of the committee, my colleagues in the chamber and my constituents over TTIP. I have signed a pledge to protect the NHS under TTIP. We should support a deal only if it fully protects our public services, particularly the NHS.

I know that concerns have also been expressed about the proposed inclusion of investor-state dispute settlement provisions in TTIP. In its current form, the proposed ISDS mechanism is neither necessary nor desirable. There must be greater transparency on the matter. I am therefore delighted that the Scottish Labour Party has called on David Cameron to ensure that appropriate safeguards are put in place to protect public services. Furthermore, there is no case for ISDS in the negotiations.

Although the negotiations fall on the reserved powers list and the Scottish Government does not have any formal role in the agreement, it is still essential that the policies set under TTIP are as beneficial to Scotland as they are to the rest of the United Kingdom and the European Union.

The European and External Relations Committee has dedicated multiple sessions to discussions on TTIP, the most recent being in February. Committee members have taken evidence from multiple stakeholders, and have discussed at length the details of the agreement as they became available in order to decide whether the deal would be in the Scottish people’s best interests.

It is crucial that the committee continues its work and watches TTIP’s progress closely. However, it is important to remember that, outside the EU, the United States is Scotland’s biggest export market and its biggest inward investor. TTIP could strengthen that relationship.

I hope that the Scottish Government will work alongside the UK Government to call for far greater transparency, ensure that voters’ interests are protected fully and that voters receive the maximum benefits, and address any and all concerns that TTIP may bring.

Photo of Roderick Campbell Roderick Campbell Scottish National Party

I have enjoyed being part of the committee’s work on TTIP. The evidence sessions have been informative, although they often raised more questions than answers.

I, too, take the opportunity to acknowledge the interests of many of my constituents, including the well-informed St Andrews TTIP group. It has been good to see such a strong public response on a matter of such importance. Despite assurances from the UK Government minister Lord Livingston that there is no threat to the UK’s national health service from TTIP, scepticism remains high.

Towards the end of the committee’s deliberations, the comprehensive economic and trade agreement between the EU and Canada, or CETA, which has been agreed but not yet ratified, emerged as an issue.

After a formal evidence session on TTIP had ended, the committee heard evidence in connection with our work on another matter from Christos Sirros, the agent-general of the Government of Quebec, who is based in London. He told the committee that individual provinces of Canada, such as Quebec, participated in the CETA negotiations, albeit that they spoke through the Canadian negotiator. In marked contrast to Scotland’s experience of TTIP, the provinces were directly involved in the process from A to Z. As we know, in contrast, Scotland is not at the top table, which makes failings in the transparency of the negotiations on TTIP an even more important issue.

Speaking of transparency, Glenn Campbell of BBC Scotland revealed the wording of the reservation on health in the leaked draft of the EU’s offer to the US on TTIP. That wording mirrors the wording in CETA, which Lord Livingston described to us as

“the state of the art”.—[Official Report, European and External Relations Committee, 19 February 2015; c 28.]

However, CETA has not been subject to scrutiny in any meaningful way by either the House of Commons or the House of Lords and, in February, I could trace only one European plenary debate on the issue. Therefore, a substantial amount of work still needs to be done.

Of course, the current position is that the European Parliament and member states can now only reject or accept the agreement. In my view, that certainly does not support the argument that, if CETA is ratified, somehow or other, that means that TTIP must follow. Indeed, only today, a report in the magazine Politico suggests that the concerns over ISDS in TTIP might have influenced a delay in the ratification of CETA. The article refers to concerns on the part of “many members of Parliament”—it means the European Parliament, I believe—who are

“now posing one critical question: ‘Why should we ratify the Canadian trade pact, which includes an ‘outdated’ version of ISDS that no one wants to accept in the American deal?’”

Whatever the outcome of the election next week, I can but hope that the new Westminster Parliament will look seriously not only at TTIP but at CETA, and that the Scottish Parliament will continue to monitor the issue, as the committee recommends.

In relation to the economic benefits of TTIP to Scotland, as we know, the US is Scotland’s greatest export market outside the EU, and its most significant source of inward investment. The Deputy First Minister’s evidence to the committee was of a potential expansion in gross domestic product through TTIP, although the Government’s response to the committee’s report refers to only a “modest” expansion. However, I am mindful of the evidence of Stephen Boyd of the Scottish Trades Union Congress that, even if the model that the European Commission uses, which is that of the Centre for Economic Policy Research, is correct—many regard it as hopelessly optimistic—the EU economy will grow by an annual increment of only 0.03 per cent by 2027. While TTIP is under negotiation, it is impossible to accurately model the economic impact. The STUC also raised issues on the distributional impact of TTIP, which I would like the Scottish Government to keep under review, in accordance with our pledge to tackle inequality.

The European Commission may well have been surprised by the hostility that was demonstrated in the public consultation to the incorporation of an ISDS mechanism. I await with interest the Commission’s decision on whether it is appropriate to have such a mechanism in the treaty at all.

We heard evidence from a representative of the Commission, a Mr Houben, on the four matters that the European Commission is considering in relation to ISDS. The first is protecting Governments’ right to regulate and the second is the establishment of the functionality of arbitral tribunals. The third and most important matter is the relationship between domestic judicial systems and ISDS. It is my informal understanding that, despite assurances that were given to the committee that there would be engagement with domestic legal systems such as that in Scotland, that engagement has not taken place. For the record, the fourth matter that the Commission was supposed to consider was an appellate mechanism, which does not exist in CETA. Therefore, the Commission has an awful lot of work to do in relation to ISDS. I share the concerns that have been expressed about its inclusion at all—I am definitely on the side of those who have concerns about its incorporation.

Commissioner Malmström attempted to reassure us by saying:

“The European Commission would never even consider an agreement which would lower our standards or limit our governments’ right to regulate. Neither would EU Member States, nor the European Parliament.”

However, we should remember that the national health service in Scotland is an institution that is at the heart of how we do business and that, as negotiations stand, protection is not there. The Deputy First Minister was right to tell us:

“We want there to be no restriction and no danger of restriction on our ability to act properly in exercising our devolved competence in that area.”—[Official Report, European and External Relations Committee, 5 February 2015; c 30.]

To achieve that, the oft-referred-to double lock is an absolute necessity to provide protection for the member state at the UK level and for the devolved competence of the Scottish Government, acting with the Scottish Parliament’s consent. When I questioned Lord Livingston during his evidence session with the committee on why the UK Government does not want to listen to the deep concerns about the NHS and go for a belt-and-braces approach, he concluded that his approach is “pretty belt and braces”, referring to the wording in the draft that was leaked to BBC Scotland.

However, Scotland’s NHS is too important to be put at risk. At the moment, the draft does not contain explicit protection; indeed, one might well wonder why the negotiators are afraid of spelling it out and putting one in.

In addition, as the STUC says in its evidence,

“TTIP risks institutionalising the regulatory arbitrage that corporations have become so skilled at exploiting. In some key areas it will necessarily dilute key social, consumer and environmental protections”

Those regulatory concerns remain.

