So. Fascinating 'come on' to Brussels from @JGForsyth in his Times column today...saying a deal is within "touching distance".

That's optimistic (on substance) but interesting to see UK pushing for a 'tunnel' - and "pitch-rolling" to backbenches 1/ https://www.thetimes.co.uk/article/a-brexit-deal-is-within-touching-distance-87wczflz6

So first the 'come on' - Per UK side to JG "we really need to begin the intensive talks to resolve the final tricky issues."

There is talk of an October 'tunnel' before EUCO - but ONLY if UK a) UK restores trust after law-breaking threats & b) and landing zone is in sight /2

So on the 'trust' front there are signs that UK realises that it totally overcooked it - but "the gun remains on the table". So before a tunnel something still needs to be done on that - like agree that the over-write "notwithstanding clauses" fall in ping-pong. /3

Whether private assurances are enough on this, it is not clear.

One of the big problems with the UKIM move is that it has fatally raised questions about whether the UK's word - @BorisJohnson word - is still the UK's bond.

Our word is our bond - until it's not. /4

But then onto the substance. @MichelBarnier has always resisted 'tunnels' - those leak-free intensive phases of talks - unless a landing zone for a deal is really in sight. Which begs a question: is a deal really "in touching distance"? That's trickier, I think /5

Leave aside fish for a second (since some can-kick can probably be devised for this) the big issue remains governance (even more important given law-breaking fiasco) and the philosophical aspects of level-playing field (and subsidy/state aid). These are a real problem. /6

I've tried to set out the issue here in @FT Brexit Briefing, but it comes down to fundamentally divergent vision of what is an acceptable price for a zero tariff/quota FTA - albeit a super-skinny one. EU and UK are on different paths, even planets /7

https://www.ft.com/content/fed5003b-703e-4c26-a6de-226ba32f746c

The EU market access offer is very poor, in UK view (on services, on rules of origin etc) so there is no way this - justifies the EU approach which is mandates to @MichelBarnier - and which France's @CBeaune reiterated again in @FT today with @VJMallet /8
https://www.ft.com/content/d8d6d3b9-e02f-4685-9935-918776202fbd

The question now is whether this gap can be bridged - and it is one of substance, not semantics.

Can the UK accept the "shared philosophy" on subsidy/level-playing field - and a binding regulator - that it feels is totally not justified? OR can the EU accept it needs to move? /9

As @JGForsyth points out - and here I think we come to the most interesting line in his piece - No 10 has been very "philosophical" on this point to date, but Forsyth hints, I think at a new line of argument emerging that might justify a UK climbdown...../10

It is this sentence on No 10's "no constraints of any kind" policy:

"There is, though, a case for choosing to fight some of these battles later;"

That sounds to me like the argument for a tactical retreat..../11

Whether or not this view is shared by the Cummings/Johnson/Frost combine is not clear - a UK concessions list has yet to be finalised - and it is worth recalling that @JGForsyth immediately pointed the folly of the UKIM plan, and that Art. 16 of NI Protocol offered protection/12

Which is to say the more pragmatic approach (which to be clear, applies to both sides) did not win out when inner cabinet met to decide on the "nuclear" option of the UK Internal Market bill. Sunak/Gove/Raab all went along. Perhaps they'll carry the day this time? /13

We really are entering crunch time now - next week will be key, I think, in determining if we can get to a tunnel situation ahead of Oct 15 EUCO. If we do, then 'game on'. If we don't, it's not 'game over' but it all get harder /14

I still believe - per the rationale of 'get something now, leave room to manage divergence later' - that a deal is manifestly in the interests of both sides.

But that doesn't necessarily mean we'll get one.

Trust is low, which creates demands for legal certainty. /15

We are not in Oct 2019, where one issue (N.Ireland) needed fixing with a relatively 'off the shelf' NI-only backstop solution - on which the UK is now threatening to renege. This is about laying foundations for a long term future relationship/16

As @JGForsyth points out, there is a world where both sides decide that it can better pursue it objectives/defend its interests via a 'no deal' - even one that creates space for a *real* Canada-style FTA, with tariffs n quotas etc.

But the political risks of that are huge /17

We need a deal. Both sides do - and now more than ever with #COVID19 - but a philosophical divide must be bridged in order to get there.

The fear is that "outbreak of reality" - as @JGForsyth puts it - still means very different things to the two sides. ENDS