Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team UK sets out ‘innovative’ Brexit customs plan… The government says it will propose an “innovative and untested approach” to customs checks as part of its Brexit negotiations.The model, one of two being put forward in a newly-published paper, would mean no customs checks at UK-EU borders. The UK’s alternative proposal – a more efficient system of border checks – would involve “an increase in administration”, it admits. A key EU figure said the idea of “invisible borders” was a “fantasy”. On Twitter, Guy Verhofstadt, the European Parliament’s negotiator, added that other issues had to be agreed before negotiations on trade could begin – views echoed by the EU’s overall chief negotiator, Michel Barnier. – BBC The U.K. will propose a bespoke, temporary customs union with the EU during an “interim period” after Brexit, the British government said ahead of the publication of the first in a series of new papers outlining the U.K.’s negotiating position. Under the proposals, Britain would leave the existing EU customs union, but would maintain a “close association” for a limited period in order to give both sides time to put in place new border checks and infrastructure. A new formal customs union with the EU is one of the options for the transition, the position paper says. – Politico > Hugh Bennett on BrexitCentral: A healthy dose of ambition and innovation for UK trade after Brexit …as the EU says the plan is an effort to leapfrog ‘divorce’ proceedings… The EU flatly rebuffed the U.K.’s first formal proposal on a post-Brexit trading relationship, saying a new position paper released by London was an effort to leapfrog divorce proceedings. In its response, Brussels noted that withdrawal terms must be settled first — a position they believe is strongly supported by Article 50, the brief provision in the EU treaty that sets the parameters for a nation’s withdrawal from the bloc. “We take note of the U.K.’s request for an implementing period and its preferences as regards the future relationship, but we will only address them once we have made sufficient progress on the terms of the orderly withdrawal,” the EU said in a statement. “An agreement on a future relationship between the EU and the UK can only be finalized once the U.K. has become a third country.” The EU also rejected the U.K.’s attempted assertion that future trade might be as easy and efficient as it is now, as a member of the bloc … Overall, the EU said it welcomed the first in a series of papers intended to lay out the U.K.’s negotiating position, which many in Brussels have viewed as a mystery. – Politico Barnier snubs Britain’s proposal on Brexit customs – Express …and a former Commissioner claims the EU is likely to block Britain’s temporary customs union plan The EU is likely to block Britain’s plea for a temporary customs union to prevent Brexit border chaos if it also demands the right to seek other trade deals, a former Commissioner has warned. Karel De Gucht described the plans being put forward today by the Government as “very problematic” and at odds with Brussels’ ideas for a transitional period. The Belgian, who was European Commissioner for Trade between 2010 and 2014, suggested the EU would accept the status quo on customs for several years only its terms. – Independent David Davis set to clash with EU after insisting UK will sign trade deals while remaining in a customs union – Independent UK business could face ‘huge new bureaucratic burdens’ after leaving the EU due to new customs union plan – Independent Dublin welcomes ‘more clarity’ from UK on Brexit plans The Government has said it welcomed indications that the United Kingdom was “providing more clarity on its thinking” on Brexit, adding that this had been called for by Taoiseach Leo Varadkar and Minister for Foreign Affairs Simon Coveney. In a statement, the Government said the UK’s position paper on future EU-UK customs arrangements would be analysed in detail along with Ireland’s EU partners. According to excerpts of the position paper, the British government will say one option to minimise friction when it leaves the European Union in March 2019 would be to introduce a temporary customs union which should be “time-limited”. – Irish Times EU could block trade deals for three years after Brexit… Philip Hammond, the chancellor, has won a cabinet battle for a business-friendly Brexit transition that could leave Britain unable to strike free-trade deals for years after it has left the European Union. Liam Fox, the trade secretary, wanted to be able to sign deals with non-EU countries straight after Brexit in March 2019. Dr Fox and Boris Johnson, the foreign secretary, were unhappy with recent statements by the chancellor that suggested a lengthy transition when little would change. However, David Davis, the Brexit secretary, will signal today that Mr Hammond has the upper hand by announcing plans