LONDON (Reuters) - The European Union’s chief Brexit negotiator Michel Barnier told Britain on Monday that the time had come for Britain to make a choice on what sort of relationship it wanted with the bloc after Brexit.

Britain's Secretary of State for Exiting the European Union David Davis and the European Union's chief Brexit negotiator Michel Barnier speak inside 10 Downing Street, London February 5, 2018. REUTERS/Stefan Rousseau/Pool

Britain has ruled out staying in any customs union with the EU after Brexit, but the nature of its trading relationship with the world’s biggest trading bloc has split Theresa May’s government and Conservative Party.

Barnier, speaking after talks in Downing Street with Prime Minister May and Brexit Secretary David Davis, bluntly called on Britain to clarify how it saw the future relationship with the EU after it leaves on March 29, 2019.

“The only thing I can say: without a customs union and outside the single market, barriers to trade and goods and services are unavoidable,” Barnier told reporters in Downing Street. “Time has come to make a choice.”

“We need also clarity on the UK proposals for the future partnership,” Barnier said.

Britain, Davis said, wanted a comprehensive free trade agreement and a customs agreement to make trade as frictionless as possible while being free to strike free trade deals with swiftly growing countries across the world.

Davis said the talks with Barnier had been constructive and that he was confident Britain could get agreement on a time-limited transition period by the March economic council which is scheduled for March 13.

With little more than a year left before Britain’s March 2019 exit from the European Union, May’s party remains deeply divided over what sort of relationship should be built between the EU and the world’s sixth-largest economy.

Such are the divisions within May’s government, that the debate over the extent of Britain’s possible post-Brexit participation in an EU customs union has taken place in public with key ministers offering a range of views.

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

BREXIT TARIFFS?

Membership of the, or a, customs union after Brexit, would prevent London from striking trade deals with countries outside the EU in future.

While May has repeatedly said that Britain will leave the customs union, some ministers hope that Britain could remain in some sort of bespoke customs arrangement with the EU after Brexit.

May’s spokesman told reporters that Britain would leave the customs union and would not be a member of a customs union with the EU after Brexit.

“We are very keen that we continue to have an extremely good and close relationship, that relationship be on economic and other grounds, and that it will continue in long term,” Davis said.

“It’s perfectly clear what we want to do and there is no doubt about it,” Davis said.

Negative news around Brexit negotiations and surveys indicating a slowing British economy are sapping investor confidence in sterling GBP=D3, with it dipping 0.8 percent to $1.4005 on Monday, its lowest since Jan. 30.

A customs union means that its members apply the same tariff to goods imported into their territory from elsewhere and apply no tariffs to goods from other members. It also limits checks and other bureaucracies at borders between members.

Unless Britain negotiates a new trade deal with the EU, its exports would run into the union’s external tariffs, which average about 5 percent across all goods, including 10 percent for cars and over 200 percent on certain types of poultry.

But May is under pressure from eurosceptic members in her party to quit the trading arrangement because for them the key prize is chance to sign new trade deals with other nations such as the United States, China and India.

Slideshow (3 Images)

May will hold two cabinet meetings on Wednesday and Thursday at which she will try to heal the deep divisions among her ministers over the best way to leave the EU.

If no deal is reached by October of this year, many businesses fear Britain could face a disorderly exit that would weaken the West, disrupt the peace in Northern Ireland, imperil Britain’s $2.7 trillion (£2 trillion) economy and undermine London’s position as the only financial centre to rival New York.</s>EU chief negotiator Michel Barnier warns that Britain faces 'unavoidable' trade barriers after Brexit if it also quits the bloc's single market and customs union

LONDON, United Kingdom – EU chief negotiator Michel Barnier warned Monday, February 5, that Britain faced "unavoidable" trade barriers after Brexit if it also quits the bloc's single market and customs union, urging Prime Minister Theresa May to make her choice.

After talks with May and Brexit minister David Davis in London, Barnier repeated that the EU needed "clarity" on what they wanted from the future relationship.

"Without customs union and outside the single market, barriers to trade in goods and services are unavoidable," he said.

