New: the European Parliament's announcement that it will not ratify any treaty before the end of December unless the deal is concluded by midnight on Sunday comes amid signals that, despite progress, a deal won't be concluded until early next week.

After Michel Barnier's briefing of EU ambassadors this afternoon, here's where things stand:

2/ There is a basic deadline of Christmas Eve to get a deal. That will give the EU's legal services time to draw up a letter to send to the UK seeking provisional application of the treaty from Jan 1

3/ It's understood officials will need four days at a minimum to draft a letter seeking provisional application of the treaty (all this is on the basis that it is pretty much too late for the European Parliament to ratify the treaty on time for Jan 1)

4/ On the prospects for a deal: diplomats say they're not ruling out a deal by Christmas eve. Michel Barnier said there had been significant progress. Member states expect to convene a meeting of the Working Party (of Brexit coordinators) every day (except Christmas Day)

5/ Acc to one diplomat Barnier will publish the text once/if it's agreed, but before it's been legally scrubbed. Member states can approve the text via written procedure (sending a formal letter) as there are no Council meetings foreseen to do it in person between now and Dec 31

Some compelling evidence at the NI Affairs Committee this morning on Brexit, the risks of smuggling, organised crime, the "soft underbelly" of the Irish border, the loss of the European Arrest Warrant and what might replace it

2/ Giving evidence were Simon Byrne, chief constable of the PSNI, Mark McEwan, assistant chief constable, Steve Rodhouse, of the UK National Crime Agency, and Steve Tracey, of HMRC. Here's the gist of what I've just filed for @rtenews online:

3/ A UK law officer has raised the prospect of intl organised criminals trafficking drugs, people + firearms into the UK via Ireland because of tighter controls at GB ports thanks to Brexit. He also suggested that Ireland may have to tighten security at its ports accordingly.

4/ Steve Rodhouse, DG of Operations with the UK National Crime Agency, said organised criminals would be making a “fundamental choice” as to whether they continue to traffic drugs, people and firearms into the UK via English ports...

5/ ...or whether they might decide to switch routes into the UK through Northern Ireland via the Irish Republic.
Mr Rodhouse told a House of Commons committee that such trafficking was already underway through what could be termed the “soft underbelly” of the Irish border.

NEW: Michel Barnier has told EU member states there has been some movement on the level playing field, and on dispute resolution, but that fisheries talks remain "very difficult" @rtenews understands. Sources say this could go through this week and beyond...

2/ Acc to one senior source, Barnier said there was acceptance that the EU could take retaliatory measures against the UK if it diverged from EU standards but that it would not be "autonomous", in other words, before taking action there wd need to be some dialogue with the UK

3/ "It's the operationalisation of that principle that is now under discussion," acc to source. The EU see this is progress as for a long time the UK refused to accept that if they diverged the EU had a right to do something, says the source

4/ "That principle has now been accepted, but how it is implemented is the nub of the dicussion."

5/ From the EU perspective the concern is the UK might change its rules to make it more competitive, says the source. "Barnier seemed positive that the principle of couter-measures had been agreed."

BREAKING: The EU and UK have agreed a trusted trader scheme that would mean exemptions from tariffs for up to 98pc of goods flowing between Great Britain and Northern Ireland from January 1, @rtenews has learned.
The other 2% wd potentially avail of rebates from any tariffs.

2/ Tariffs would mostly only apply if no free trade agreement is concluded between the EU and UK.

Both sides have also agreed that agrifood products coming from GB to Northern Ireland will be exempt from requiring export health certificates for a period of at least three months

3/ These have proved the biggest concern for UK supermarket chains in NI, who rely on large and mixed consignments of food coming from GB depots.
Export health certificates can cost up to £200 per product and need to be signed off by a designated veterinary inspector.

4/ It’s understood the issue of how supermkts will comply with EU food safety rules could be dealt with through a UK commitment - possibly a declaration - that it does not intend to change its food safety rules from Jan 1. At that point the rules will be the same as the EU's.

5/ The trusted trade scheme would be subject to a review, or sunset clause, three and a half years after the Protocol comes into effect, according to an internal EU briefing

1/ Quick thread. At the end of the third week of Brexit being "done", I can only say that I'm exhausted.

Immediate pressures on companies who have been trading goods have been on grappling with all of the new customs and regulatory requirements.

