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I welcome the publication of “A Trading Nation”. It is not only a well-researched, evidence-based and extremely ambitious plan—it is also backed by an additional £20 million of investment over three years. That sum is significant, but the prize is worth much more. A leap in exports from 20 per cent to 25 per cent of Scotland’s GDP over 10 years would add £3.5 billion to our national wealth and provide 17,500 new jobs.
The publication has attracted compliments from third parties. The Fraser of Allander institute said:
“What is refreshing about this Action Plan is the level of analysis that has clearly gone in to informing the decisions that Mr McKee has taken.”
I understand that more than 20 data sets were interrogated in order to build an understanding of current and future export growth opportunities, and that analysis was conducted of current and future global import demand in 100 countries across 66 industrial sectors and 19 service sectors.
As a result of all that work, we have a clear path to progress. I welcome the decision, on the basis of that evidence, to play to Scotland’s strengths by focusing efforts on activity that will create the greatest impact on the economy.
We know that Scotland’s best-performing sectors account for 84 per cent of our export value, so it makes sense for “A Trading Nation” to focus on support for those supersectors, which make for an impressive list—food and drink; engineering and advanced manufacturing; life and chemical sciences; technology, digital and media; financial and business services; and energy.
I represent the rural South Scotland region, so I am pleased that the food and drink sector is at the top of the list, but I am not surprised, given its success and huge potential. In Dumfries and Galloway, it employs 9,000 people, which is a significant figure in relation to the region’s population. “A Trading Nation” certainly does a good job of highlighting the sector’s strengths. Food and drink account for 20 per cent—£6 billion—of Scotland’s international exports. Between 2013 and 2018, the value of Scotland’s food and drink international exports increased from £5.4 billion to £6.3 billion.
After food and drink comes the engineering and advanced manufacturing sector, which is another Scottish success story. In 2017, that sector made up 17.6 per cent of Scotland’s international exports and was worth £5.7 billion. Engineering and advanced manufacturing covers things such as metal manufacturing, machinery and equipment, transport equipment, architectural activities and engineering services including design and consultancy.
We tend to think of advanced manufacturing as involving export of goods. That is often the case, which explains why the customs union is so important, because sophisticated machines can contain parts from all over the world. Rules of origin in the customs union would present huge logistical challenges if we were outside it. We should not forget that even countries such as Norway that have agreements with the EU through the European Free Trade Association and the European Economic Area do not have agreements that cover services. No free trade agreement in the world covers services; the EU single market is by far the most important single market in the world for free movement of services.
I welcome the focus that “A Trading Nation” brings to sectors to achieve export growth, but l also welcome the parallel focus on where we should export to. The Scottish Government has profiled the 26 countries that account for more than 80 per cent of current exports, and has identified those countries’ share of the export value gap. The gap is calculated by comparing Scotland’s current exports with those of similar competitors. The top 15 countries are “priority 1 markets”, from which the Government expects the bulk of future growth to come, and they include the United States of America, China, Germany, France, Italy, Canada, Spain, the Netherlands—