The European Commission has welcomed the UK Government’s publication of its position paper on the UK’s future custom relationship with the EU as a “positive step” but reiterated its assertion that “frictionless trade will not be possible outside the single market and customs union”.

The paper, the first in a series on the UK’s future arrangements with the EU, proposes a “highly streamlined customs arrangement” in which “customs requirements are as frictionless as possible” and trade barriers are “reduced or removed”.

The paper also introduces the idea of a new customs partnership with the EU, which would “align” the UK’s own system and “remove the need for a UK-EU customs border”.

In line with the call made by 14 UK farming organisations this month, the UK Government is also calling for an interim period for the implementation of the arrangements to allow for a “smooth and orderly” transition.

According to the paper, the UK Government will have to legislate for a new customs regime to be in place by March 2019 because current UK customs legislation is insufficient to create a standalone customs regime.

Also, if there were no Brexit agreement, the UK would treat trade with the EU as it treats trade with non-EU countries, so customs duty and import VAT would be due on EU imports to the UK and UK exports to the EU. In March 2019, the UK will introduce a new Customs Declaration Service which will comply with the EU’s Union Customs Code.

David Davis, Secretary of State for Exiting the EU, said the approaches specified in the paper would “benefit both the EU and UK and avoid a cliff-edge for businesses and individuals on both sides.”

The Commission said the “clock is ticking. On customs, we take note of the UK’s request for an implementing period as regards the future relationship, but we will only address these once we have made sufficient progress on terms of the orderly withdrawal.”