for the present customs arrangements to stay in place for an “interim period” that could last for up to three years – The Times (£) … as Britain threatens to impose red tape on EU imports with no Brexit deal Britain is threatening to introduce new laws to impose VAT and customs duties on all goods from the European Union if no Brexit deal can be agreed, the Government said today. MPs and peers will legislate to impose new custom duties and VAT tariffs on trade with the EU in case no deal can be agreed by March 2019. A detailed 14 page blueprint entitled Future Customs Arrangements for the UK also disclosed that Whitehall officials are in a race against time to get up to date customs computer ready for Brexit. Ministers will publish a Customs Bill and Trade Bill to bring in UK law EU trading rules. The document made clear that without any deal “the UK would treat trade with the EU as it currently treats trade with non-EU countries. – Telegraph (£) Britain threatens EU with mountain of new red tape if they fail to give us a good customs deal – The Sun David Davis refuses to rule out UK paying to strike trade deals with non-EU nations Britain could pay for the privilege of striking trade deals while remaining in a temporary customs union with the EU, David Davis signalled today. The Brexit Secretary said Britain wants to be able to sign off deals with other countries while still trading freely with EU nations for up to two years. The suggestion has been described as a “political problem” for the EU by a former European trade commissioner. Speculation is mounting that Mr Davis’s proposal will hit the UK with a significant bill. In a string of media interviews, the senior Tory said he would not discuss negotiations “on air” but failed to rule out that there would be a price to pay for maintaining Britain’s place in a temporary customs union. – Evening Standard British business to lobby Brussels on Brexit transition deal U.K. businesses want the Brexit negotiations to speed up, and they plan to push the EU side of the talks to make that happen. According to a senior U.K. business figure familiar with thinking among British CEOs, the sector believes that the EU’s rigid approach to “phasing” the Brexit talks could mean that a job-saving transition deal will come too late. The business leader said U.K. firms plan to lobby Brussels to drop its approach in the hopes of accelerating a transitional deal. – Politico Temporary customs union: a simple guide to the Government’s Brexit plan For many than 40 years goods have flowed backwards and forwards between Britain and the EU (including over the border between Northern Ireland and the Republic) without attracting tariffs. Selling pharmaceuticals or telecoms equipment to France or importing cars from Germany has been relatively free of red tape for companies either side of the Channel because of the EU customs union. So what happens when Brexit takes place? That is the question addressed by this new government paper. Ministers are proposing an interim deal under which Britain would enter a temporary customs union with the EU. – i News UK will ‘mirror’ much of EU customs system for Brexit, plans reveal Britain expects to “mirror” much of the existing EU customs system both during and after Brexit, according to government plans that could prevent Liam Fox from immediately implementing new trade deals.This first detailed look at Whitehall’s negotiating strategy also reveals new reporting requirements for businesses as a way to minimise delays at international borders and avoid the need to build extra physical infrastructure. David Davis, the Brexit secretary, said the approach would avoid a “cliff-edge for businesses and individuals”, but Guy Verhofstadt, the European parliament’s Brexit coordinator, immediately poured cold water on the proposals, describing them as a “fantasy”. – Guardian UK hopes to strike new trade deals during transitional period Ministers hope to negotiate and complete trade deals with other countries during any Brexit transitional period, a Government document has said. Brexit Secretary David Davis revealed future customs proposals, including an interim customs union with the EU aimed at avoiding a “cliff-edge” for manufacturers after Brexit. He told Sky News that a temporary customs arrangement will be “in both sides’ interests” – and stressed any transitional period should not exceed two years. But his plan drew a cold reaction in Brussels, with one official calling it “fantasy”. – Sky News Tory transition plans only delay EU punishing UK, claim Lib Dems David Davis has been met with a stream of vitriol since bowing down to Chancellor Philip Hammond by publishing proposals today which will mean a three-year transitional customs arrangement instead of cutting ties with the EU as soon as the UK leaves the bloc in March 2019. Even the Lib Dems, who furiously opposed Brexit, have said a transition is a terrible idea – if