Scotland's Vision for Trade: annual report - March 2022

2. Engagement with the UK Government on trade policy

Where particular trade-related levers are currently reserved to the UK Government, the Vision sets out how we think it should use those levers to act in a way that is supportive of Scotland's economy, people and the planet.

Our engagement with the UK Government on FTA negotiations, the implementation of the UK-EU Trade and Cooperation Agreement and WTO business – detailed below – seeks to promote those Scottish trade priorities and principles, and defend trade issues of importance for Scottish people and businesses.

2.1 Free Trade Agreements (FTAs)

Scotland's role in the development of FTAs

Since leaving the EU, against Scotland's wishes, the UK Government has embarked on a programme of negotiating Free Trade Agreements with countries around the world. In many cases, these agreements involved replicating the existing trade agreements which Scotland previously benefited from as part of the EU. The UK Government is also pursuing new trade agreements with countries such as Australia, New Zealand and India. While presented as a benefit of leaving the EU, the reality is that the expected GDP increase as a result of these FTAs is tiny, and will in no way compensate for the loss in trade as a result of Brexit.^[5]

We have consistently made the case for a full role for the Scottish Government and the Scottish Parliament in all trade negotiations. Scotland's Role in the Development of Future UK Trade Arrangements, published in August 2018, made the detailed case for such a role, noting that modern trade agreements merge a range of reserved and devolved policy areas. This has been evident in the agreements considered so far. For example, decisions taken on tariffs (which are reserved) impact heavily on Scottish agriculture (which is devolved). Despite this clear interest, the UK Government has offered little meaningful involvement in the development of these trade agreements, a position which is increasingly untenable. The Scottish Government has, however, engaged constructively, and in detail, on UK Government FTA negotiations, protecting and promoting Scotland's interests, and using the policy positions set out in the Vision as a basis for doing so.

Scottish Ministers have repeatedly raised Scotland's interests, priorities and concerns with the UK Government, and stressed the need for full involvement to ensure that any new FTAs reflect our needs and provide opportunities for our companies. Scottish Government officials have worked closely in support of this aim with their counterparts in the UK's Department for International Trade (DIT) and Department for Environment Food and Rural Affairs (DEFRA), as well as alongside other devolved administrations. In the period since January 2021, we contributed to the following negotiations:

• UK-Norway, Iceland, and Liechtenstein FTA (signed July 2021)
• UK-Australia FTA (signed December 2021)
• UK-New Zealand FTA (signed 28 February 2022)
• UK-Canada FTA (negotiations ongoing)
• UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (accession process ongoing)
• UK-Greenland continuity-style FTA (negotiations ongoing)
• UK-Gulf Cooperation Council FTA (negotiations expected to open during 2022)
• UK–India FTA (negotiations ongoing)
• UK-Mexico FTA (negotiations expected to open during 2022)

We have also sought to leverage other opportunities to influence UK trade policy and record the Scottish Government's view, e.g. by responding to the House of Commons International Trade Committee's Call for Evidence as part of its scrutiny of the UK-Australia trade agreement in January 2022 and the House of Lords International Agreements Committee in September 2021.^[6]

Implementing the EU-UK Trade and Cooperation Agreement

Following the signature and entry into force of the EU-UK Trade and Cooperation Agreement (TCA), the Scottish Government has engaged constructively with the UK Government on its implementation, while advocating for the UK to build on the terms of the deal. Scottish Government officials have attended the Trade Partnership Committee, as well as a range of specialised committees under the TCA (including on SPS, customs cooperation, trade in goods, services, regulatory cooperation, and technical barriers to trade), inputting through UK Government delegations to ensure that Scotland's interests are understood and raised.

The Scottish Government continues to push for the deepening of our relationship with the EU, our nearest and largest international trading partner, to be prioritised in UK trade policy. In line with this aim, we have developed a needs assessment on gaps in the TCA in relation to goods, with specific asks of the UK government. Under the TCA, trade in services is more restricted than as an EU member state. Part of these restrictions come from reservations to the agreement which allow parties to opt out of aspects of the liberalisation of services and investment. It is important for companies to understand these restrictions. We have therefore pressed the UK Government to publish a tool to enable businesses to find specific reservations by nation and sector.

