Good evening.

It's bean.

1628 days since the Brexit referendum.

24 days to go until the end of transition tonight.

Still no trade deal, no sign of breakthrough.

But for those seeking optimism, there is the promise of a face to face meeting between the PM and the EU Commission president.

The idea that the key leaders would meet if there was no chance whatsoever is an odd one.

Perhaps the meeting suggests they're closer than they're actually telling us.

Or perhaps not tonight, the PM master's team to give him an overview of the problems.

As if that were not yet clear.

We'll we'll be looking at the economic and political implications both here on Din Europe in a moment.

But we start with the day's events on Nick.

What s so far today, then, Nick?

What's happened?

Well, Emily.

In the last few hours, MPs have voted to put back into the UK Internal market Bill those controversial clauses relating to Northern Ireland of the withdrawal agreement.

Those are the ones that would, in the words of the UK, lead to a limited and specified breach off international law.

Now the U is very relaxed about that because the UK government said them to them today.

If we get a free trade agreement with you, then we will let those clauses laps now on that free trade agreement.

I do have to say it is pretty gloomy on both sides of the UK side, saying No progress in the last few days, significant differences and they're saying we feel very gloomy about this.

Interestingly, Boris Johnson has been keeping in close touch, updating Brexit veterans, and they say to me they are very confident that the prime minister is not going to breach any off his red lines on sovereignty.

On one of those veterans said to me, Look, every five minutes they think it's going to be a deal on then they think it's going to be no deal.

But this veterans current thinking is it is no deal.

But I do have to say I speaking toe a minister who is pretty closely involved in this, and they said to me they do not believe that Boris Johnson would be traveling in person to Brussels to meet Ursula von der Leyen if he thought it was alehouse hopeless and they drew a parallel with the meeting that took place last year between Boris Johnson and then the.

Then he shook Leo, Va Radka in the northwest.

They met in person.

They were picture together on this minister said to me, David Frost, the chief negotiator.

He recommended that meeting and he's recommended this meeting so he knows what the optics of that picture will look like.

But obviously it could still not be a deal.

What is your sense of reaction from Brussels tonight?

The next?

Well, they are not happy, and it's interesting.

I understand that some EU ambassadors who were briefed by Michelle Barnier, the ease chief negotiator, this morning, they were very, very struck about how downbeat he looked on agreements in a sense between the EU and the UK that no agreement on the three key areas.

So that's fishing.

That's the so called level playing fields, which is, can you find common standards?

And it's the sort of the governance around all of that.

Now, the you what I'm hearing from Brussels, they're saying to the UK is we've got the memo.

We understand the importance off you taking back, retaining and respecting sovereignty, but they then say if you the UK taken absolutist view of that sovereignty that will lead you to no deal, Nick.

Thanks very much indeed.

Well, we ask the government to come on tonight.

It declined.

Now to discuss this further.

I'm joined by the Brexit here.

Daniel Hannan advises the government on trade and Telegraph Columnist on By Philip Rycroft to until last year was permanent secretary at the department for exiting the European Union.

Thanks to you both, gentlemen.

And I guess we know already these clear outlines off where the disagreements are.

Philip, can I start with you?

Where can they reach agreement?

Then you know the U players?

Well, where is the landing zone that they can find presumably on Wednesday?

It is worth remembering that these negotiations have been going on has been a for a long time now.

And there's an awful lot of stuff that will have been pinned down, perhaps 95% off a trade deal.

Sorted out teams working on legal texts have that ready for legal translation and all the rest of it.

So a snake.

What said you've got the three outstanding issues.

Fisheries eyes at the end of the day.

A numbers game?

How much access Thio UK waters to the quota and UK waters?

Does the U fleet have?

What's the transition period?

Should there be these things can be sorted out if there is a will.

The more difficult issues are the points of principle sovereignty from the UK side in terms of the ability to set our own rules from the U perspective, it's protecting the integrity of the single market from what they would see is potentially unfair competition from U K based businesses.

So just to get you to the end of that point, we know where the differences are.

But where do you think is the actual where do you see the compromise coming?

Because presumably they wouldn't they wouldn't be having this meeting Wednesday.

Also, if if there wasn't some bit where there was compromised.

Sure, I think the UK has to be able to demonstrate on the level playing field issues, particularly on state aid, which is the biggest sticking point there, that it has an independent regulator in the UK to manage state aid within a framework of rules within within the UK I think the EU side has got to accept that it cannot insist that the UK has to follow every change in U rules over time.

Somewhere in between those two positions, it seems to me there is a potential answer.

Dan, does that sound pretty much right to you?

Is that a concession that you could see our government making well on fisheries?

I think I agree with what Philip said.

I mean that the issue is sovereignty, Andi.

Once that's respected, of course we could be flexible about numbers and quotas and time scales.

I think the bigger issue is the question of whether Britain is really an independent, equal partner and neighbor of the.

I think this is an emotional rather than an economic question for Brussels.

I think there's a new element in Brussels that is still affronted by the fact of the referendum.

Andi sees Brexiters as Michelle Barnier once said Aziz, needing to teach us a lesson on still basically regards.

Britain is a kind of recalcitrant province, which is why it's not prepared to do the kind of basic trade deal with us that it has done with other countries we're now doing with other countries.

It's not really about state aid, which is much lower here than in Europe or following you social and environmental standards.

Again, our domestic standards are way, way higher than what are required is a minimum by you.