In conclusion, TTIP exemplifies the disconnect between people in Scotland and UK and EU decision making. On behalf of the people of Scotland, let us, as a Parliament, continue to voice those concerns.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

As other members have pointed out, two of the main concerns that are most frequently raised about TTIP involve the inclusion of the health service and the controversial investor-state dispute settlement. I will talk about both those things, but first there is the overwhelming concern of many inquiry witnesses that the discussions on TTIP have not been open and transparent. It seems almost absurd that we are in the chamber discussing this enormous trade deal before we have any reliable insight into the detail of the discussions that are taking place. The European ombudsman has recommended that the process should be made more transparent, to assure accountability, and I believe that the Commission should respond to that proposal.

One of the main things that all members have expressed concern about is the NHS, and I re-emphasise how crucial it is that the NHS is in no way compromised by TTIP. The NHS, as I am sure we all agree, is not an economic asset but a public benefit, crucial to the health of our country, and a vital thread in our shared social fabric. I know that reassurances have been given, and it may seem that the issue is less problematic in Scotland than it is in England, since we do not have a market health system here, but I strongly support Unison’s call for explicit protection for the NHS—a call that was echoed by the Royal College of Nursing, which has asked for a cast-iron guarantee. I am very pleased that my party at UK level is supporting that position, as Jenny Marra confirmed this afternoon.

In his evidence to the committee, the Cabinet Secretary for Finance, Constitution and Economy made the case in favour of the economic impact that TTIP may have in Scotland, which is clearly very important. He said:

“It could provide market access for Scottish goods and services and reduce non-tariff barriers. If that delivers growth and jobs for Scotland, it should be welcomed.”—[Official Report, European and External Relations Committee, 5 February 2015; c 28.]

Early modelling using the Government’s internal economic model suggests that the impact could mean that Scotland’s gross domestic product expands by 0.2 to 0.3 per cent. The Government estimates that the range of export growth will be between 1.8 and 3.6 per cent, but the range of import growth is expected to be between 0.8 and 1.5 per cent. As many have pointed out, however, that is a best-case scenario. The Government worked out other scenarios that had far less beneficial consequences. Many people believe that the modelling is based on a half picture.

Stephen Boyd of the STUC, in his contribution to the committee’s scrutiny, highlighted two key reasons for the pervasive scepticism about TTIP’s economic benefits. Traditional trade barriers between the EU and the US are already very low and any gains from TTIP are likely to be minimal at best, so the costs may easily outweigh the benefits. Furthermore, TTIP may lead to a general lowering of standards across the whole economy by introducing new harmonised regulatory standards, which could not be implemented through domestic democratic process and would thereby threaten to dilute vital worker, consumer and environmental protections. Stephen Boyd said:

“It is crucial that we understand that this is not about removing what we would traditionally describe as barriers to trade but about imposing a common regulatory structure that will be policed by an international mechanism that will not have been passed by the normal democratic process in each country.”—[Official Report, European and External Relations Committee, 27 November 2014; c 10.]

We would be relinquishing some of our control to a country thousands of miles away for the sake of freer trade, based on an agreement that we are yet to comprehend fully.

In a similar trade deal between Canada and the United States, a regulatory co-operation council has worked to produce a joint forward plan that sets the stage for fundamental changes in the way that regulatory departments and agencies in both countries work together, making it easier for businesses to operate in those countries.

Photo of Patrick Harvie Patrick Harvie Green

The member has been clear that his concerns are primarily around the protection of the NHS and the threat of regulatory standards being lowered. Is it Mr Chisholm’s understanding that Labour’s position is that, if those issues are not addressed, Labour will oppose TTIP?

Photo of John Scott John Scott Conservative

I will give you a little time for that intervention, Mr Chisholm.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

I am sorry—I am not in a position to state what Labour’s position on that is, although I know that Labour has certainly expressed concerns about the health service and about ISDS, which I will now move on to, given that the inclusion of ISDS would potentially add insult to injury and would be completely unacceptable.

The Cabinet Secretary for Finance, Constitution and Economy spoke in evidence about the possibility of restrictions on the export of crude oil to Europe being lifted. He gave that as one example. The question that I would ask is what would happen if we were then to legislate in a manner that affected crude oil, for example by taking action on fossil fuel use or making a transition to clean energy. ISDS would mean that we would be open to punitive legal action, which could cost us dearly.

The Government and the citizen would lose out on two fronts: we would develop a system of governance that takes into account the profit of big international investors as a deciding factor in whether policy to effect a greater good should be passed, and we would potentially lose a chunk of our taxes in claims. That would affect our ability to implement progressive energy policies, to implement the living wage and to push for safer and more equal workplaces. That would put business in the US in the driving seat of our parliamentary process.

We can draw from the experience of other nations that are signed up to the system. There are examples from Australia and Canada, where Governments have been sued for pursuing their policies that have been put in place for the common good—respectively, legislation on tobacco in Australia and a moratorium on unconventional shale gas extraction in Quebec. ISDS has also led to the Swedish energy giant Vattenfall suing the German Government for losses as a result of Germany phasing out its nuclear programme.

ISDS must go and the NHS must be explicitly protected. We should also look with some scepticism at the stated economic benefits.

The Deputy Presiding Officer:

I call Adam Ingram, to be followed by Alex Rowley. There is a little time for interventions.

Photo of Bob Doris Bob Doris Scottish National Party

Does the member share my concern—

The Deputy Presiding Officer:

Please put your card in and face the microphone, Mr Doris.

Photo of Bob Doris Bob Doris Scottish National Party

I am sorry, Presiding Officer. Shall we try that again?

The Deputy Presiding Officer:

If you speak through the microphone, that will help.

Photo of Bob Doris Bob Doris Scottish National Party

This will be third time lucky, Presiding Officer.

Does Mr Ingram agree that much of the predicted economic boost that has been modelled in relation to TTIP may result in more jobs being low paid and insecure and conditions being poorer? That would not be an economic boost—it would be a negative impact from TTIP.

Photo of Adam Ingram Adam Ingram Scottish National Party

I thank the member for his intervention—he got there in the end. That could well be the outcome. As I said, we need to see the draft agreement before we can make a proper assessment of it.

The question remains about what will be in and what will be out of the scope of TTIP. For example, one of our potential winners could have been financial services. In times past, Scottish financial institutions were key players in opening up the west of the United States. However, it appears that US regulators are insisting that financial services be excluded from TTIP. In short, economic opportunities are difficult to assess at this distance from a published draft agreement.

In any case, potential economic gains must not come at the expense of publicly funded services such as the NHS, result in lower standards or remove the right of Governments to regulate. As other members have highlighted, the protection of public services in Scotland was a key concern of those who gave evidence to the committee. Although reassurances have been sought and given by the UK Government and the European Commission, the patent lack of public trust in the negotiating process underlines the need for the double lock that has been suggested by the Deputy First Minister for the final agreement. That double lock would explicitly exempt the NHS from the agreement and provide absolute clarity that, although the UK would be the member state, any decisions that it made in the context of TTIP, such as the decision to open up the NHS in England to more private providers, would in no way interfere with the devolved responsibilities of the Scottish Government and the Scottish Parliament.