Look ahead

In the year ahead, we will continue to advance Scotland's interests in FTAs, as the UK Government pursues accession to the CPTPP, undertakes negotiations with India and the Gulf Cooperation Council and prepares to enter into negotiations on a new agreement with Israel, and other countries. We will work with the UK Government, in line with the principles in the recent Intergovernmental Review, but will continue to press for a full role in development of new FTAs and for the UK Government to fully respect our devolved responsibilities and the role of our Parliament.

We will continue our calls on the UK Government to prioritise building on the Trade and Cooperation Agreement with the EU in support of goods, services and digital trade, while upholding high standards.

2.1.1 Applying our principles to Free Trade Agreements

The Vision underpins our approach to FTAs. We are determined to do all we can to ensure that they work for Scotland and support the outcomes in our National Performance Framework.

We have therefore scrutinised the UK Government's proposals for each new FTA and assessed them against the five principles (Inclusive Growth, Wellbeing, Sustainability, Net Zero and Good Governance) in the Vision. Examples of how we have applied the five principles are set out below.

Inclusive growth

As there are winners and losers from trade, it is important to consider the wider socio-economic impacts of trade agreements. We have highlighted a number of concerns with the UK Government's scoping assessments – which detail the likely economic, social and environmental impacts of a new FTA – prior to negotiations, and with the final impact assessments, published on completion of an FTA. These assessments are important in identifying how an FTA might impact on Scotland's economy, people and environment. However they lack sufficient modelling on crucial differential impacts. For example, it is not possible to see detailed impacts on particular regions of Scotland, or Scotland as a whole, and there is limited assessment of consequences for different parts of society and protected groups.

In addition, the UK Government's approach to economic modelling looks 15 years into the future, but does not consider short- to medium-term adjustment costs, which may disproportionally affect groups more marginal in the labour market. This means we do not know how people or businesses may be affected in the early years of a trade agreement coming into force, making it difficult to plan support for those who are negatively affected.

We have consistently called for this modelling to be improved, as well as for more detailed assessment to be undertaken on the different trade profiles of UK nations with FTA partners. We have also repeatedly called on the UK Government to collect detailed disaggregated data on the impact of trade policy on different groups, including in their roles as exporters, producers, workers, consumers and public services users. We have asked the UK Government to mitigate any undesired effects of FTAs through increased funding to support affected sectors or localities.

Sustainability and wellbeing

We continue to emphasise the need to avoid the prioritisation of short-term market access gains over longer-term economic, social and environmental goals. For example, reducing tariffs on UK food imports, reducing fair competition on food safety and animal welfare, or diluting digital rights may have a detrimental effect in the longer term. When considering the impacts of trade deals, we have asked the UK Government to look beyond GDP growth and changes in income, and to consider individual wellbeing. We have made it clear that any deal agreed must promote wellbeing and avoid increasing inequality.

Net zero

We have consistently called for all FTAs to link trade and climate change and help to unlock the economic opportunities from the transition to net zero. Scotland is well placed to be a global leader on this issue, and we want FTAs to support that aim. We have pressed the UK Government on the following:

• Compliance with the Paris Agreement should be a 'red line'. However, we are concerned that environmental provisions within FTAs often lack robust enforceability. In particular, some FTAs do not reference specific temperature goals, which is a way to encourage compliance with the Paris Agreement. For example, the UK-Australia FTA makes mutual commitments to comply with the Paris Climate Agreement, but does not reference the 1.5 degree temperature goal – a clear example of where the UK's inclusion of climate change concerns in FTAs falls below our level of ambition.
• Net zero and environmental commitments should be at the forefront of impact assessment, including emissions and indirect land-use change. The relevant provisions in an agreement should be subject to formal dispute resolution to ensure compliance.
• Innovative and robust provisions on the environment should be included. We have pressed the UK Government to include commitments to multilateral environmental agreements across all FTAs and welcome where this has been achieved. We see the reciprocal commitments agreed on labour, environmental and climate standards in the UK-Norway, Iceland, and Liechtenstein FTA trade agreement as a positive example of this.
• Liberalisation of trade in environmental goods and services should be a key offensive interest. We have actively engaged with the UK Government to promote the liberalisation of trade in environmental goods and services as a key offensive interest in order to support Scotland's environmental goods and services sectors to export more. We therefore welcome progress on this in the UK-New Zealand FTA and at the WTO.
• Flexibilities should be provided to Least Developed Countries, in line with the Paris Agreement.