"Time has come to make a choice."

During a visit later to the European Banking Authority, which will relocate to Paris after Brexit, Barnier repeated his warning that financial services would be impacted.

"When the UK leaves the single market, the financial passport is gone," he tweeted, referring to the rights that allow London banks to offer services across the bloc.

May says Britain will leave the EU's single market and its customs union after Brexit, to ensure it takes back control of its laws and is free to strike new trade deals.

But critics warn her move will hit the British economy, and the subject is the cause of intense debate between pro-European and pro-Brexit factions in parliament.

As both sides up the pressure on the prime minister, senior ministers will hold two days of talks on Wednesday and Thursday (February 7 and 8) to try to thrash out a plan.

Brexit negotiations resume in Brussels on Tuesday, February 6, on a two-year transition period after Britain's withdrawal in March 2019, followed by the start of trade talks in April.

Barnier said he expected an official position from London on the future relationship "in the next few weeks".

The prime minister's 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 we are seeking with the EU.

"We think we can achieve that because it's in the interests of the UK and the European Union.

"As with all these matters, it's the beginning of a negotiation."

London and Brussels struck a preliminary deal on key separation issues in December, and this week begin technical talks on a transition period to smooth Britain's withdrawal.

Both sides agree that relations during that period should continue largely as they are now, with Britain maintaining trading ties in return for keeping up its budget contributions, but without having any say in making policy.

However, May risked upsetting Brussels last week by questioning the rights of EU citizens who arrive in Britain during that time.

"The conditions are clear, very clear. Everyone has to play by the same rules during this transition," Barnier said on Monday.

Having previously set a deadline for October to ratify any deal before Brexit day, he warned there was "not a moment to lose".

The prime minister has been under increasing pressure from pro-Brexit lawmakers in her Conservative party.

Many euroskeptic MPs were angered when finance minister Philip Hammond, who has warned of the impact of Brexit on jobs and growth, last month suggested the British and EU economies would move only "very modestly, apart".

The Sunday Times newspaper this weekend reported a fresh plot to remove the prime minister if she deviated from her plan to leave the customs union.

"She can only command a majority in parliament on her present policy," wrote lawmaker Bernard Jenkin in The Sunday Telegraph newspaper.

But pro-European Conservative MP Anna Soubry said the number of MPs who wanted a clean break was "35 tops" out of 650 in the House of Commons.

"PM says she wants 'frictionless' trade with EU. She's right and the only way to achieve that is being in #CustomsUnion," she tweeted. – Rappler.com</s>LONDON (Reuters) - The European Union’s chief Brexit negotiator Michel Barnier said on Monday that the time had come for Britain to make a choice on what sort of relationship it wanted with the bloc after Brexit.

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

Barnier said he wanted the United Kingdom to clarify its position on what the future relationship would be. Britain’s Brexit Secretary David Davis said he was confident he could get agreement on a transition by the March EU summit.</s>The European Union's chief Brexit negotiator Michel Barnier has told Britain the time has come for Britain to make a choice on what sort of relationship it wants with the bloc after Brexit.

Britain has ruled out staying in any customs union with the EU after Brexit, but the nature of its trading relationship with the world's biggest trading bloc has split Theresa May's government and Conservative Party.

Barnier, speaking on Monday after talks in Downing Street with Prime Minister May and Brexit Secretary David Davis, bluntly called on Britain to clarify how it saw the future relationship with the EU after it leaves on March 29, 2019.

"The only thing I can say: without a customs union and outside the single market, barriers to trade and goods and services are unavoidable," Barnier told reporters in Downing Street. "Time has come to make a choice."

"We need also clarity on the UK proposals for the future partnership," Barnier said.

Britain, Davis said, wanted a comprehensive free trade agreement and a customs agreement to make trade as frictionless as possible while being free to strike free trade deals with swiftly growing countries across the world.

Davis said the talks with Barnier had been constructive and that he was confident Britain could get agreement on a time-limited transition period by the March economic council which is scheduled for March 13.