The committee remains concerned about definitions of public services and whether the reservations that will be contained in the final agreement will effectively protect the full range of public services in the TTIP agreement. That must be a red-line issue for any incoming UK Government. The same should be said for ISDS. The committee is clear that any disputes between business corporations and states should be resolved in accordance with the legal systems and processes of the countries concerned. We live in times when rich and powerful global corporations can hold democratically elected Governments to ransom, and we should guard against the kind of oligarchic control over economies that we see in, for example, Russia. We need to stand up for the democratic right of Governments and legislators to regulate in the public interest, including, when necessary, the right to cut overbearing power down to size.

Photo of Jamie McGrigor Jamie McGrigor Conservative

Mr Rowley mentioned possible economic benefits. In a written statement, his own MEPs—Labour MEPs, David Martin and Catherine Stihler—said:

“TTIP also has great potential for SMEs to access the transatlantic market, too often still only fully accessible to multinational corporations”.

Photo of George Adam George Adam Scottish National Party

I commend the European and External Relations Committee for all its work in producing its report, and Christina McKelvie for dealing with the issue with her usual passion and vigour.

TTIP has been one of the biggest issues in my mailbox and it has dominated discussions at local meetings in recent times. Along with many of my constituents, I have been concerned about the lack of information to date on the proposed transatlantic trade and investment partnership, particularly with regard to public services. We all have stories of how the NHS has helped us or family members and friends. A universal, free-at-the-point-of-need national health service is a cornerstone of our society, which we must protect with every fibre of our beings. To that end, I intend to speak up on behalf of my constituents and to voice their concerns. I join the First Minister in saying:

“I will fight tooth and nail against any moves to privatise the NHS in Scotland by the back door, and if the TTIP agreement ever put that threat, it would be opposed strongly by this Government.”

As has been said, the United States is an important market for Scotland. About a third of all the whisky that is distilled is bottled in Paisley, so anything that had an effect on the whisky industry would have a knock-on effect on jobs in my area. Any move that would help with exports of our national drink or, indeed, with any of our other exports, would be welcomed. As has been mentioned, exports to the USA have a value of £3.9 billion and account for 14 per cent of Scotland’s total international exports.

However, we cannot pursue such benefits at the expense of lowering regulatory standards on production and quality. Products that carry logos such as those for Scottish farmed salmon or Scotch beef, to name but two, are trusted in this country and around the world as quality products that are prepared to the highest standards. Any move to lower regulatory standards or to remove regulation could tarnish our national brands and reduce international exports.

That ties in with my next point on the investor-state dispute settlement mechanism, which I believe is one of the most alarming elements of TTIP. Foreign companies operating in Scotland would be given the power to enter disputes with our Government and even to sue it outwith the framework of our national court system. I do not want us to find ourselves in a situation in which a US tobacco firm could take action against the Scottish Government if it chose to legislate to introduce plain packaging on cigarette packets. That decision would be made by nationally elected representatives in the public interest. However, if TTIP includes the ISDS provision, a US tobacco firm would have the ability to go over the head of the Scottish Government and to seek to reverse its decision. France and Germany have already voiced major concerns about ISDS, and the UK Government—regardless of which party leads it next week—will need to take a strong line on the issue.

Photo of John Finnie John Finnie Independent

Does George Adam agree that the ISDS mechanism suggests that, although the civil law of this land is good enough for him and me, we need some super-duper law for the corporations?

Photo of George Adam George Adam Scottish National Party

We have to ensure that such companies register and can be brought to task under the laws of these lands. That is one of the reasons why ISDS is so important: it would, in effect, take away the laws of this land and allow companies to dictate to democratically elected Governments.

It is imperative that, in negotiating the deal, the UK Government represents the interests of all the UK’s component parts, and not just the interests of one part or of big business. Much has been said in recent months about the respect agenda, so it is more important than ever for the next UK Government to take on board the Scottish people’s concerns. Unfortunately, the current UK Government has a poor track record of speaking up for Scotland at European level. Our fisheries minister, Richard Lochhead, has had his hands tied behind his back, and Scotland has received less than half the UK’s European fisheries fund allocation despite the fact that 87 per cent of UK landings come ashore here. I hope that a strong group of Scottish MPs will be elected to speak up for Scotland in the next UK Parliament.

A major concern of my constituents has been the lack of transparency that other members have already highlighted. I appreciate that, as with any negotiation, aspects will be discussed behind closed doors before a final proposal is drafted, but it appears that this negotiation process has caused real anxiety among regular people the length and breadth of our country. In March, a discussion on TTIP was removed from the agenda of an agriculture and fisheries council meeting and took place in private. As far as perceived transparency is concerned, that sort of thing does not fill me with confidence.

Richard Lochhead has urged the agriculture and fisheries council and the Commission to be more transparent in forthcoming discussions about TTIP and has asked for it to remain a topic on future agendas. I welcome the publication of key documents and position papers on the negotiations by Commissioner Malmström since she took up the post of trade commissioner, and I encourage the Commission to consider the European ombudsman’s recommendations on how to improve transparency and engage stakeholders.

However, the main issue—and the focus of much of the correspondence that I have received on TTIP—is the NHS. I was pleased to read in the Scottish National Party manifesto that we will

“seek an explicit exemption for the NHS and Scottish Water, as part of a general public sector exemption, from the terms of the proposed Trans-Atlantic Trade and Investment Partnership.”

Given the increased privatisation of the NHS in England, we need to be more cautious than ever of any attempt to allow private interests into the NHS in Scotland. We must make it absolutely clear that the NHS in Scotland will remain in public hands and will remain free at the point of need. The shameful use of the NHS and its weaponisation by other political parties during the election campaign have been a sight to behold, but that makes it even more crucial for the Scottish Government to retain full control of our NHS. The best way to allay the public’s concern about the threat to our NHS is to ensure that a double lock is enshrined in the TTIP agreement—

The Deputy Presiding Officer:

I am sorry. The member is in his final minute.

Photo of George Adam George Adam Scottish National Party

That is unfortunate.

As I was saying, the best way to allay the public’s concern is to enshrine in the TTIP agreement a double lock that explicitly exempts the NHS from TTIP’s scope and respects the Scottish Parliament’s devolved responsibilities. There is that word again: “respect”.

The Deputy Presiding Officer:

You must draw to a close.

Photo of George Adam George Adam Scottish National Party

Both the European Parliament and the UK Parliament must respect the democratic will of the democratically elected Scottish Parliament and allow it to operate the NHS.

Just this morning, my wife Stacey and I were talking about her multiple sclerosis and how treatment and care in the NHS have improved dramatically since she was diagnosed in her teens. Given that this is MS awareness week, I want more than ever to talk about and defend the NHS. I challenge Labour and Conservative MSPs

The Deputy Presiding Officer:

We look forward to your debate on that subject this evening, Mr Adam. Thank you.