We have also engaged with the UK Government and International partners on Fossil Fuel Subsidy Reform, pressing them to increase transparency and reporting of these subsidies. We welcome recent progress on this as part of trade negotiations with New Zealand, and at the WTO, and will continue to engage with the UK Government on this issue.

In the Vision we indicated that we are keen to explore new, innovative trade and climate agreements, such as the Agreement on Climate Change, Trade and Sustainability (ACCTS) between New Zealand, Costa Rica, Fiji, Iceland, Norway and Switzerland. On this basis we have encouraged the UK Government to explore plurilateral options, including joining ACCTS and the WTO's Trade and Environmental Sustainability Structured Discussions.

Good governance

Scotland is committed to being a good global citizen and trading partner, respecting international law, supporting human rights and seeking to build global relationships based on trade. Where relevant we have raised concerns linked to the human rights approach of potential trading partners, calling on the UK Government to ensure that future trading partners comply with fundamental human rights and international law. We have called for FTAs to be used to encourage progress in this area, with a view to raising standards, establishing or promoting forums for dialogue and sharing best practice.

The UK Government has committed to encouraging all states to uphold international human rights obligations, but we are concerned that there is often limited consideration of human rights in scoping assessments. Therefore we have called on the UK Government to undertake human rights impact assessments and engagement with NGOs/human rights defenders prior to the negotiation of FTAs. For example, we asked the UK Government to conduct a human rights impact assessment and engage with NGOs and human rights defenders prior to its proposed accession to the CPTPP. The UK Government should use the accession process to create a dialogue around human rights and to use trade remedies to uphold human rights in member countries.

2.1.2 Thematic areas of interest

We have used and developed the positions set out in the Vision to input into the wide range of policy areas covered by FTAs, protecting and promoting Scotland's interests. These areas include: trade in goods; food, drink and agriculture; services and investment; digital trade; regulation; climate and the environment; intellectual property and the NHS; human rights; international development; gender; and Investor State Dispute Settlement.

Trade in goods

Trade agreements can provide opportunities for Scottish exporters to enter or develop new markets, bringing Scotland's world-renowned products to new consumers. They can also make it easier for companies to import essential components used in manufacturing to enhance their competitiveness. However decisions on goods market access, including tariffs and quotas, need to reflect Scotland's needs and protect domestic producers from unfair competition. We continue to press the UK Government for greater involvement in these decisions to ensure that the FTAs they negotiate are in Scotland's best interests.

While tariffs can be a significant barrier to increasing exports, in many cases non‑tariff barriers can be equally or more important. We engage constructively with the UK Government on Technical Barriers to Trade (TBTs) faced by Scottish businesses.

The Scottish Government's position is that the TBT chapter in any agreement should go beyond obligations in the WTO TBT Agreement and include provisions on issues such as transparency; procedures for assessing conformity to make it easier for Scottish businesses to export products; and provisions on sharing information.

We have also pressed the UK Government to include specific sectoral annexes, where barriers to trade are complicated. For example, in FTA negotiations with Australia and New Zealand, we pressed the UK Government to secure a spirits annex that includes a legal definition of whisky in the Australia New Zealand Joint Food Standards Code. While disappointing that this was not included in the agreement with Australia, we welcome the inclusion in the UK-New Zealand FTA of a spirits annex, which commits New Zealand to supporting any UK application to secure a definition for whisky in the Australia New Zealand Joint Food Standards Code. This is a step towards achieving stronger protection for Scotch Whisky.

