Brexit: Michel Barnier rules out Theresa May's Chequers customs plan

The European Commission’s chief negotiator has ruled out a key part of Theresa May’s Brexit customs plan, effectively killing her attempt to preserve frictionless trade.

Michel Barnier said the EU could not agree to let another country collect European customs duties on its behalf – a key principle of the British plan for the future relationship.

However, he said the bloc was open to having a customs union with Britain, a proposal which is also advocated by Labour.

“The EU cannot and the EU will not delegate the application of its customs policy, of its rules, VAT and excise duty collections to a non-member who would not be subject to the EU’s governance structures,” Mr Barnier said, after meeting Brexit secretary Dominic Raab in Brussels.

He added: “Any customs arrangements or customs union ... must respect this principle. A customs union, which would help to reduce friction at the border, would come with our common commercial policy for goods.”

The comments represent the first time Mr Barnier has definitively rejected the proposal in the UK’s white paper. Last week he subjected the policies to a series of intensive questions, but was careful not to definitively rule anything out – though he suggested they may not be legally feasible.

The proposal by the UK is a bid to remove the need for customs checks on goods travelling between the UK and EU, without committing to being a member of an actual customs union.

It would have seen British customs staff charge both British and EU tariffs on goods entering the UK, whichever was the highest, based on what the expected final destination of the good was.

It sits alongside a UK proposal to align itself with some of the EU’s single market rules, in order to remove the need for border checks on goods and preserve frictionless trade after Brexit.

The EU has also raised serious questions about that plan, suggesting it would give the UK a significant competitive advantage over Europe without any advantage for EU states.

Speaking on Thursday at the same press conference, Mr Barnier re-stated that the EU’s single market and its four freedoms were indivisible and could not be cherry-picked.

British and EU negotiators held meetings about the future relationship this week, as well as well as the remaining withdrawal agreement issues and the Northern Ireland “backstop”.

It is the so-called backstop that is causing the biggest risk of a no-deal Brexit, with the problem apparently intractable. Theresa May has said “no UK prime minister” could sign up to the EU’s plan to keep Northern Ireland in the customs union and single market in order to avoid a hard border in Ireland, while the EU has said the UK’s proposals do not go far enough to prevent a hard border.

The UK’s Mr Raab reiterated the British position that the backstop had to be “time limited”, a stipulation which the EU has also rejected, suggesting that would make it “no backstop at all”.

“With pragmatism on both sides I am confident we can find a way to resolve it into a workable solution,” Britain’s chief negotiator said.

“That will be easier to achieve if it is clear that the backstop, if it were to be exercised at all, could only be for a time-limited period before the permanent future arrangements would become operational.”

Ireland and the European parliament, who have vetoes on the final deal, have both said a withdrawal agreement without a backstop to prevent a hard border in Ireland would be of no use to them. The EU has said any backstop must be “all weather”.