The Deputy Presiding Officer:

No. You must close now, in fairness to others.

Photo of George Adam George Adam Scottish National Party

I ask my colleagues to stand up for our right to keep public services in public hands.

Photo of Jean Urquhart Jean Urquhart Independent

I, too, thank the European and External Relations Committee for producing the report and for bringing this timely debate to the chamber. I also acknowledge the enormous—almost overwhelming—number of emails, the meetings and the campaigning that have gone on around TTIP. The upsurge in campaigning, petitioning and letter writing against the TTIP agreement is not limited to Scotland, of course; there is a Europe-wide movement that is linked to people in the United States who share opposition to TTIP. Ordinary people have ensured that TTIP is being exposed to public scrutiny.

It seems that that was not planned. TTIP negotiations between the European Union and the United States began in July 2013, and those negotiations were meant to be constructed and agreed by corporate lawyers and multinational corporations behind closed doors. The TTIP negotiations are not open to public scrutiny; indeed, that the public have even a limited idea of what TTIP is about and what it will mean for the communities that we represent is down to the determined investigative work of campaigners.

Democracy is at stake with the treaty, in both its formation and its implementation. What is the exact nature of the threat that TTIP poses to democracy? If we are to have Governments that are elected by the people, they must be accountable to the people. TTIP would usurp that basic principle by handing unmitigated power to corporations. That is encapsulated in the investor-state dispute settlement mechanism. The ISDS would allow US businesses to sue the Scottish Government in secret tribunals outside national legal jurisdiction over any public policy that threatened their property titles and the planned profits from their investments. Profits for already dominant transnational corporations would come at any cost in regard to TTIP. The treaty is not just about removing tariffs on trade; it is designed to take away other so-called barriers, such as regulation, standards and certifications. TTIP begins the process of reducing such regulatory safeguards in order to allow corporate interests to dictate to all fields of trade.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

Does Jean Urquhart share my fear that companies such as those that promote genetic modification and which go to court a fair bit in various countries would use ISDS to break down the barriers that we have put up in order to stop GMOs in this country and to protect the quality of our agriculture?

Photo of Jean Urquhart Jean Urquhart Independent

I share Kevin Stewart’s concerns about that, and I suspect that ISDS would enable that to happen.

What I have described puts at terrible risk measures to protect public health, workers’ rights and the environment that have been hard won in years gone by. If TTIP is passed, it will hand unprecedented powers to big business and will become the new model for future trade agreements worldwide.

The campaigning journalist and author George Monbiot put ISDS in stark terms. He said of the ISDS mechanism:

“Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments.

This mechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world.”

That says it all. There is the evidence. Such arrangements are already in place.

Another feature of TTIP, which is less talked about, is the proposed regulatory co-operation council. There is a proposal to create a permanent structure to harmonise standards in the long term, which would give corporations the first look at proposed legislation before it came to the EU or national Parliaments, and would allow a long-term process of standards-setting to be conducted outside the democratic process.

TTIP and austerity fit each other hand in glove: they are part of the same agenda. Austerity lays the groundwork by slashing services, which are then to be privatised.

Photo of Jamie McGrigor Jamie McGrigor Conservative

Is Jean Urquhart aware of any example in which the UK Government has suffered from ISDS in the past?

Photo of Jean Urquhart Jean Urquhart Independent

No, I am not. I have moved on in my speech to austerity. However, I can say that I attended a business breakfast at which a newly appointed managing director said—I am sure that he meant every word of it—that as Governments found it harder and harder to deliver public services, his company would be there to help.

To return to my speech, austerity lays the groundwork by slashing services, which will then be privatised in a harmonised and internationalised manner via TTIP. In that sense, TTIP will be the final nail in the coffin of safeguarding what remains of the post-war consensus on social need and public services. That struggle will be augmented and made all the more difficult if TTIP allows the corporate lobby to privatise all that will come in the wake of austerity. As John Hilary of War on Want says,

“TTIP threatens to be the single greatest transfer of power to transnational capital in a generation, which is why there is now a growing movement of opposition to it.”

I say to the Scottish Government that we should ensure that all our public services are safeguarded from TTIP and that such a position would have popular resonance with people in Scotland and beyond.

Photo of Willie Coffey Willie Coffey Scottish National Party

It is probably best to start with a reminder to people who might be listening to the debate that Scotland and the Scottish Government are not being consulted by the UK Government on the TTIP process or on the negotiations that are taking place. We will not be asked for our opinion when the proposal finally arrives and we will basically have to go along with whatever the UK Government decides it wants to do. That is the position that we are in, which goes a long way to explaining why so many people have expressed concern about TTIP and are looking to our Scottish Government for answers. In the absence of any clarity or transparency from the European Commission or the UK Government, concerns will naturally emerge.

Our committee’s inquiry has at least provided an opportunity for everyone with an interest in TTIP to share their views and concerns. The inquiry provided us with expert advice to guide us through the TTIP issue. Although people will not find in our report all the answers that they might seek, it is a valuable piece of work that was well put together by our committee clerks. I commend the report to anyone who is interested in finding out a little more about TTIP.

The report sends a clear message to the Commission and the UK Government that the cloak of secrecy and the lack of transparency around TTIP are not good enough and have to change. People throughout Europe are interested in their future and in how trade deals such as TTIP may or may not impact on them. It is no longer acceptable for bureaucrats or, for that matter, Governments to adopt the attitude that they know what is best for us. That attitude will have to change in Europe and in the UK Government that takes office next week. Discretion should never be used as a cover for secrecy and a lack of transparency. I sincerely hope that colleagues in all the parties in the Parliament support that view.

We had some notable contributions during the inquiry. An early contribution by Dr Arianna Andreangeli, who lectures in competition law at the University of Edinburgh, was particularly helpful in dealing with the issue of competence and whether the Commission has the power to negotiate away access to the NHS and other public services. In her view, the Commission does not have that power, but the member state—in our case, the UK—can do that if it wants to. She said in her evidence to the committee that

“it is not through TTIP that the power of the member states to decide whether to provide healthcare services through the market or outside is threatened. That is simply because the EU has no power, unless the member states confer that power on it, to modify the choices of the member states, and it cannot mandate them on what form and framework they should construct for provision of healthcare services.”—[Official Report, European and External Relations Committee, 27 November 2014; c 6-7.]

Simply put, a treaty change would be required to confer the power and see such provisions in the trade agreement.

Is that the end of it? I am not so sure. There is still nothing stopping a recommendation coming forward to open up access to things such as public health services. That is a separate matter from having the power to enact something. Further, there is nothing stopping the member states taking whatever view they like and seeking to establish some kind of access to healthcare services.

The member states have always had such a power in their own jurisdictions. In fact, they used it recently when they overturned the Commission’s intention to phase out mobile phone roaming charges by this December. It will now take years to achieve that.