Food, drink and agriculture

Scotland's food and drink is renowned around the world for its high quality, high standards and provenance. Scotch Whisky is one of Scotland's most successful global exports, with Scotch Beef, Scottish Farmed Salmon and speciality seafood highly prized internationally.

The food and drink sector in Scotland has suffered extensively as a result of Brexit, with exports to the EU down significantly.^[7] While we are keen that new FTAs offer opportunities for Scottish exporters, they will not compensate for the barriers that the UK Government has erected between Scotland and the EU, our largest export market for food and drink exports.

The FTAs negotiated with Australia and New Zealand are likely to be damaging to Scotland's agri-food sector, with the UK Government's own analysis showing a reduction in output within this sector. In both cases, there will be a significant increase in the quantity of Australian and New Zealand beef and lamb that can enter the UK tariff-free from day one of the agreements, and these quotas will increase each year.

Throughout the negotiation of both FTAs, we pressed the UK Government to protect Scottish producers from imports that are produced to lower environmental and animal welfare standards than Scottish producers are required to meet. However this protection was not included in either agreement, opening the door to agri‑food imports, which, in some cases, may be produced to lower animal welfare and environmental standards, undercutting UK domestic food production standards.

The unique provenance of Scotland's food and drink exports are protected by Geographical Indications (GIs), under a system developed by the EU to protect the origin of particular food and drink products. Iconic Scottish exports such as Scotch Whisky, Scotch Beef and Scottish Farmed Salmon all benefit from this protection. Although the UK Government treats GIs as reserved, the Scottish Government has consistently made the case for all Scottish GIs to be recognised in trade agreements and for greater involvement of devolved administrations in negotiations related to GIs. While the UK Government has secured continued GI protections in trade agreements that it rolled over from the EU, it was not able secure any additional recognition of GIs in new FTAs negotiated, such as with Australia or New Zealand. However, should Australia or New Zealand establish a GI system in future, UK GIs will be put forward for consideration.

The Scottish Government recognises the serious threat to global health from antimicrobial resistance (AMR) – which limits the effectiveness of vital drugs – and the role that agriculture and aquaculture can play in this. The WHO has declared AMR as one of the top public health threats facing humanity, as misuse and overuse of antimicrobials in agriculture and aquaculture drives the development of drug-resistant pathogens. It is estimated that, without urgent global action, up to 10 million people could die each year due to AMR by 2050.^[8]

We have therefore pressed the UK Government to secure ambitious commitments on antimicrobial resistance and animal welfare in all FTAs, as it did in its FTA with Norway, Iceland and Lichtenstein and within the UK-EU TCA. However, the commitments in the UK-Australia and UK-New Zealand FTAs do not go far enough and it is unclear what meaningful impact, if any, such weak commitments will have. We will therefore continue to work with the UK Government to encourage a much higher level of ambition in all upcoming FTAs.

Services and investment

New FTAs should open opportunities for Scotland's strong services sectors to ensure they benefit from opportunities to grow their exports. Scotland is a leading exporter of services worldwide in areas such as professional and business services, financial services, architecture and education. However, leaving the EU closed off opportunities for Scottish companies through the EU single market and neither the EU-UK TCA nor FTAs with other countries will be able to replicate the same level of market access.

FTAs contain restrictions on what and how services can be exported and this is crucial to assessing how beneficial the agreement will be to Scottish companies. Specifically, we have undertaken a detailed review of reservations in trade agreements to increase our understanding of their impact and the levers available to influence them.

As an example, we successfully argued for the maintenance of the aquaculture reservation in the UK-Norway, Iceland, and Liechtenstein FTA, which will allow measures to be taken in the future on international investment in the sector. This supports the stability and sustainability of the Scottish aquaculture and fish farming industry. We have also made this a key focus of our input into FTA negotiations with Canada, where we believe it has the potential to have a similarly significant impact.

