What is the EU customs union?

Theresa May

Theresa May

But speaking on a visit to a business in the West Midlands, Mrs May said leaving the customs union would allow the United Kingdom to strike new trade deals around the world, adding that she was seeking a "frictionless" border with the EU.

Peers voted on Wednesday in favour of an amendment to the flagship EU Withdrawal Bill which would seek to maintain the possibility that Britain might stay in a form of customs union.

The UK government has restated its commitment to leaving the EU's custom union - ahead of a symbolic vote on the issue this week.

"They are weaponising the Irish border in order to try to keep us in the European Union by the backdoor by using a combination of fear and bluster".

Among those who said they voted Leave, 52% are unhappy with the status of negotiations compared to 23% who were happy.

What is the argument for staying in the customs union?

Lawmakers will have to decide whether to back the government or reject the agreement - with the risk that Britain could crash out of the European Union next year without any deal in place. A vote for the customs union would prompt a crisis at home, but would also open the way to a reboot in Brexit talks in Brussels, which aren't making much progress.

The dilemma facing May is how to avoid physical infrastructure on the border between Northern Ireland and the Republic while Britain is outside the customs union and single market.

Downing St insists Britain will quit the customs union despite several reports claiming Mrs May is ready to compromise with Brussels on the issue.

Now the House of Commons will vote on the measure.

Common external tariffs are applied to goods imported from countries from outside the bloc.

They also argue that negotiating new trade deals with the European Union would be a long and tortuous process, with all member states having to sign off on the agreements before they can take effect.

"Trying to keep us in a customs union would be deeply divisive in the party, the Commons and the country at large", Jacob Rees-Mogg, chairman of the European Research Group of Euroskeptic Conservatives, told The Sunday Telegraph.

Justice Secretary David Gauke said the Government needs to make the case to MPs for leaving the customs union as part of Brexit.

May has also said that any customs union deal with the EU would keep London from striking new trade deals with fast-growing economies like China and India. In comments released beforehand, he said: "We will work with old allies and new partners across the world, utilizing the UK's economic strength and diplomatic prowess to forge new trading relationships".

■ Worldwide trade secretary Liam Fox has pledged to cut "bureaucracy and red tape" to promote free trade post-Brexit.

While EU policymakers have so far rejected the idea, saying it has never been done before on such a scale, leading figures in Britain's financial sector reinforced their backing on Monday for the plan.

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