That is where the dangers still lie for Scotland’s NHS. If a future UK Government chose to open up access to the NHS to private health providers from the United States in order to save money, for example, that would have a consequential effect on the budget that is available for the NHS in Scotland.

Lord Livingston basically confirmed that in his evidence when he wrote:

“It will remain up to the UK and devolved governments to decide how to run publicly funded health services, whether private companies should be involved in providing them under contract, and if so to what extent ... Where publicly funded health services are opened to private providers, TTIP may entitle US providers to compete on an equal footing with UK and EU providers.”

There we have it. It is up to the UK Government to agree—or not—to that being done. The potential knock-on effect on Scotland is surely obvious.

My colleague Adam Ingram and others examined the economic case for TTIP. When our committee tried to get the details of the analysis for it, none there came. It seemed more like guesswork than calculations based on any competent analysis. No one produced any figures that could stand up to scrutiny from the committee, and that is not good enough, either.

Lord Livingston claimed that TTIP could benefit the UK by £10 billion a year but could not tell us how he worked out that figure. Our committee has been unable to test such claims by examining any supporting data, because there is no data. The claims were ridiculed by several witnesses, who said that they were too simplistic and overly optimistic. The STUC representative and the World Development Movement representative came to those conclusions.

Our committee’s TTIP inquiry has been worth while, if only to highlight to the public how little involvement Scotland has in the process and in the outcome that we might see. Disappointingly, we had no input from the United States of America, despite asking for that view to be presented at our committee for balance.

At the end of the day, surely a positive trade agreement can emerge from the process and deliver benefits to citizens in Europe and in the United States without detriment to our public services, jobs or health. It is member states that will decide whether to go along with the Commission’s proposals for TTIP, and that is where I suggest the focus of attention will shift after next Thursday’s general election.

The Deputy Presiding Officer:

I invite all members who took part in the debate to please return to the chamber to hear the closing speeches.

Photo of Jamie McGrigor Jamie McGrigor Conservative

This has been a lively and interesting debate and I thank all members who took part for their contributions. TTIP is an important issue for Scotland and for the Scottish economy. The levels of public interest in TTIP are unprecedented—a picture that is seen across the EU.

In my opening remarks, I spoke about building bridges with America, which is worth doing. TTIP is a logical step to partially merge some of the world’s largest markets that will, for a start, bring an additional £10 billion to the British economy every year and £100 billion to the EU economy every year.

The debate that has surrounded TTIP—long before the committee inquiry started—has sometimes been misinformed and based on myths and misconceptions. I will address some of those.

Photo of John Finnie John Finnie Independent

We have heard from a number of members about the challenge that the committee had in getting substantive facts to back up some of the figures. Perhaps Mr McGrigor will tell us the source of the £10 billion figure.

Photo of Jamie McGrigor Jamie McGrigor Conservative

I cannot go into it. It was an accepted figure at the time, and £100 billion for the EU was an accepted figure at the time. I think that the committee accepted that as well, and the committee report is very good.

A misconception and a myth about TTIP and the NHS have successfully been spread in Scotland. It is important that we, as elected politicians, understand and acknowledge that the public are expressing concerns, but it is also important that we provide them with facts and do not spread the myth further.

The Commission, the UK Government and the Government of the United States of America have made it all clear. The NHS cannot and will not be privatised against the public’s will. The only instance in which the NHS would be privatised is if we, as the Scottish Parliament, were to vote in favour of such a move.

The US chief negotiator, Dan Mullaney, said last October:

“I wish ... to stress that our approach to services negotiations excludes any commitment on public services, and the governments remain at any time free to decide that certain services should be provided by the public sector.”

Do not forget that 28 nations in Europe have to sign up to the agreement.

Photo of Jamie McGrigor Jamie McGrigor Conservative

Not now—I have to make progress.

A very similar position has been adopted by the EU’s chief negotiator, who has explicitly stated that the NHS would be under no threat from TTIP. TTIP will deliver a positive impact for the NHS and, by extension, for patients. It will open up the market to US products and services as well as harmonising regulation in order to avoid costly duplication and set a common standard—a very high standard. That can be good for Scottish businesses, including small Scottish businesses.

The notion that the now infamous investor-state dispute settlement mechanism could be invoked by private companies to change public policy has historical precedent. Many ISDS tribunals are, in effect, held in secret, which has helped to create the picture of mistrust. In its current form, the TTIP agreement includes no ISDS clauses but, if any are later included, things will be different from how they were in the past. The EU and the US have pledged themselves to full transparency, which means that there will be no secret tribunals. Similar clauses were included in the free trade agreement in Canada, which seems to be on its way to being something good. It is also important to acknowledge the usefulness of ISDS, which can help to create a positive investment climate and promote growth.

Another of the main concerns that the public have expressed to me and which was expressed throughout the committee’s inquiry is about transparency. I agree that transparency of government is an essential pillar of democracy and, without it, we cannot scrutinise.

However, there is a significant difference that must be pointed out. In the report’s conclusion, the committee acknowledges that

“in any negotiation it is important to retain a degree of discretion about negotiating positions”.

There are 28 countries in the EU, and this is a trade deal. Calling for transparency in trade negotiations would be not only similar to playing poker while showing one’s hand but like someone telling their fellow players what their next move would be. In business negotiations, there has to be some lack of transparency, so that people can get their positions on the table.

The Deputy Presiding Officer:

Jamie McGrigor is in his last minute; I am sorry.

Photo of Jamie McGrigor Jamie McGrigor Conservative

I am sorry—I cannot give way.

Despite what I described, the European Commission has, in a move rarely seen in the EU, listened to concerns expressed by the public and introduced a great deal of transparency. It has allowed for unprecedented and extensive access for elected politicians to scrutinise the negotiations. Much of that access is also available to the public.

A lot of myths about TTIP have been quite successfully spread, but they are nothing more than myths. TTIP has the potential to deliver extensive economic benefits to Scotland and the UK. It will reduce red tape on business, remove unnecessary procedures and grant us access to a market of 300 million people.

There are a lot of misconceptions about TTIP. It is important that we take public concern seriously, but we must also challenge the myths surrounding TTIP that are simply not true. I hope that, in the near future, we will see a completed transatlantic trade and investment partnership agreement, so that we can continue to build on the strong economic recovery that we are seeing in the UK thanks to a Conservative Government.

Photo of Rhoda Grant Rhoda Grant Labour

I refer members to my entry in the register of members’ interests, and specifically to my membership of Unison.

Like others, I thank the committee for its report and for its on-going monitoring of the issue, which is helpful, and pay tribute to the TTIP campaign, which has highlighted a lot of the issues and has been emailing us all—I have more than 300 emails to respond to, so I hope that those people will bear with me.

Full employment has always been, and will remain, an aim of the Scottish Labour Party. That is why we are broadly supportive of agreements that have the potential to bring benefits by boosting trade and economic growth and by securing and creating jobs.