We have advocated for, and defended, services interests in sectors of key importance to Scotland, including architecture and legal services. For example, we called for ambitious mobility provisions in the FTA with Australia to facilitate export opportunities for Scottish services firms and mitigate in part the impact of the loss of freedom of movement with the EU. We therefore welcomed the agreed mobility provisions.

The Scottish Government has been closely monitoring steps taken by the UK Government domestically on the regulation of professions and the recognition of professional qualifications from overseas in the context of the UK Recognition of Professional Qualifications Bill. Any changes, and any subsequent trade deals which are negotiated based on these changes, must reflect different approaches to the regulation of some professions in Scotland and must not prevent future regulation in areas of devolved competence. Protection of Scotland's capacity to regulate in this area is necessary to, for example, ensure the Scottish Government can agree to mutually recognise professional qualifications, within its competence, with trading partners in the future. The Scottish Government is concerned that the UK Government refused to amend the Bill to provide that UK Ministers should not be able to legislate in devolved areas of responsibility without the consent of the Scottish Parliament. The decision to press ahead with the Bill without the consent of the devolved legislatures is a clear breach of the Sewel Convention and Scottish Ministers will escalate this through the appropriate intergovernmental process.

We have made clear to the UK Government that any FTA must also provide full protection for Scotland's public services, including the NHS, from enforced privatisation, competition or fragmentation

Digital trade

The Scottish Government wants businesses to take advantage of the opportunities presented by the acceleration of digital trade, including through FTA provisions. We welcome the opening up of new opportunities for Scottish businesses and reduction in barriers to cross-border trade, for example provisions on digital identity cooperation in FTAs with Australia and Singapore.

However, the Scottish Government has argued consistently that digital trade provisions in trade agreements must balance economic and social considerations, upholding data protection and digital rights.

We have prioritised the issue of data flows, pressing the UK Government to fully assess longer term consequences of data provisions in FTAs, to prevent, for example, any restrictions in future domestic regulation on data protection and privacy.

As part of this we have also prioritised maintaining a positive EU data adequacy decision, which allows UK businesses and organisations to receive personal data from the EU and EEA without having to put additional arrangements in place. Digital trade provisions in other trade agreements could make this more difficult for the UK to maintain, given that the adequacy decision will be subject to review, including in the light of any changes in EU standards. Loss of data adequacy with the EU in the future would create a significant barrier to trade for businesses.

Regulation

Scottish Government officials have maintained regular engagement with UK counterparts across all live and upcoming FTAs on issues relating to Good Regulatory Practices and Regulatory Cooperation (GRPRC).

In line with the principles set out in the Vision, we agree with the UK Government that regulation should be designed in a way which helps to minimise burdens on business, and as such, supports commitments to good regulatory practices. However, at its core, regulation is a tool to achieve public policy objectives. We have therefore called on the UK government to ensure that commitments made under GRPRC chapters do not impact the right to regulate to achieve public policy goals, or prevent governments from regulating in accordance with the precautionary principle.^[9]

The Scottish Government's commitment to regulating in the public interest also means that there will be limits on the extent to which we will be prepared to enter into agreements on regulatory cooperation when public policy objectives are different. We have therefore called on the UK Government to ensure that any commitments on regulatory cooperation made under the GRPRC chapter are voluntary in nature. We welcome that, in the case of the TCA, and FTAs with Japan and Australia, these provisions are voluntary and non-binding, and call for this approach to be maintained in all upcoming and ongoing FTA negotiations.

Intellectual property and the NHS

We have made clear that the NHS, its services, and the price paid for medicines should not be included in any trade-related negotiations with other countries. The UK has upheld this position in FTAs agreed to date. However, we have reiterated our concerns about the potential for pressure to be placed on the UK to offer concessions in this area to future FTA partners, such as the US, and as part of the UK's accession process to CPTPP. For example, stakeholders, including the British Generic Manufacturers Association, have highlighted the potential for CPTPP rules to delay generic and biosimilar medicines coming to market, resulting in increased medicine prices for the NHS. The Scottish Government will continue to press the UK Government to recognise and address these concerns.

