Both again.

Welcome back.

All those home Georgie that were in the Institute for Government.

But thank you for having us here.

And nice to see you, Sam.

And we've now got both the documents.

Um, they look miles apart, blue like an ocean apart, so they look yards apart.

What do you think of the chances of those two documents being merged into an agreement somehow?

So I think there are obviously some very clear issues where the U.

K.

And you're just on completely different pages and we know what they are.

We've discussed them in the past on this podcast even.

But issues to do with level playing field obligations there are when it comes to environment and labor protections, what rules there are governing our state, the U.

K State aid regime.

There's also issues around the role of the European Court of Justice and then also whether there should be multiple agreement.

So it should all be package is one big agreement.

But the thing that I think people should be aware off is that once you get past all of those massive issues, which is probably quite difficult to do when it comes to the nature of the future.

U K you trading relationship You in the UK largely on the same page.

You can point to a few specific issues where they differ slightly, but they know what they want and what it could look like.

It's just a case of how do we get there?

Yeah, particularly because I think on thee you side.

It's the same process I eat the commission negotiating on behalf of member states.

But actually, depending on the kind of agreement it might need to be signed off by national and regional parliaments, let alone the 27 you governments on the European Parliament, which is a new beast, much more fractured on DSO, there are many more new voices on many more you people to please on.

That could be a challenge as well, because it's not just about negotiating.

Reaching agreement is about passing that green.

What do you think?

The biggest problems here, What's what's good?

Is there a chance that we do as is threatened in the front pages of all of this walk away in June?

Is it just slow progress by June that could bring us bring us down?

I mean that June deadline doesn't It's not coming out of nowhere.

In the political declaration, they did say that that would be a high level conference at that point to take stock of the negotiations.

Of course, I think when that deadline was mentioned, that was at the time when everyone thought that UK would be leaving the on the 29th of March 2019.

So, you know, I think that anyone could walk away from this negotiation that you could walk away as well.

Is that a threat?

Yes, but of course we could find ourselves in a situation where, if that looks really likely, all of a sudden businesses start to react.

Stopped panic citizens as well.

So it will really be a question and calculating what all the risks and what would that impact be?

But at the moment, yes, I think it does make sense to say you would walk away.

It's part of the leverage on the negotiation.

You're less impressed.

It's just part of the theater.

And in a way I'm less impressed because I feel that we just bean through all of this process before where we go through all of the sort of theatrics, all of the drama, all of the chest beating.

And then we know that when the deadline actually approaches, people go.

Oh, actually that.

See if we can work something out and that's what I fear will happen this time in in a way, that's what they use counting on.

And, of course, that's a calculated risk.

The UK and proper Minister Johnson could actually decide this time around.

He means it when he says he'll walk away.

He's happy not having a deal, But my feeling is that, yes, we're gonna have a few months of very loud noise.

But the U in the UK, shouting past each other but wait don't really know what the compromise is or could be until later on.

In the year when the the looming cliff edge of leaving without a trade agreement on both sides have known for a while, I think that the U.

K's intention is not to extend that period of talks beyond the end of the That's already a very short time frame.

I think from the ease perspective, I think it does UK really want to shorten that time frame.

If you walked away in June and wasted the summer and then tried to come back.

That's time.

We can absolutely do that.

If you think about even last year.

We think about all the time we wasted your in the Article 50 period where we went, where we stormed off to have a general lecture, Nor or we decided on a leadership election in one of the two parties or in both.

You can waste a lot of time and you can walk away, but it doesn't mean even if we do walk away in June, it doesn't necessarily say to me that there's never going to be an agreement.

We could very well return to the table in September when you look at the gap between the two sides on the idea of the level playing field.

Can you imagine if the you didn't absolutely insist on certain you badging of institutions who are betrayed or you laws?

If we just said we stay where we are on, we don't regress.

Is that where the bones of a new agreement lies?

I mean, I think very quickly on this, the mandate talks about high correspond correspondent high standards, so that's not the same standards, although I think in certain areas like stated, they will be much more robust.

And I think some members, it's us very, very worried about the UK over time undercutting you on that level, playing field, no longer being level and that creating all sorts of problems.

The question is, can I just ask you just on that?

The more worried about a conservative government pumping money into the economy or just a matter of interest?

Well, I I wonder if it's not sort of because over time it's made that that term over time has come into this new mandate frequently.

I mean, it's there three or four times.

I think they are very much thinking about divergence over time.

And if you two decades on, absolutely because you know one government to the next could change where they want to invest money, what industries they want to prioritize and where they see prosperity on.

Of course, that then does impact whatever trading relations it would have.

You see it, I think I think, yes, it's not just this government, but very much any other future government, but I think that you can see a way through on this and it will require the UK backing down on certain things and also the you backing down and said If we look at environment in labor, the UK saying where were happening to commit to uphold international obligations that we already have, say, our obligation to the Paris agreement or multiple other multi natural environment agreements on We also happy to make a vague commitment, not rollback on existing levels of protection so as to get a competitive advantage over you.

But we don't want this to be enforceable.

We don't want it to be based on the U rules and the like, but and then you say, Well, we wanted Thio.

Have you put rules as a point of reference?

And we want to avoid divergence over time, and we want to go to punish you if you do diverge.