We are also the party that created the NHS, free at the point of use and, we believe, better delivered by the public sector. Therefore, we would never support a trade agreement that threatened our NHS or, indeed, our wider public services.

Although we are supportive of the overall principle of ease of trade, we have major concerns about certain aspects of TTIP. I reiterate what Jenny Marra said in her opening remarks: a Labour Government will seek a clear and robust exception from TTIP for our NHS and public services. We must not do the deal if it is at any cost.

The most serious concern around TTIP relates to the NHS and our public services. The Scottish Government and the UK Government have increased the role of the private sector in our health service, and that could leave us vulnerable if, under TTIP, American companies were able to come in and bid for the contracts to provide those services.

Unison raised concerns with the committee around public services. It called for an unequivocal exclusion of public services from the TTIP negotiations. It said that there should be a positive list that included what was covered rather than excluding certain things, as is normally the case for trade agreements. We have seen how some private companies in America responded to the introduction of a limited public health system, which they have dubbed “Obamacare”. If that is how they react to modest healthcare reforms in America, we need to make it crystal clear that our NHS is beyond the reach of international money-making instincts.

Many members talked about contracting in public services. Alex Rowley made the point that we must have freedom to contract within public services. That is especially true if we want to ensure best value. For example, we contract with Women’s Aid not only for its expert service delivery but because of its ethos. That is true in relation to many parts of the third sector, where organisations focus on a specific group and build an expertise and an ethos that is impossible to replicate.

A number of speakers spoke about Government policies and priorities. One of the Scottish Labour Party’s priorities is taking railways back into public control. Could that also be protected? Could a Government that did that be open to challenge? We must ensure that that is not the case.

A number of people spoke about investor-state dispute settlement, which gets to the nub of the issue. It allows for independent provision to enable companies to challenge Government decisions. Like others, I believe that the law of the land is adequate for us all and that we must not have investor-state dispute settlement.

Photo of Kevin Stewart Kevin Stewart Scottish National Party

Could Rhoda Grant give us a clear line from Labour on ISDS? Earlier, Ms Marra mentioned David Martin and Catherine Stihler. My understanding is that Mr Martin is in favour of ISDS being in the treaty while Ms Stihler is against it. What is the actual Labour Party line?

Photo of Rhoda Grant Rhoda Grant Labour

We believe the law of the land takes priority. If there are systems for negotiation, we will look at those, obviously. However, the truth is that the law must come first. This country is not alone in having concerns about the issue—France and Germany have raised concerns too. A number of speakers have raised the issue and we must take a robust line that the law of the land and, indeed, the freedom of Governments to legislate, must have priority. If that were included in a dispute settlement mechanism, we would, of course, consider that.

I turn to standards. A number of speakers talked about a race to the bottom under TTIP. The benefits of any treaty must filter down to workers and consumers. International agreements have the potential to cement and even increase labour, consumer, environmental and safety standards. There are concerns about TTIP lowering standards, but the principle must be to maintain or increase standards, rather than lower them.

Labour will support only an agreement that will avoid a race to the bottom, promote decent jobs and growth, and safeguard standards. That must be the case with standards on genetic modification, hormones in beef and other matters that members talked about. It must also include medical devices that come from other countries, which must have at least the same standards as we have, if not better ones.

I welcome the debate and commend the committee on its work to bring the issues to the Parliament. I am grateful that it will continue to do that for us.

Although we have sought reassurance on a number of issues, we must follow the precautionary principle. It is our duty as a Parliament to protect our constituents and their public services. That means that TTIP must never interfere with how a Government provides those services to its people.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

I said in my opening speech that TTIP exemplifies the disconnect between the EU decision-making processes and citizens. The committee’s inquiry has helped to close that gap a little bit. Our debate has closed it just a bit further.

Nonetheless, it is clear from members’ speeches and from the emails and letters that we have received as MSPs that many people throughout Scotland are deeply concerned about TTIP. It is right that their concerns be heard and their views be represented. That is what democracy is about, and institutions at all levels have a duty and responsibility to respond.

I welcome the steps that Commissioner Malmström has taken to improve the transparency of the negotiations, but I agree with Malcolm Chisholm and others that that transparency should go further. There is an almighty debate throughout Europe and within the European Parliament about investor-state dispute settlement. Scotland’s voice is not alone in that.

As evidenced by our debate today, whatever one’s view of TTIP, it has put international trade policy on the political and public agenda in a way that has not been seen before. That, in itself, is a good thing. However, as with other EU policy issues, and as the committee rightly identified, the mechanisms and structures for proper engagement with the Scottish Government and Scottish Parliament leave a lot to be desired.

The UK Government should consult and engage with the Scottish Government from the outset of any negotiations and there is significant room to improve the operation of the joint ministerial committee and the concordat on the co-ordination of European policy issues. As Linda Fabiani said in her speech, let us be involved.

It is also unacceptable that, while MPs and unelected members of the House of Lords can have access to key documents, that right does not extend to the democratically elected Scottish Government and MSPs.

Photo of Patrick Harvie Patrick Harvie Green

I acknowledge the distance that the Scottish Government has moved over the past couple of years and I welcome the stronger line that is being taken. However, the Scottish Parliament’s ability to take a view on the matter is somewhat limited: we still have before us only a motion about a committee report. Will the Scottish Government commit to bringing a full, substantive debate on TTIP that will allow motions and amendments to be voted on so that members can express their view on the substance of it?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

That is an important point. The issue is at what point in the determination of any final agreement we would do that. Clearly, in terms of competency, every member state will have to have a debate and to take a view in its individual Parliament. The timing of a contribution on our position would depend on the timing of the final negotiation. However, I very much take Patrick Harvie’s point that we need to come back to the Parliament and debate the matter more fully as it progresses.

Roderick Campbell made an interesting speech. He talked about the evidence from Quebec on CETA and its regulatory co-operation council. On TTIP, it is important to note that we cannot have a regulatory council as a substitute for a democratic institution on standards. He also talked about the importance of the EU engaging on legal issues and how that has not happened. That is also something that needs to be pursued.

Members of all parties ably reflected the concerns of a wide range of stakeholders and their constituents that TTIP threatens many of the things they hold dear, such as the NHS and other public services, our high food and environmental standards and the democratic process itself. We have heard from some members who are concerned about particular aspects of the agreement.

During its inquiry, the committee also heard that TTIP could deliver some important economic benefits for Scotland. Although today’s debate has focused mostly on our concerns, the committee’s inquiry also heard about the importance of Scotland’s economic relationship with the US and the opportunities that it brings. Jamie McGrigor set out how TTIP could help to boost Scottish exports, improve market access, and reduce red tape and the cost of exporting. However, I say to Jamie McGrigor that we already have access to a market of 300 million people. Yes, the US is our biggest export market and our biggest inward investor, but the question is whether improvements could be made and whether the price would be worth paying.

An important point is the potential impact of TTIP on small businesses. We want small businesses to export more but we have to see what impact that would have elsewhere. The distributional impact of TTIP is something that we should consider further.