International development

In the Vision we recommended that all tariff liberalisations (either through FTAs or unilaterally) be impact-assessed and published to ensure liberalisations do not degrade the tariff preferences of developing countries. The Scottish Government therefore welcomes provisions that allow for ongoing assessment and monitoring of the impact of FTAs on developing countries, although we would support stronger commitments on this. This approach, as in the UK government's recent India FTA scoping assessment, contributes to considering the broader implications of the deal on the preferences of least developed countries as part of the Generalised Scheme of Preferences (GSP), and ensuring these interactions are fully assessed and monitored.

Gender

Taking account of the impact of trade policy and trade deals on women as economic and social operators is a key ask in the Vision and we have consistently pressed for this to be reflected in UK FTAs. Whilst the inclusion of a dedicated chapter on Trade and Gender Equality in the UK-Australia and UK-New Zealand FTAs is welcome, the text of the agreement does not go far enough to address the differential impacts of trade on gender or recognise women as more than economic operators. Gender equality in FTAs must not be confined to a single chapter, but must be mainstreamed throughout the entirety of the text. FTAs must also contain robust monitoring and accountability mechanisms, including frameworks for analysing gender-disaggregated data, so that commitments are actioned and improvements to performance can be made.

Investor State Dispute Settlement (ISDS)

In recent years stakeholders have been increasingly critical of ISDS provisions in FTAs, noting concerns about the potential for such provisions to lead to 'regulatory chill', whereby governments may be deterred from regulating in the public interest, and about the expense of investor-state arbitration.

In line with the position outlined in the Vision, we have consistently called on the UK Government to ensure that any ISDS mechanism will not prevent the UK and Scotland from regulating on health, social, environmental and economic matters. Any such system must be transparent, based on judicial procedures, and permit meaningful representations by all parties with a potential stake in the matter. Provisions in this area have the potential to impact Scotland significantly and limit the ability of the Scottish Parliament to regulate in devolved areas, and we have therefore pressed for increased involvement in negotiations on this.

2.2 Wider engagement

World Trade Organization

In January 2021, the UK took up its independent seat at the WTO. Since then, the Scottish Government has engaged with the UK Government to ensure that Scottish interests are identified, protected and promoted in this forum, reflecting commitments made in the Vision.

We have also developed and communicated positions on high-profile issues related to the WTO that matter to Scotland, using the positions set out in the Vision. For example, we have identified priorities for progress ahead of WTO's postponed 12th Ministerial Conference (MC12) on fisheries subsidies, trade and environment and trade and gender. We have sought to influence the UK Government to develop an agreed approach on these issues.

In a clear demonstration of Scotland's commitment to addressing the global differential impacts of trade, the Scottish Government also joined over 100 countries and the WHO in advocating for a TRIPS waiver agreement at the WTO in December 2021. This waiver intends to address vaccine supply inequity between high and low income countries by temporarily removing intellectual property barriers preventing developing countries from producing Covid-19 vaccines. We welcome recent progress made by the EU, US, India and South Africa towards agreeing a TRIPS waiver for Covid-19 vaccines. It is an important step forward, but there is still room to build on this proposal to ensure that the final agreement goes as far as it can to address the urgent need for fairer access to vaccines and Covid-19 health treatments across the world. We will continue to press the UK to drop its opposition to the TRIPS waiver and to enable agreement to be reached at the WTO as soon as possible.

We will continue to engage with the UK Government on issues of WTO business important to businesses and people in Scotland. We will continue to call on the UK Government to involve the Scottish Government in UK WTO delegations (for example, where matters falling in devolved policy areas are in question) and engage with the Scottish Government on any specific trade concerns raised at the WTO that relate to or impact on Scotland.