I think it's more this this reluctance completely to let go.

They still want to have some oversight.

Some sues, aren t and it's gonna last for ages.

We've got, isn't it just Isn't it much simpler, much more practical for the EU than that?

They just don't want a competitors, er right on their doorstep?

Isn't it that simple?

Well, you'll remember that when Theresa May offered a deal that would have found us very, very closely toe all you technical standards not just ecological and employment laws but aleck nickel standards that was put forward at the Salzburg Summit, and it was thrown back in her face and Michelle Barnier went around brandishing this graph.

You'll remember it with a staircase showing that the only option if we were leaving was toe have a straightforward Canada style trade deal.

Of course, the moment that Boris took him at his word and said, All right, that's what we'll do.

The offer was snatched away and all sorts of last minute problems were put in the way.

And that's why I think, really the question is whether the you can accept the fact emotionally as well as technically a Frexit.

Yeah, I hear that.

I mean, I think Canada is, you know, is a bit of a red herring because it doesn't include financial services there.

It doesn't have a border with the EU.

Trades approximately.

I don't know 1/10 of what we do with the EU.

But do you accept that, Philip, that there is this sort of punishment element?

Do you hear any of that?

There's always been true, I think, from the off that the EU member states and you concerned that it didn't look as though the UK could get a better deal outside of the EU than it had as a member state on.

Of course, that's been part of it.

But the sort of deal that the UK is seeking, even this relatively thing trade deal that we're after now does, of course, in many respects go beyond what has been on offer to other countries in particular.

On notably, it would be tariff on quota free on.

That's why the EU is concerned about the relative competitive advantage that UK businesses that might take if the rules in the UK are allowed Thio lapse or to get fall much below the standards that pertain in the U.

Well, if it is so relatively thin as a trade deal, as you as you say, then would it be so much worse to go to no deal and to let the sides realized what had happened and then, you know, meet each other at a point where there was the appetite for a deal again.

Well, there are two issues in that one is no deal worse than a deal.

Absolutely.

It is tariff supply and would have a really big impact on some important sectors, like agri food on automotive.

Don't forget, if we don't get a trade deal, all the other elements of the relationship fall away like internal security.

Short term disruption at the border in an ideal context is likely to be a lot worse on.

We have to remember also the impact within the UK itself.

Important elections coming up in Scotland next year.

No deal, a no deal outcome would be very much grist to a nationalist mill.

But in the context of a no deal, it is unlikely that negotiations would resume anytime soon.

There'll be a lot of bad blood, a lot of bad temper.

Political pride would kick in.

It would be difficult to get back around the table down.

What would you say to those in your party who openly said they would actually prefer no deal?

Are they wrong?

Yes, of course.

They're wrong.

It's much better.

It must be better toe.

Have a deal with our immediate neighbors.

Who are our suppliers, our customers and our friends.

Andi.

Our allies.

But you know, I just I am constantly bewildered by hearing that we heard it just just now.

This idea that country's somehow trade with each other out of kindness that you know having a zero terrorist regime somehow a favor to somebody else rather than a favor to yourself and your own consumers.

You know where we are negotiating zero tariff trade deals with Australia and New Zealand at the moment, no one's suggesting that the needs to be Anel Ament of kind of oversight of each other's regulations in order to do that and The reason we're doing it is not just because we like the Australians.

It's because it's good for both of us.

The EU is not right but I think that attitude in the way that it does to everyone.

But isn't that the crux of it that actually the more we talk about sovereignty, the Mauritz sounds like we can't give up any of our power that is needed to do any bilateral trade deal.

I mean, that's that's what you have to do.

You have to invest in trust with another side.

But that is emphatically Emily, not what we're doing, because when after the rejection of the Salzburg terms, when we were told Look, if you want to leave, it's gotta be on the on the simple Canada type deals way only looked at extent deals that the EU has already done with South Korea with Japan with Canada, we did not ask for things that went beyond them on DSO.

We're not asking for anything unprecedented.

Three.

You isn't claiming that we're asking for something so unusual that it needs toe have sovereignty, that their argument bizarrely is that they need to have some oversight over our standards because we're nearby, which is Do you want to come back on that?

What is the answer that eso being nearby actually does matter in trade terms on if you look at the volume of trade, as you mentioned earlier on between the U.

K on the E.

U is very much greater than the volume of trade between the EU and Japan and Australia and all the rest of it.

Andi.

It's 43 44% of U K trade in both export in both goods and services.

With the U.

We are a very major trading partner on their doorstep.

And that is why they have these concerns that it isn't the end of day master of sentiment.

From their perspective, I think it is about concerns about protecting the integrity of the single market.

And that's why they're putting these conditions in place.

When I just ask you to step back for a second.

When you look at where we are 4.5 years on with either a relatively thin trade deal or perhaps no deal, it all is that what you on Brexit is were dreaming off?

Is this what it was all about?

Well, I mean, you'll know that during before, during and after the referendum I argued for something much mawr along the lines of what the Swiss ended up with a neft er deal that sadly was shot down by both sides.

In the aftermath of the referendum.

There was a kind of polarization and quickly emerged.

There wasn't much support for that.

But I have to say, looking at the way in which the EU has conducted these latest I wonder whether even that would have been on offer without also wanting us in the common fisheries policy, wanting to the customs union on a bunch of extra ad.

That's imponderable, isn't it?

But thank you both very much.

Thanks for joining us tonight.