Michel Barnier says leaving EU customs union will harm trade

Michel Barnier with Brexit Secretary David Davis at 10 Downing Street. Picture: Stefan Rousseau/PA Wire

Quitting the customs union will leave Britain facing “unavoidable” barriers to trade, the EU’s chief Brexit negotiator warned after meetings with Theresa May and David Davis.

After talks in No 10, Michel Barnier said the UK must provide more clarity on what it wants in the next stage of the process.

Downing Street has ruled out remaining in a customs union with the EU after Brexit, and Mr Davis insisted Britain’s position is “perfectly clear”. But Mr Barnier told the UK the “time has come to make a choice” about what it wants for a two-year post-Brexit transition and its future relationship with the EU.

“The conditions are very clear, everyone has to play by the same rules during this transition,” he said. “The certainty about this transition will only come with the ratification of the withdrawal agreement.”

He added: “Our future partnership between the UK and EU, on that point we need also clarity about the UK proposals for future partnership.”

Mr Barnier said: “The only thing I can say, without a customs union and outside the single market barriers to trade on goods and services are unavoidable. The time has come to make a choice.”

Mr Davis said the UK wanted a comprehensive free trade agreement while still having the opportunity to make deals across the rest of the world.

“It’s perfectly clear what we want to do. There’s no doubt about it, we are leaving the customs union but we are aiming for a good future for Britain.”

Business leaders have urged the government to remain in a customs union, and Tory backbencher Anna Soubry urged Number 10 to “do the maths” and listen to company bosses.

She claimed the “hard Brexit” European Research Group (ERG) of Tory MPs, led by Jacob Rees-Mogg, had a “deeply unattractive” plan which involved leaving the customs union “to chase unicorn trade deals” at the expense of existing relations with the EU.

The Brexit Secretary said the talks, which Mrs May dropped in on, had been “very constructive” and the next round would focus on the implementation period. An “intense” period of negotiations will begin straight away and the government is “confident” of securing an agreement at the next meeting of EU leaders in March, he said. Mrs May’s Brexit “war cabinet” is due to meet toorrow and Thursday to continue discussions on the “end state” relationship which the UK will seek with the EU.

The PM’s official spokesman said: “We have said that we want the customs arrangement to be as frictionless as possible and that’s what we will be looking to achieve as part of the deep and special partnership that we are seeking with the EU.”