Generalised system of preferences

In the Vision we recommended that the UK Government explore how the UK's Generalised Scheme of Preferences (GSP) mechanism could be improved. We suggested that the UK Government undertake an impact assessment to explore the following:

• Expanding product coverage for countries within the general and enhanced frameworks.
• Increasing tariff reductions for countries within the general framework.
• Relaxing rules of origin requirements to increase cumulation.
• Increasing regional value-added production.

In July 2021, the UK Government announced its intention to develop a new GSP mechanism, called the Developing Countries Trading Scheme (DCTS). We have submitted our views, and encouraged our international development partners to do the same. We will continue to engage with the UK Government as they formalise the DCTS over the coming year.

Market access

The Scottish Government continues to engage regularly with the UK Government to ensure that our work on market access complements theirs. We welcome increased engagement in this area since the publication of the Vision. We have also been working to ensure that Scottish Development International are able to participate effectively in the market access barrier reporting and review process.

We welcome the UK Government's approach to improving its market access barrier system, and see DMAS as an effective way for our work on prioritised barriers to be coordinated with that of the UK Government. We support improvements made in the quality of data on DMAS, including in the identification of barriers that affect Scottish businesses. We also support the integration of DMAS into DIT's other public-facing trade support services to provide a single 'one stop shop' information hub for exporters.

Conformity assessment

The Scottish Government is contributing to UK-wide work on the capacity of conformity assessment bodies, while building conformity assessment capacity in Scotland, including engaging with the Construction Scotland Innovation Centre about a proposal to establish an additional accredited construction body in Scotland. While this is about ensuring that products are in compliance with UK regulations and so can be placed on the British market, there is also a link with international trade. Scotland's participation in global supply chains means that a lack of capacity could have a knock-on effect for imports into Scotland and could result in supply chain disruption. Building conformity assessment capacity also demonstrates to our trading partners that we have the infrastructure and competence to ensure Scottish products meet their standards.

Trade remedies

In the Vision we committed to ensuring that Scotland's trade and economic interests are identified and taken into account in any investigations into unfair trade practices affecting UK industry, and the administration and management of any subsequent trade remedies, both within the Trade Remedies Authority (TRA) and at ministerial level. Since the publication of the Vision, the TRA has been established, and has initiated a number of trade remedies cases, including transition reviews of EU trade defence measures, as well as some new investigations brought by UK businesses.

To ensure that Scotland's industries are adequately protected by trade defence measures, the Scottish Government has been closely involved in four trade remedies investigations for products where Scotland has a particular interest. We have engaged with TRA investigators and submitted detailed economic evidence in relation to investigations on rainbow trout, aluminium extrusions, and steel.

We continue to build our relationships with the TRA and our knowledge of the evolving UK trade remedies landscape. For example, we recently hosted a virtual visit from the CEO and Chief Executive of the TRA, who spoke with the relevant Scottish Parliament Committee, Minister and senior officials about their work, and how Scottish authorities and businesses could contribute to it. We will continue building on these relationships, including to raise the profile of the TRA's work with Scottish stakeholders.

Trade disputes

In the Vision we committed to ensuring that the Scottish Government is given a meaningful and substantive role in the preparation and conduct of disputes to which the UK is a party, where the matters in dispute are ones that engage with, impact on or threaten Scottish interests. Since then, developments in a number of international trade disputes have had an impact on Scotland, including:

• A negotiated settlement to suspend the long-running and damaging Large Civil Aircraft (Airbus-Boeing) dispute, including a five-year suspension of tariffs in place on affected EU, US and UK goods.
• We were pleased to see that the UK and US Governments announced a partial agreement on the Section 232 dispute on 22 March.^[10] We had been pressing the UK Government to reach a deal with the US to remove these tariffs, which have been affecting steel and aluminum exports since 2018. This agreement will come into effect on 1 June, five months after a similar deal came into force between the US and the EU. In the meantime, EU steel producers have been at a competitive advantage, estimated as a 25% price advantage over UK producers.

We have raised the damaging impact of these disputes on Scottish businesses repeatedly with the UK Government, offering our support – including our own analysis – in seeking the removal of these tariffs. We have also raised the issues directly with relevant foreign governments.