With little more than a year left before Britain's March 2019 exit from the European Union, May's party remains deeply divided over what sort of relationship should be built between the EU and the world's sixth-largest economy.

Such are the divisions within May's government that the debate over the extent of Britain's possible post-Brexit participation in an EU customs union has taken place in public with key ministers offering a range of views.

"The conditions are clear: Everyone has to play by the same rules during this transition," Barnier said. "The certainty about the transition will only come with the ratification of the withdrawal agreement."

Membership of the, or a, customs union after Brexit, would prevent London from striking trade deals with countries outside the EU in future.

While May has repeatedly said that Britain will leave the customs union, some ministers hope that Britain could remain in some sort of bespoke customs arrangement with the EU after Brexit.

May's spokesman told reporters that Britain would leave the customs union and would not be a member of a customs union with the EU after Brexit.

"We are very keen that we continue to have an extremely good and close relationship, that relationship be on economic and other grounds, and that it will continue in long term," Davis said.

"It's perfectly clear what we want to do and there is no doubt about it," Davis said.</s>EU negotiator warns 'not a minute to lose' in Brexit talks

The EU's chief negotiator Michel Barnier stressed the urgency of Brexit talks ahead of a meeting with Prime Minister Theresa May on Monday, with her government still deeply divided on the negotiations.

Barnier will also meet the UK's Brexit minister David Davis ahead of talks between British and European Union officials in Brussels from Tuesday to Friday.

Reports in recent days that some government ministers will seek to keep Britain in a customs union with the EU in order to safeguard trade ties have raised tensions between pro-EU and pro-Brexit factions.

But ahead of Barnier's visit, May's spokesman said that Britain did not want to be in a customs union with the EU once it leaves the bloc.

"It is not the government's policy to be a member of the customs union or a customs union," he told a daily briefing on Monday, saying the two options were instead "a new customs partnership" or "a highly streamlined customs arrangement".

London and Brussels struck a preliminary deal on key Brexit issues in December but are yet to discuss the conditions for a post-Brexit transition period and future trade relations.</s>The European Union's chief negotiator told Britain on Monday that the time had come for Britain to make a choice on what sort of relationship it wanted with the bloc after

Britain has ruled out staying in any customs union with the EU after Brexit, but the nature of its trading relationship with the world's biggest trading bloc has split Theresa May's government and

Barnier, speaking after talks in Downing Street with Prime Minister May and Secretary David Davis, bluntly called on Britain to clarify how it saw the future relationship with the EU after it leaves on March 29, 2019.

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

"We need also clarity on the UK proposals for the future partnership," Barnier said.

Davis said he was confident he could get agreement on a transition period by the March

"Everyone has to play by the same rules during this transition," Barnier said. "The certainty about the transition will only come with the ratification of the withdrawal agreement."

With little more than a year left before Britain's March 2019 exit from the European Union, May's party remains deeply divided over what sort of relationship should be built between the EU and the world's sixth-largest

Such are the divisions within May's government, that the debate over the extent of Britain's possible post- participation in a EU customs union has taken place in public with key ministers offering a range of views.

Membership of the, or a, customs union after Brexit, would prevent London from striking trade deals with countries outside the EU in future.

"The key point, as the prime minister has said on many, many occasions, is that we need to have our own independent trade policy and be able to strike trade deals with the rest of the world," May's spokesman told reporters.

"We will be leaving the EU and the customs union and it is not government policy to be members of 'the' customs union or 'a' customs union."</s>EU chief negotiator Michel Barnier will meet British Prime Minister Theresa May in London on Monday, with tensions in her government over her Brexit strategy coming to a head.

Barnier will discuss the upcoming negotiations with the UK's Brexit minister David Davis ahead of talks between British and EU officials in Brussels from Tuesday to Friday.

London and Brussels struck a preliminary deal on key Brexit issues in December but are yet to discuss the conditions for a post-Brexit transition period and future trade relations.

Britain has said it wants to leave the European single market and customs union and retain strong economic ties with the EU, but May has yet to bring together her divided government to produce a final plan.