2/ It's clear that agrifood businesses have been the hardest hit due to the SPS checks and other requirements.

But for others, the shift from a distributor model to importer/exporter has been a challenge. This hasn't been helped by certain IT system not working as planned.

3/ So are these "teething problems"? Companies are grappling with the new systems & formalities.

Some are, but many others aren't.

Worth noting that freight volumes are still below average. But stockpiles are running low, coming weeks are going to be interesting.

4/ Two issues that are immediately facing many businesses that won't be addressed by sorting this teething period.

First, many businesses are facing the largest shift in their cost base in a generation.

5/ This comes from the cost of dealing with the customs procedures, upgrading IT systems to manage the new requirements, setting up European operating centres to comply with regulatory requirements, new immigration costs, the list goes on.

Brexit. A Eurovision Negotiating Contest. How are the contestants doing? To read the UK press you’d be forgiven for being ... completely misinformed. We’re lurching into a crisis on a scale not seen since at least 1956 & probably 1945. Here’s what’s really going on. A thread./1.

For a number of key journalists, their only job is to take dictation from the 10 Downing Street spokesman & give it to the Times, Telegraph or Spectator for publishing. This is part of a therapy effort for the small minority of the population who read those publications & .../2.

... would otherwise be confused by being confronted with the reality of the world around them. The articles are interesting for two reasons:

⁃They tell you precisely what 10 Downing Street currently wants those readers, which include other journalists, to hear. /3.

⁃Looking at their detailed content, such as it is, shows just how possible a “deal” quite obviously is & how nonsensical a “no deal” would be. They also (if you’re familiar with a bit of background, which you surely are) highlight just how bad a “deal” of the sort .../4.

... the government envisages - a massive climb down from the UK’s extraordinarily privileged position in the EU’s customs union & single market - would be for the UK. And how a “no deal” would be even worse - substantially so - than such a (really awful) “deal”. /5.

🚨🚨🚨🇪🇺🇬🇧🚛🚒🇪🇺🇬🇧🚨🚨🚨 serious #brexit story alert - companies now starting to see penny drop on what rules of origin does to supply chains (food for example) but Brussels seems deaf to both EU & U.K. pleading. A bellwether? 😬 Stay with me. 1/


So first the problem: its a tad complicated but basically goods that are imported into UK and then 'hubbed' onwards into Ireland or other parts of the EU are facing full EU tariffs - this is particularly bad for food stuffs, which attract high tariffs. Why is this? /2

It's a function of the Rules of Origin clauses that mean that goods have to sufficiently "originate" in the UK to qualify for zero-tariff entry to EU (and vice versa).

But to qualify, you have to do something to the goods - process them or add value - not just punt them on /3

The brilliant @AnnaJerzewska does a better job than me of explaining, but the important thing is that this is a nightmare for companies that 'hub' /distribute products through the UK - and that's both EU and UK companies /4

So both the @Foodanddrinkfed and EU groups like @CAOBISCO_EU (chocs etc) say they want the EU Commission to fix this with a derogation/waiver that takes into account proximity and interdependence of EU/UK supply chains. /5

1/ Lots of good analysis out there on why the EU-China CAI is a bad decision in the context of Xinjiang, transatlantic partnerships, etc. But I also think that even the trade/econ benefits of the CAI look quite limited. Thread:

2/ It highlights, as a win, that China’s preservation of existing liberalizations. That’s positive, but not really a big problem; the bigger issue is stagnation, where reform pledges have failed to materialize after years/decades of promises. Great example is in the FDI openings,

3/ which are highlighted to include cloud, auto, fin services etc—all areas of EU/MNC interest. Thing is, these openings aren’t new. China has begun opening auto/finance since 2018/19, while the 50% cap on cloud services has remained unchanged since 2015 (or before if we consider

4/ WTO ascension commitments vs the 2015 Telecom Catalogue, but that’s for another day). So these are existing openings that are repackaged as “wins.” More critical issue beyond FDI caps is around licensing issuance, which still big problem. Arguably some more significance in

5/ R&D and health? Not an expert, but the FDI conditions (eg hospitals only in certain cities) are limiting, while R&D could be complicated by data/info controls. It’s also unclear how existing tech transfer prohibitions exceed existing protections in the foreign investment law,