The UK has set out the “ambitious new customs arrangement” it wants to secure with the EU after Brexit.
Ministers said the plans would mean the “freest and most frictionless possible trade” with the rest of Europe.
This could include a “temporary customs union” after Brexit to prevent border problems as the UK leaves the EU.
Businesses have called for clarity since the UK said it was leaving the customs union – the EU’s tariff-free trading area – as part of Brexit.
Countries in the customs union don’t impose tariffs (taxes on imports) on each other’s goods.
Members also agree to impose the same external tariffs on goods from other countries.
So, for example, a 10% tariff is imposed on some cars imported from outside the customs union, while 7.5% is imposed on roasted coffee.
Other goods – such as soap or slate – have no tariffs.
The UK’s departure from the EU’s customs union was confirmed at the weekend a joint article by Chancellor Philip Hammond and Trade Secretary Liam Fox.
According to the newly-published government paper, the UK could ask Brussels to establish a “temporary customs union” after it leaves the EU in March 2019.
But during this period, it would also expect to be able to negotiate its own international trade deals – something it cannot do as an EU customs union member.
Once this period expires, the UK will look to agree either a “highly streamlined” border with the EU, or a new “partnership” with no customs border at all.
The government said the interim arrangements would mean businesses would only have to adjust once to the new arrangements.
All of this will have to be negotiated with the EU – and the two sides have not yet even started discussing trade matters.
Other obstacles – including the size of the UK’s “divorce bill” – need to be agreed first.