1/ The EU has agreed to water down its demands for 'cross retaliation' clauses as part of the governance talks. Michel Barnier has accepted that police and judicial cooperation should be exempt from the cross-retaliatory tools in any post-Brexit trade and security deal.
2/ The UK is pushing back against EU plans for an extensive dispute settlement clause that would allow for 'cross suspension' across the Brexit deal, for example a row over fisheries could see tariffs slapped on cars if arbitration fails.
3/ British negotiators have accepted the dispute settlement for goods and services, but not the level-playing field and fisheries, according to EU sources. The EU wants fish, energy, goods, services, road & air transport and the LPF covered by the mechanism.
4/ However, progress is being made. There is a joint text being drawn up. But it's still described as a 'serious problem' by EU sources close to the talks. 'The UK has refused a dispute settlement mechanism that is robust and obligatory for all areas,' one said.

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More from @Barnes_Joe

24 Sep
1: Ahead of the ninth formal round of Brexit trade talks in Brussels, there is a sense of cautious optimism a deal can still be found. Michel Barnier, while saying the UK's Internal Market Bill is 'unhelpful', has claimed the legislation created an 'opening', a source says.
2: Even after a few turbulent weeks, technical-level negotiations are said to be progressing well. Barnier earlier this week briefed EU27 ministers, saying there is now a 'much more open atmosphere at the negotiating table', another source says.
3: As a result, the public rhetoric from both sides has been dialled down. After talks in Brussels last week, the UK acknowledged there was no threat of a food blockade. The EU has softened its words when it comes to legal action for breaches of the Withdrawal Agreement.
Read 10 tweets
3 Sep
Germany's agriculture minister Julia Klockner showed no sign that EU member states are ready to soften their demands for access to UK coastal waters.

'For fisheries, we want to ensure we have at least the status quo,' she told the EU Parliament's fisheries committee.
The Brexit row over fisheries is 'a real sticking point in the conclusion of any agreement' between the UK and EU, Ms Klockner said.

She added: 'There is a clear link between a general free-trade agreement and a specific fisheries agreement. We cannot separate the two.'
The PM's spox: ‘We’ve been clear from the outside that once we leave the EU we will once again become an independent coastal state and it will be for us to determine who fishes in the UK’s waters...
Read 4 tweets
5 Jun
1/ Don't expect white smoke from Michel Barnier and David Frost when they wrap up the fourth round of Brexit talks this afternoon. Still gaps in both sides' fundamental positions – governance, level-playing field and fisheries. But this doesn't mean talks are not moving forward.
2/ Neither side expected there to be a breakthrough this week. EU sources say it's far too early for a compromise, that comes later with the added time pressure of the expiration of the transition period at the end of the year.
3/ Talks have been more useful and constructive this week. The UK and EU have moved on from simply explaining their positions to discussing more technical and minor details – not to be confused with a move toward the middle ground by either side, but actual progress.
Read 13 tweets
28 May
1/ Michel Barnier offered a downbeat assessment of the post-Brexit trade talks to the EU Parliament's Conference of Presidents today. Barnier repeated, almost word-for-word, the letter he sent to opposition MPs in Westminster – confirmed the EU's support for a two-year delay.
2/ Barnier told senior MEPs that regulatory alignment – the level-playing field – and fisheries remain the most 'divisive issues', a source in the room tells me. More interestingly, Barnier seems confident that a fisheries agreement is the easier of the two to do a deal on.
3/ The reluctance of David Frost, the PM's chief negotiator, to engage on the EU's level-playing field proposals has led Barnier to believe the UK is ready to accept no deal and trade tariffs in order to have full regulatory independence, the source adds.
Read 5 tweets
26 May
1/ Chief negotiators David Frost and Michel Barnier are due to speak on the phone tomorrow to tee up the next week's round trade talks. Despite a recent tetchy exchange of letters, chances of a deal aren't as distant as they seem – with even a fisheries compromise in sight.
2/ Access to Britain's fishing waters has been a particular flashpoint in the process. Downing Street has argued the EU is simply trying to continue the Common Fisheries Policy with Barnier's request to 'uphold' the status quo.
3/ Barnier described this as a 'maximalist' position after the last round of talks, adding he and Frost actually agreed to move onto 'specific parameters' – like with most fudges, you can reach the outcome both sides desire and then establish how it fits between red lines.
Read 9 tweets
15 May
After the third round of UK-EU trade talks, Michel Barnier also says talks were once again 'disappointing'. There wasn't any progress on fisheries and the regulatory playing field.
Barnier: 'We remain determined to continue to work together to build an ambitious partnership with the UK.' Followed by another moan about Boris Johnson's intention not to extend the post-Brexit transition period.
Interestingly, Barnier says UK would need to extend the transition for years under Michael Gove's plan for a line-by-line negotiation on tariffs in order to avoid the EU's level playing field demands.
Read 5 tweets

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