But can we find a compromise here?

I think so, because the UK is going to have to sign up to enforcement on the possibility of concessions being withdrawn so so called punishment if it does a trade agreement with the U.

S.

Because the US makes the same requests here.

So if there is just a chance that weaken re Brad rebrand this slightly.

So See, the UK needs to say they've got something but say Look, we're in a situation where on day one we've got the same rules on if we diverge over time, to the point where there is an issue in which the U.

K or the E U is out competing, the other on because they deregulated, there's a sliding scale.

The punishment, then the other party can put in place tariffs on what it comes down to is a choice between accepting tariffs now and say, Well, we don't want a free trade agreement or saying when they will agree this free trade agreement.

But we accept that if there is a problem on this front in the future, then terrorists might come back into play.

It's hard to imagine, isn't it, Georgie that there isn't actually a template for that already in the back room of it's already in their mandate.

So this is already in.

This proposal in terms of enforcement is already in the U negotiating mandate.

I think lots of people in the UK when they hear the commission saying what we want to thio commit not to roll back from existing levels of protection.

You know, they then go in their mind, Okay, But then they'll try and punishes.

What will they do?

The commission will be here telling people what to do.

Know the punishment.

If the if the UK does diverge to the point of market distortion is that you might put in place and tariffs, that's that's it.

There might be financial penalties attached that hasn't been negotiated, but that's it.

We're not talking about anything more than that.

The big problem.

I think, though, where the U is going to have to budget on state eight, where what they're asking is much more intrusive.

They're saying the UK should apply you state aid rules in the UK into the future indefinitely.

If they change, even if they change, they should be enforced by UK based bodies.

But that body should work with the commission to make sure it's compatible use doing.

And then if there's a dispute on issues of EU law, which state aid would be?

That dispute panel would refer to the European Court of Justice his opinion and take that into account when arbitrating over the dispute But again, what we're actually coming down to is if the UK diverges a lot that you might put in place Harris, I just think.

But with the initial block, you can't imagine Georgina accepting that those sorts of mechanisms.

I mean, at the moment, that doesn't seem very likely, but I do think it's worth emphasizing this.

The UK has left the European Union.

The U has been under no illusion that that meant that the UK wanted to do things differently.

The problem with the use, they don't know what the UK wants to do differently, and they're trying to plan accordingly.

And they don't really want to be in a situation where you're having punitive action and you're reacting to divergence.

They they're trying to be in a position where you prevent divert.

And the reason for that is because divergence disrupts trade flows and any disruption to tape trade flows means potentially more costs for producers and more cost For consumers, it means disruption of supply chains and all of that very costly, so they're thinking about it in sort of a much more long term way.

But the problem is what they're proposing at the moment is never going to fly here, but I suspect that, you know, in Brussels behind closed doors, they are exploring different options.

I feel probably write a piece about this, but I feel I could design something that if I could convince the prime minister to accept that he could sell right.

There's a huge amount of ifs in that, and I'm never going to be in a position to do that.

But you're a weirdo.

Dominic Cummings.

New Impact.

Well, I didn't read super forecasting or listen to an order but book book last week, so maybe I'm absolutely not no interest for reading it.

The British government is saying that it's the you who have over interpreted the political declaration that extra documents signed up to alongside the withdrawal agreement.

On that, they've added lots of paragraphs and extra definitions, which means that they're stretching the definition of level playing field and what we actually signed up to matches what we have put in this new negotiating document, whose rights I really don't have time for this argument, because just because throughout this entire process, the EU has said, we are happy to negotiate a free trade agreement with you that looks like the one we have with Canada.

However, because your big and nearby we will ask more of you in these areas.

That's been a constant throughout.

So to say this is a surprise or they moved the goal post.

That just can't be true.

We've always known this is what the you means by.

It is absolutely fine that the UK disagrees with their exact interpretation of that and how they want to implement it on the ground.

But it is not new Onda political declaration whose who's moved furthest from that?

There seems to be a cross channel insults flying.

The political declaration was always going to be ambitious.

It was going to set this idea of what an ideal future UK your relationship would look like.

It's no, it was never legally binding on dhe.

I think the you on the UK actually throughout the negotiations were saying that that negotiations still has to happen right?

If this is, you know, this is our ambition, but this is no where you know this is not necessarily where we will end up again.

I think a Sam said earlier that a lot of what's in these two Mondays?

Actually, I was in the political declaration, so it's not completely new.

Of course, it won't be exactly the political declaration.

In the same way that the final agreement won't be exactly what these mandates are about blind.

The question is, is what does that landing zone look like on?

Do we have enough time to reach that both parties are setting out there?

The EU's taken a hyper maximalist approach on certain areas of the political declaration on the UK has chosen to interpret it slightly differently because it believes it's in its interest to interpret it that way.

And that's fine.

This is the beginning of the negotiation.

This is what the UK wants.

This is what you want is pretty much they don't agree on everything pretty much the sorts of levels of the documents you'd normally expect to the beginning of a major trade negotiation that you've seen a few of them both.

So you say, well, actually used to the negotiated mandated that you used to be secret.

So it used to be that you only saw them if they leaked.

But now they now, after they've learned some lessons of their failed negotiation with the U.

S.

They have started publishing them also.