UK ‘still haggling’ with EU over financial terms, David Davis says
15 August 2017
David Davis has refused to rule out making payments to Brussels for temporary customs arrangements after leaving the EU.
The Brexit Secretary will publish proposals on Tuesday morning, outlining plans for a time-limited transition which would ensure businesses on both sides of the Channel only have to adapt once to the rule changes.
In a series of broadcast interviews, Mr Davis failed to rule out whether the UK would have to pay for the temporary customs deal, which he said would last "something like two years".
He also suggested the temporary arrangements could allow Britain to negotiate trade deals with other countries for when it leaves, as current rules bar members of the EU customs union from making their own deals outside the bloc.
Pressed on whether the UK would have to pay, he told BBC Radio 4's Today programme: "I am not going to do the negotiation on air.
"What we are not going to do, let's be clear, we are not going to continue the £10 billion a year net contributions we currently have."
Asked if money could be a part of the negotiations, he said: "I didn't say that. Wait and see."
Mr Davis also told ITV's Good Morning Britain: "We sell them, the Europeans, about 230 billion euro of goods and services a year.
"They sell us 290 billion euro. So there are a lot of things there."
Asked whether Britain would have to pay to stay in the customs union, he said: "Well, I don't think ... well, what happens in that sort of interim period you will have to leave me to negotiate, I'm afraid, how we do it, but the aim is to bring to an end these huge £10 billion-a-year payments, bring that to an end now.
"We are still haggling with them over what we may owe them in the short term but we are going to bring the overall thing to an end.
"This is something that is in both sides' interest."
Securing future trade deals outside the EU could also be on the cards under the new plans, Mr Davis said.
He told Today: "There's a legal position here.
"The reason we can't sign now is because of something called the duty of sincere cooperation, it's written into the treaty, and it's not related to the customs union, it's related to the overall treaty.
"Once in 2019 when we leave, that legal duty goes away.
“Now we will still be responsible around it but our view is there is no legal basis for saying we can’t do it, we are talking about it to other countries, we are just not signing.”
The proposals for new customs arrangements to allow trade with the EU are being outlined in the first of a series of “future partnership papers” being released by the Government.
One option being put forward by Mr Davis for new arrangements would see the UK manage a new customs border with administration streamlined to the “fullest extent possible”.
The Brexit Secretary will also float plans for a customs partnership with the EU which would negate the need for a customs border between the UK and the rest of the bloc.
He said the negotiations were going “fine” and EU leaders were less hostile than they had been previously.
Mr Davis told ITV: “The simple truth is we want to come out of this better but they (the Europeans) want to come out of it better too.
“There was a terror early on that we would be the first of many countries breaking off.
“After the victory of (President Emmanuel) Macron in France, that terror is reduced.
“They are no longer quite so afraid so the punishment battalion side is now reducing.”
A European Commission spokesman said: “We will now study the UK position paper on customs carefully in the light of the European Council guidelines and the council’s negotiating directives.
“The next negotiation round will start in the week of 28 August.
“We take note of the UK’s request for an implementing period and its preferences as regards the future relationship, but we will only address them once we have made sufficient progress on the terms of the orderly withdrawal.
“An agreement on a future relationship between the EU and the UK can only be finalised once the UK has become a third country.
“As Michel Barnier has said on several occasions, ‘frictionless trade’ is not possible outside the Single Market and Customs Union.”
The EU is also working on a position paper on the customs union, following a tranche of documents published before the summer on issues such as citizens’ rights and nuclear materials, he said.
Jonathan Brady/PA Wire