Adam Ingram gave a thoughtful speech and analysis in which he talked about economic modelling, as did Alex Rowley. Adam Ingram also talked about the balance between responsibility and power. Alex Rowley called for further analysis. Unlike the UK Government, the Scottish Government has provided analysis but, as Malcolm Chisholm said, some of the bases and benchmarks for that analysis will have to be considered.

We also heard from some members, especially those from rural areas, who are worried about the potential impact of TTIP on sectors such as agriculture. We heard reservations about the Commission’s economic assumptions that necessarily inform our own economic modelling; a number of members addressed that point.

As I said in my opening remarks, and as reflected in the debate, we cannot be certain about the economic impacts of TTIP. However, the Scottish Government is clear that, whatever those impacts, TTIP must not result in a lowering of standards, it must not affect the Government’s ability to regulate, and it most certainly must not come at the expense of the NHS and other public services.

Many members, as Kevin Stewart did, expressed concerns that TTIP would result in a lowering of environmental, food and other standards and that regulatory incoherence might lower standards by the back door. Concerns from those in rural areas must be considered. That is why the Cabinet Secretary for Rural Affairs, Food and Environment has been pressing the UK Government on the issues, and why we will continue to hold the Commission to its word that standards will not be lowered. George Adam was absolutely right to say that the agriculture council was wrong to move a discussion on TTIP into private session; the discussion should have been public.

The committee’s inquiry has helped us to understand what TTIP and ISDS are and how they work, but many of us are unconvinced, particularly about ISDS. That scepticism stems from the examples we have heard about today: how tobacco companies and others have used ISDS in other countries to undermine the Government’s ability to act in the public interest. It also stems from the knowledge that the EU and the US have strong and well-developed judicial systems and that domestic courts are the best place for dealing with disputes. To Jean Urquhart I say that the Scottish Government is not convinced that ISDS is necessary and takes the view that disputes between investors and the state should be settled in domestic courts.

Most of all, we have heard strong concerns that TTIP could lead to the privatisation of the NHS and other public services. Members argued that TTIP will force NHS services to be put out to tender and reminded us that that threat applies across public services. We also heard concerns that, because the UK is the member state, the privatisation of services south of the border could set a precedent for market access for US healthcare companies here in Scotland. That is not acceptable.

Our concerns have therefore been ably set out in the debate. What we have heard from the UK Government has done nothing to put those concerns to rest. That could easily be done by guaranteeing that there will be an explicit exemption for the NHS on the face of any agreement. The Scottish Government will continue to press that case.

I finish by once again applauding the committee for its effective scrutiny of this complex issue and for shining a light on what TTIP might mean for Scotland. Adam Ingram commented that this was one of the most important pieces of work that has been conducted in his 16 years in the Scottish Parliament. I reiterate the Government’s strong view that, whatever the economic impacts of TTIP, it must not come at the expense of the NHS and other public services, or of the right of Government to regulate, and it must not lower standards.

I commend the committee for its work and its commitment to continue that work.

Photo of Hanzala Malik Hanzala Malik Labour

It is important that we have had this opportunity to debate the committee’s report on TTIP. I thank all the members who have spoken in this lively and wide-ranging debate. I also thank all those who gave evidence to the committee, including the witnesses, the cabinet secretary and MEPs, as well as the clerks for their support and assistance. We have valued immensely their inputs.

Our convener, Christina McKelvie, and others acknowledge that the Scottish Parliament has no direct role in ratifying the TTIP agreement. However, the inquiry has allowed the Scottish voice to be heard.

The committee’s report was sent to the Scottish and UK Governments and the European Commission. It raises issues for each of the bodies. To date, we have received one response only, which was from the Scottish Government. I thank it for its input.

When the committee receives responses from the UK Government and the European Commission, I hope that they will provide clarity on the issues that the committee’s report raises. I also hope that the report can influence the negotiation of an agreement that is helpful to Scotland.

A key inquiry finding is that TTIP-related decisions must go through layers of government—from the European Commission to the UK Government as the European Union member of state, and from the UK Government to the Scottish Government. Where there are concerns in Scotland, those must be sent back through all those layers in the hope that they will be taken into account in the eventual negotiations. Therefore, the feeling of frustration in some quarters is understandable.

We have heard many of the same concerns about TTIP brought up again. Before turning to those, I will highlight three areas in which there could be positive outcomes for Scotland.

First, on the elimination of tariffs, the Scottish Textile and Leather Association described the problems faced by its sector. It said that, with the current tariff barriers, different products attract very different tariffs. It suggested that TTIP would bring simplicity and a level playing field, because there are countries in parts of the world outside the European Union that have zero tariffs on textile goods.

Photo of Alison Johnstone Alison Johnstone Green

The member speaks about conditions that might benefit trade here, but what about the impact of the trade deal on low-income countries? The Westminster Environmental Audit Committee’s report on TTIP says:

“TTIP is likely to produce a negative impact on a number of ... countries … The increase in trade between the two partners will be mirrored by substantial trade diversion.”

That carries threats for low-income companies, which will lose market share. Will the member confirm that the committee will look at that aspect of the deal in its on-going investigations?

Photo of Hanzala Malik Hanzala Malik Labour

I am quite happy to give an undertaking that we will look at those issues.

The removal of tariffs will help Scottish businesses export to the US market.

Secondly, we would see positive developments in relation to improved co-operation as unnecessary regulatory barriers would be removed.

Thirdly, in evidence to us, Scottish Enterprise highlighted the importance of US investment in Scotland and suggested that a trade agreement could provide further inward investment. Any inward investment in Scotland is positive for our economy.

In addition to the potential positive developments, there are negative issues, as we have heard. The Cabinet Secretary for Finance, Constitution and Economy acknowledged in evidence to the committee that TTIP

“can open up our markets here in the same way as it opens up markets to which we hope to gain access.”—[Official Report, European and External Relations Committee, 5 February 2015; c 28.]

However, until the agreement has been finalised, we will not know which sectors will benefit and which will not. That is why the committee recommends that the Scottish Government assess the impact of the final agreement and work with businesses across Scotland and the enterprise agencies to follow developments in relation to TTIP very carefully.

Another area of debate is on public services. Despite assurances from Lord Livingston, we agreed that the protection of public services, particularly our health service, is important. Investment protection and investor-state dispute settlement are vital issues, and the committee will follow developments on them.

NFU Scotland told the committee that it was concerned that there would be an

“erosion over the course of time”—[Official Report, European and External Relations Committee, 27 November 2014; c 26.]

in relation to food standards. Similarly, the World Development Movement was worried about the “watering down” of regulation to protect health, workers and the environment. Those areas will be discussed in future rounds of negotiation and need a watchful eye kept on them.

I emphasise that the debate is not the end of the committee’s work on TTIP. The recommendations that are set out in our report and have been debated today represent our initial position on the matter. The committee has agreed to conduct further inquiry work on TTIP, particularly to explore issues relating to ISDS and public services. Public services are an important element for us. Of all the elements that have been discussed, protecting the health service and other such services is of particular concern to us. It is important that the implications of the agreement for Scotland continue to be scrutinised through the committee’s deliberations.

