British Prime Minister Theresa May will present a new plan to facilitate post-Brexit trade with the EU to cabinet, aides said today, the day before the key meeting.
But the customs plan immediately ran into trouble, with Brexit Secretary David Davis reportedly telling the prime minister the proposal was “unworkable” and would not be accepted by the EU.
Details of the new so-called “facilitated customs arrangement” are still lacking, but it includes elements from two existing customs plans — both of which have been rejected by Brussels.
“It is the best of both worlds — it allows for frictionless trade with the EU and the freedom to set our own tariffs,” a government source said.
In the meeting tomorrow, May will seek to finally unite her divided ministers behind a post-Brexit trade plan after two years of balancing factions in her Conservative party.
One previous “maximum facilitation” option would see technology and trusted trader schemes used to reduce the need for border checks on goods travelling between the EU and Britain.
Under an alternative “customs partnership” model, Britain would agree to collect EU tariffs on goods coming in from outside the bloc, meaning its own goods could pass freely to the EU.
But to allow Britain to strike its own trade deals with non-EU countries, involving lower duties, goods coming in destined only for Britain would be given a refund.
The source said the new plan would use technology and trusted trader schemes to determine where the goods ended up and charge them the right duties.
On regulations, which would also need to be standardised to avoid border checks, it is believed that Britain would mirror the EU’s rules on goods. However, the source said that any new EU rules would not be adopted automatically, but would need to be agreed by the British parliament.
Downing Street is reportedly confident the plan has the backing of businesses, but it has faced opposition from eurosceptics.
Former minister Owen Paterson said it would see Britain “remaining in the (EU’s) customs union in all but name”, and replicate elements of the single market — both institutions May has pledged to leave.
“We cannot deliver any of the economic benefits of Brexit without leaving the customs union cleanly and completely, freeing ourselves to forge our own trade relationships with friends and allies across the world,” Paterson said.