The British government will propose a new interim UK-EU customs union to help prevent chaos at borders after Brexit.
The proposal is contained in the first of a series of 'future partnership papers' to be published today.
Negotiators are hopeful British Cabinet ministers can get behind the proposals following disagreements over the issue.
If agreed with EU negotiators, the plan would allow free trade to continue on an interim basis.
The British government says it will seek a new customs arrangement that would allow it to reach new trade deals with "partners in Europe and around the world".
Britain’s Brexit secretary David Davis said the proposal would be in the best interests of all involved:
The paper also repeats the aim of avoiding a hard border between Northern Ireland and the Republic.
While confirming the UK's exit from the EU's customs union after Brexit, the paper proposes a "temporary customs union between the UK and the EU" as a "possible approach" to getting a "smooth and orderly" transfer to a post-Brexit customs regime.
At the moment, all goods and parts travel across the EU free of both tariffs and checks as part of the bloc's customs union.
Remaining in the EU's customs union would restrict Britain's ability to sign independent trade deals with non-EU countries, with a common external tariff applied outside the zone.
Turkey already has its own customs union with the EU for industrialised goods, which enables participation in complex manufacturing supply chains.
Speaking to Sky News last month, Britain’s International Trade Secretary Liam Fox said there was a difference between "the" customs union and "a" customs union - but cautioned against using Turkey as a model.
The British government said the interim customs arrangements will be "time-limited" to allow for businesses to adapt to a post-Brexit system.
No actual timeframe has been mentioned, although some Cabinet ministers have suggested it will have to expire before the next scheduled general election in 2022.
The EU will have to agree to any interim arrangement and especially to the establishment of a temporary customs union.
The Labour party's shadow Brexit Secretary Sir Keir Starmer branded the customs proposals "incoherent and inadequate" and "designed to gloss over deep and continuing divisions within the Cabinet."
Picture by: Wiktor Dabkowski/DPA/PA Images
The European Parliament's lead Brexit coordinator, Guy Verhofstadt, slammed the suggestions as a 'fantasy':
To be in & out of the Customs Union & "invisible borders" is a fantasy. First need to secure citizens rights & a financial settlement
— Guy Verhofstadt (@GuyVerhofstadt) August 15, 2017
Outlining a position on customs arrangements does, however, help bring some clarity to the situation regarding the border in Ireland.
A further Government paper on the border issue will be published on Wednesday.
The EU's lead Brexit negotiator Michel Barnier said issues such as the Irish border will have to be agreed before moving on to any future relationship between the EU and the UK.
— Michel Barnier (@MichelBarnier) August 15, 2017