Theresa May announces Britain will not remain full member of EU customs union

Theresa May has said Britain will not remain a full member of the EU customs union after Brexit, saying the UK wants to open up to negotiate its own trade deals with the rest of the world.

The Prime Minister suggested Britain would prefer to retain a form of "associate membership" of the union, limiting the increase in red tape for businesses who export to continental Europe.

"I do not want us to be bound by the common external tariff," Ms May said, proposing a new relationship with the members of the bloc that involves a preferential form of access to the union.

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She highlighted Donald Trump's recent comments, in which he said he is keen to do a trade deal with the UK once it is outside the customs union, which prohibits members from negotiating their own external deals.

"Countries including China, Brazil and the Gulf states have already expressed interest in striking trade deals with us," she said.

"We have started discussions on future trade ties with countries like Australia, New Zealand and India. And President-elect Trump has said that Britain is not at the back of the queue for a trade deal with the United States, the world's biggest economy, but front of the line."

Ms May said full customs union membership would prevent the UK from striking its own comprehensive trade deals.

"I want Britain to be able to negotiate its own trade agreements but I also want tariff-free trade with Europe, and cross-border trade there to be as frictionless as possible.

"That means I do not want Britain to be part of the common commercial policy and I do not want us to be bound by the common external tariff.

"These are the elements of the customs union that prevent us from striking our own comprehensive trade agreements with other countries. But I do want us to have a customs agreement with the EU."

She said she had an open mind whether that meant a "completely new" agreement, becoming "an associate member of the customs union in some way" or "remaining a signatory to some elements of it".

But she said: "I want to remove as many barriers to trade as possible and I want Britain to be free to establish our own tariff schedules at the World Trade Organisation, meaning we can reach new trade agreements not just with the EU but with old friends and new allies from outside Europe too."

The BBC's Nick Robinson described an attempt to retain partial membership of the customs union as a "cake eating bid". "May pitches to retain barrier-free benefits of customs union without accepting common external tariffs," he said.

It comes after Ms May said Britain would definitely be leaving the EU single market, rejecting the idea of a "half-in, half-out" Brexit deal.

"Being out of EU but a member of single market would mean complying to rules and regulations without having a vote on what they are.

"It would to all intents and purposes mean not leaving the EU at all."

The Prime Minister said she did not believe the UK would leave the EU without a trade deal, but if it did, Britain could turn the situation to its advantage.

She said: "Because we would still be able to trade with Europe. We would still be free to strike trade deals across the world. And we would have the freedom to set competitive tax rates, and embrace the policies that would attract the world's best companies and biggest investors to Britain.

"And if we were excluded from accessing the single market, we would be free to change the basis of Britain's economic model. But for the EU, it would mean new barriers to trade with one of the biggest economies in the world."

Read Theresa May's speech in full