High-profile pro-Brexit ministers Boris Johnson and Michael Gove are later this week set for a cabinet meeting showdown with europhile ministers, led by finance minister Philip Hammond, as they battle to shape Britain's post-Brexit vision.

Johnson and Gove are ready to deliver an ultimatum to prevent May backtracking on plans to fully leave the customs union, according to the Sunday Times.

Brexit supporters within May's Conservative Party would be prepared to replace the premier with Johnson and install Gove as his deputy, with influential backbencher Jacob Rees-Mogg drafted in as finance minister, the newspaper reported.

Such a move would enrage the sizeable minority of pro-EU Tory MPs, raising the spectre of another general election.

The internal tensions exploded into public view last week when Rees-Mogg, who is the bookmaker's favourite to become the next party leader, accused Hammond's department of "fiddling the books" in providing gloomy forecasts of Brexit's economic impact.

Tory MP and Brexit supporter Bernard Jenkin wrote in the Sunday Telegraph that May "can only command a majority in parliament on her present policy," a thinly veiled threat that Brexiteers would be prepared to bring down her vulnerable government.

Pro-EU interior minister Amber Rudd hit back on Sunday, telling BBC's Andrew Marr: "I have a surprise for the Brexiteers, which is the committee that meets in order to help make these decisions is more united than they think."

Downing Street on Friday rejected a Financial Times report that ministers are privately considering a customs union deal for post-Brexit trade, which could hamper its ability to strike trade deals with the rest of the world.

In an interview in Shanghai with Bloomberg TV, International Trade Secretary Liam Fox ruled this out, saying: "We have to be outside of that to take advantage of those growing markets."

Britain voted to leave the European Union in a momentous referendum in June 2016 that revealed a bitterly divided nation, sparked a tumultuous period in British politics and caused global shockwaves.

Although Britain will officially leave the bloc in March next year, it hopes to secure a two-year transition deal to taper the effects of Brexit.

Terms of the transition deal will be on the negotiating table this week, with key issues up for debate including immigration, Britain's ability to strike third-party trade deals, and whether Britain will have to abide by new EU laws.

Barnier has said that Britain "will continue to have all the economic benefits, therefore it must apply all the rules" during this period.

However, May appears set on a collision course with the EU after questioning the rights of EU citizens who arrive in Britain during the transition period.

May insisted Friday she was "doing what the British people want" and going nowhere despite the pressure.

Sensing a lack of coordination in government on Brexit, pro-EU politicians have become increasingly vociferous.

Labour MP Chuka Umunna, head of a new coalition of pro-EU groups formed this week, told AFP on Friday that the government was "trying to deliver something that isn't deliverable".

"If the people started this in 2016, they should be the ones who decide how we end it, and whether or not we do actually leave," Umunna told AFP while campaigning in Brixton in south London.</s>LONDON (Reuters) - The European Union’s Brexit negotiator Michel Barnier said on Monday there was not a minute to lose in talks on Britain’s divorce with the bloc, before meeting British Brexit minister David Davis in London.

“My feeling: we have not a minute to lose because we want to achieve a deal,” he told Sky News.</s>(EurActiv) — David Davis will host the EU’s chief Brexit negotiator Michel Barnier in London on Monday (5 February) just before the official talks on the UK’s exit from the EU and their future trade relations are due to resume next week.

In a post on Twitter on Friday (2 February), the Brexit Secretary said he was “looking forward to welcoming Michel Barnier to London on Monday. Important next step in our work to build new partnership between UK & EU.”

Barnier will also hold talks with Prime Minister Theresa May over a working lunch with Davis in Downing Street.

The meeting comes ahead of the next phase of talks in Brussels next week, between the 6 and 9 February, after EU leaders agreed in mid-December to move the talks along.

Davis has said he hopes to have an agreement on a transition period in time for an EU summit on 22 March. However, the May government has come under heavy attack from backbench Brexiteer MPs who have complained that being subject to EU laws without being able to influence them, while also paying into the EU budget, would make the UK a “vassal state”.

“The prime minister has an open mind when it comes to these negotiations,” a Downing Street spokesperson said on Friday.