the EU even agrees to it. The Lib Dems, headed up by Remainer Vince Cable, said the EU will still punish the UK, but it will just be delayed by three-years. – Express David Davis: The smooth and orderly route to a new customs arrangement Tomorrow marks the start of an intensification of our preparations for our exit from the EU. The government will publish a series of papers on the new deep and special partnership the UK wants to build with the EU. These papers set out key issues for the government’s approach to that partnership, developing the themes and framework we have already laid out. They draw on the engagement the government has sought from external parties with expertise on each policy area and are the result of the extensive work undertaken across government over the past year. – David Davis MP for City A.M. Andrew Lilico: Securing good customs arrangements should be easy – common sense will ensure that The government has published its Brexit position paper on customs arrangements. When we leave the EU there will need to be some new arrangements for clearing goods at the border as they enter the EU or come into the UK. Even if there is a new free trade agreement with the EU that means there are no new tariffs, that would still leave the issue of any goods that come into the UK from third countries (e.g. the US or Australia) with whom the EU has no trade deal or does not have a deal with exactly the same terms as the UK’s. Goods from, say, the US might not have tariffs to come into the UK but would have tariffs if then transited onwards to the EU. So the EU will need to verify that goods exported from the UK have actually originated in the UK, rather than from somewhere else. Customs clearance is also required to check relevant taxes have been paid. – Andrew Lilico for the Telegraph (£) Stephen Booth: An interim customs union is the first step towards getting Brexit right While the UK will leave the EU’s Customs Union in March 2019, a temporary UK-EU customs union, based on the legislation and procedures underpinning the existing customs union, would ensure that traders on both sides of the Channel – and everyone on the island of Ireland can carry on as before. This makes sense and provides time for the UK and its partners in the EU to implement the technology and infrastructure required to make the long-term regime work. The government’s position on the need for a smooth transition to a new UK-EU relationship has been well trailed and should also come as a relief – if not a surprise – to negotiators in Brussels. EU negotiators and businesses are loathe to negotiate and adjust to two sets of arrangements, one for the transition and one for the long term. – Stephen Booth for CapX Asa Bennett: By tempting Brussels on trade, David Davis hopes it will stop obsessing over the Brexit bill Britain is leaving the European Union in order, as Theresa May put it in January, to become a “great, global trading nation”, so it has been itching to talk how it would secure free trade with the bloc from the moment it began exit talks. But Brussels preferred to kick trade talks down the road, insisting that Britain had to satisfy it first with its readiness to agreed to its demands on issues like how much it will pay as a Brexit bill and how citizens’ rights would be protected. – Asa Bennett for the Telegraph Paul Goodman: Brexit, customs, implementation and new trade deals. May wants to have her cake and eat it – but not quite yet Is this a “victory” for Philip Hammond or Liam Fox in the Government’s internal dispute about how to manage Brexit? Both have had to give ground over time. The Chancellor’s concession of Britain being able to sign trade deals during the interim period was written up yesterday as a victory for Fox, in the wake of their joint Sunday Telegraph article of the weekend. But that the Government now envisages any such deal not coming into effect until a transition period ended is being written up today as a victory for Hammond. One of the weaknessness of coverage of the negotiation in our media is its close scrutiny of the British position – especially of “winners” and “losers” of Cabinet debate – combined with less engagement, or in some cases none at all, with that of our interlocuters. – Paul Goodman for ConservativeHome Aarti Shankar: The UK should opt for a customs facilitation agreement with the EU The UK government today released its paper on future UK-EU customs arrangements. Open Europe’s Aarti Shankar argues that plans for an interim deal are sensible, but, longer-term, the UK should opt for a customs facilitation agreement over a “mirroring” arrangement with the EU… Other questions remain unanswered on the transition. For instance, the paper makes no mention of how long the interim period is expected to last, although Brexit Secretary David Davis this morning stressed that it must be completed before the next election in 2022. – Aarti Shankar for OpenEurope