I am grateful for all the evidence that we received. People went to great lengths to give us written submissions and, as has been mentioned, we have received a lot of emails. The feeling and depth of concern in Scotland about TTIP have been made clear. A lot of people want us to give the issue our very best scrutiny and to continue that work. The committee is committed to continuing the programme to the best of our abilities. We will continue to get support from industry. We perhaps need to concentrate more on some of the agencies that provide information for us on industries, to ensure that we continue the good work that has been done to date.

I am proud, as I am sure my convener is, of all the evidence that we have received, as well as the emails that we continue to receive from constituents. They have given us a great deal of insight and have proven that there are concerns out there. Despite the fact that we do not have a direct input into the TTIP agreement, we nevertheless have a responsibility to pass on the concerns to all concerned to ensure that they are taken into account when, at long last, it comes to making an agreement.

Photo of Adam Ingram Adam Ingram Scottish National Party

I commend the European and External Relations Committee’s report to Parliament. Having been a member of this place for some 16 years, I can safely say that this is one of the most important and wide-ranging pieces of work that I have been involved in as a committee member. That is evidenced not least by the substantial level of correspondence that I have had with concerned constituents over the implications of TTIP.

There is an irony to such an observation, given that the Scottish Parliament and Government have no formal role in the negotiation or ratification of EU trade agreements, despite the fact that TTIP could have a significant effect on a broad range of devolved issues, from the delivery of public services such as the NHS to democratic policy making and regulation.

We are currently dependent on the UK Government to represent Scottish interests, including on devolved matters, and I question whether there is sufficient engagement with the Scottish Government by the UK Government to secure those interests. I note the Deputy First Minister’s comments in that regard in his response to the committee’s report. I hope and trust that the matter will be addressed as a priority when the new UK Parliament reconvenes after 7 May. I am sure that we will hear a stronger and louder Scottish voice in that place then. The Scottish public’s concerns deserve much more serious attention.

Turning to the substance of TTIP, it is hard to determine the scale of the costs and benefits of an agreement that is yet to be reached. As ever, the devil will be in the detail. We know that there will be winners and losers. The economic modelling that has been done with the limited information available suggests a relatively modest net gain of just 0.2 to 0.3 per cent of GDP for Scotland, with increased exports being offset, at least in part, by increased imports from the USA. The US is of course our largest trading partner outside the EU: we sell some £3.9 billion-worth of goods and services per annum to the USA.

It is arguable that there are gains to be made not just by abolishing tariffs and speeding up customs, but by doing away with particular licensing regimes or duplicate testing regimes, which would make life easier for SMEs in particular.

Photo of Alex Rowley Alex Rowley Labour

I, too, welcome the report and congratulate the committee, the clerks and those who worked on it. I sat on the committee for the first part of the evidence taking and I enjoyed the evidence sessions. However, the report takes us only so far, and I have not heard anyone other than Jamie McGrigor speak in favour of TTIP. This cannot be the end of the matter, after which we blame Westminster, Europe or some unelected quango in Europe. If we believe that this is a bad deal for Scotland, this Parliament and the Scottish Government need to start to set out the case against it and campaign to put a stop to it.

There is a bit of confusion. In 2013, Nicola Sturgeon spoke to the European Policy Centre in Brussels and said:

“Earlier this month, the European Union and the USA announced that they would work to establish a Transatlantic Trade and Investment Partnership.”

She went on to say:

“For Scotland, for whom the USA is our largest trading partner outside the EU, such a partnership will be especially good news.”

That was the Scottish Government’s position back in 2013. The position has moved a bit since then and the Government seems to recognise that perhaps it is not such good news. We need clarity.

When the committee took evidence, it struck me that big claims were being made about the deal and how good it would be. For example, one of the witnesses talked about “raising global prosperity”, but when challenged he was unable to back that up with any evidence. That is the key point. Many claims have been made about what TTIP would be good for, but there is no evidence to back up those claims.

The evidence from the STUC and the trade unions has been particularly important. Members have talked about excluding the NHS from the agreement but, as Unison said, it is not just the NHS but all public services that must be excluded. If we go ahead with the deal, we should be talking about excluding all public services and removing any ISDS, through which a large multinational corporation could sue a Government in order to get access to public services, to funding and to the way in which we govern our country, through public procurement and the way in which we deliver public services. The Convention of Scottish Local Authorities has also made that point.

There are those who are of the opinion that if we get the guarantee on the NHS and other public services—if we were able to secure all those agreements—there would be very little interest in America in coming across and getting into any trade agreement, because if they cannot get into our public services and health service they do not see what is in it for them. The question is, what is in it for us? We have heard no evidence today that there would be any major benefits.

The STUC, for example, says:

“No authority (including the US Trade Representative, European Commission, UK and Scottish Governments) currently seems able to present a persuasive case on the economics of TTIP. The available evidence points towards a deal that may boost corporate profits but do little to create quality sustainable jobs.”

When representatives from Scottish Enterprise gave evidence to the committee, they talked about the advantages of American investment and major employers, such as Amazon, coming to Scotland. The Government lined up to put millions of pounds of Scottish taxpayers’ money into Amazon, but are we really saying that the company’s employment practices are the kind that we would want to support? If that is what TTIP has to offer, is that what we want?

I accept the point that Jamie McGrigor makes. Many people are lining up to tell us what the advantages of TTIP might be, but no actual evidence has been shown to prove it. The STUC goes on to say:

“No serious efforts have been made to quantify the impact of TTIP on the Scottish economy. All the evidence presented so far—at EU, UK and Scottish level—indicates that the best case scenario is a small positive impact on growth and jobs.”

The evidence has not been presented, and the cabinet secretary and the Scottish Government need to start to look at the arguments and to get the analysis done to demonstrate whether any economic benefits can be accrued from TTIP. The evidence that we have so far suggests that that is not the case.

According to the STUC,

“Trade agreements have most impact on growth where traditional barriers to trade (tariffs and quotas) are high. However traditional barriers to trade between the US and EU are already very low. The trade weighted tariff protection in the US for EU exports is estimated at 2.1% while the trade weighted tariff rate for US exports to the EU is estimated at 2.8%.

Therefore, removing these already slight barriers will have a minimal impact on growth; a conclusion borne out by the very research the European Commission uses to promote the benefits of TTIP. The very best case scenario presented by the Commission—one that is highly unlikely to be achieved—is a 0.5% increase in EU GDP”.

I suggest that the only people who would benefit from TTIP would be multinational companies.

I say to the Scottish Government that it is one thing to bemoan TTIP, but it is another to get the evidence and to start to build a case. If we can show that TTIP would be bad for Scotland and for the rest of the UK, we can build a campaign across the UK that says that we reject TTIP, that we do not accept it and that we will not give up on the terms and conditions and the quality of life that we have put in place for workers across Scotland and the UK.