For his part, International Trade Secretary Liam Fox insisted on Friday that the UK would not be involved in any customs union with the EU following Brexit.

The European Council will publish its guidelines in March on the future trading relationship.

Davis has defended a transition period as the only way the UK can negotiate trade pact with third countries. However, the UK has made little progress towards preparing the ground for this, and confirmed last year that it wants to roll over all of the existing EU-third country trade deals.

That has prompted speculation that May could seek an extension of the Article 50 process rather than a two year transition.

“This is actually likelier than it sounds because of the legal difficulty of rolling over more than 750 international agreements between the EU and third countries, a senior diplomatic source told EURACTIV.</s>LONDON (Reuters) - Britain has ruled out staying in any customs union with the European Union after Brexit, Prime Minister Theresa May’s spokesman said on Monday as the government prepares for a crunch week of Brexit talks.

The extent of any British post-Brexit involvement in the EU’s customs union - which binds members into a trade bloc with common external tariffs - has become a major issue of contention inside May’s divided government and Conservative Party.

Membership of the, or a, customs union after Brexit, would prevent London from striking trade deals with countries outside the EU in future.

“The key point, as the prime minister has said on many many occasions, is that we need to have our own independent trade policy and be able to strike trade deals with the rest of the world,” May’s spokesman told reporters.

“We will be leaving the EU and the customs union and it is not government policy to be members of ‘the’ customs union or ‘a’ customs union.”

He said the official negotiating stance had been set out in a document published in August giving: “two possible options and they are: a highly streamlined customs arrangement, and a new customs partnership with the EU.”

The spokesman said Britain was still looking at both options, and no deadline for a decision on which one to pursue had been set.

With just a year left before Britain’s March 2019 exit from the European Union, May’s party remains deeply divided over what sort of relationship should be built between the world’s biggest trading bloc and the world’s sixth-largest economy.

Such are the divisions within May’s government, that the debate over the extent of Britain’s post-Brexit participation in a EU customs union has taken place in public with key ministers offering a range of views.

While May has repeatedly said that Britain will leave the customs union, some ministers had hoped that Britain could remain in some sort of bespoke customs arrangement with the EU after Brexit.

But supporters of Brexit say one of the main benefits of leaving the bloc will be the ability to strike trade deals with other, faster-growing countries around the world.

The Confederation of British Industry has called for Britain to stay in a customs union and finance minister Philip Hammond last month also left open the possibility of Britain joining a new customs union.

A customs union means that its members apply the same tariff to goods imported into their territory from elsewhere and apply no tariffs to goods from other members. It also limits checks and other bureaucracies at borders between members.

Unless Britain negotiates a new trade deal with the EU, its exports would run into the union’s external tariffs, which average about 5 percent across all goods, including 10 percent for cars and over 200 percent on certain types of poultry.

But May is under pressure from eurosceptic members in her party to quit the trading arrangement because for them the key prize is chance to sign new trade deals with other nations such as the U.S., China and India.

Britain and the EU are due to hold their first formal discussions about what their future relationship will look like after Britain leaves the EU this week.

EU chief negotiator Michel Barnier will meet his opposite number, Brexit Secretary David Davis, in London on Monday for the first time since EU leaders told Barnier to negotiate a post-Brexit transition period to ease Britain’s departure.

May will hold two cabinet meetings on Wednesday and Thursday at which she will try to heal the deep divisions among her ministers over the best way to leave the EU.

If no deal is reached by October of this year, many businesses fear Britain could face a disorderly exit that would weaken the West, disrupt the peace in Northern Ireland, imperil Britain’s $2.7 trillion economy and undermine London’s position as the only financial center to rival New York.

A disorderly Brexit as a result of Britain misjudging the “self-preservation” instincts of the European Union could lead to a further downgrade of the UK’s sovereign credit rating, S&P Global also said on Monday.
After talks with Prime Minister of the United Kingdom Theresa May and Secretary of State for Exiting the European Union David Davis in London, E.U. chief negotiator Michel Barnier calls on the United Kingdom to make a choice on what sort of future relationship it wants with the European Union after Brexit.