Finding an alternative to the EU customs union
has been one of the most convoluted jigsaw puzzles
in the Brexit negotiations.
So what has the UK government proposed, and why
does it matter so much?
Let's first remind ourselves what the EU customs
union actually is.
This seemingly sensible trade agreement
allows goods to move freely among members.
It cuts down on lengthy border checks and paperwork,
and creates a smooth supply chain
for companies operating across the EU.
Sounds ideal, right?
Well, there's a catch.
Everyone inside the union has to agree
to apply a common tariff on goods from outside the bloc,
and that's a red line for the UK government.
Theresa May wants Britain to be able to negotiate its own trade
deals after Brexit.
The other challenge is to create a new regulatory area
for customs and goods, avoiding a hard border between Ireland
and Northern Ireland.
There are three, actually - or at least,
there were, until recently.
The first two UK proposals, a customs partnership
and a maximum facilitation model,
have both been rejected by Prime Minister Theresa May's
own cabinet and the EU.
The latest option is called the facilitated customs
arrangement, and it's a sort of hybrid of the first two
options.
It involves Britain collecting EU tariffs
on goods arriving in the UK that are en route to the bloc's
single market and sending those tariffs to Brussels.
Separate UK tariffs would apply to goods destined for Britain.
And if the destination of goods is unclear,
then a higher tariff - likely to be the EU one - would apply.
The whole plan essentially creates an EU-UK free trade
area for industrial goods and agricultural products
with a common rulebook.
That means no regulatory checks at the border between the UK
and the EU, including Ireland.
So trade with the EU remains frictionless,
but the UK is also free to make its own trade
deals with other countries.
Isn't this the best of both worlds option, where Britain
can have its cake and eat it?
Not quite.
Under the plan, the UK would agree to regulatory alignment
with the EU.
So new rules created in Brussels about goods
would be made into British law without London having any say.
The UK Parliament could reject a rule,
but that would risk retaliation by the EU.
And services, such as banking and insurance,
will be part of a looser agreement.
Well, it's complicated.
The UK's plan relies on technology
that doesn't exist yet.
Brussels worries that smugglers could beat the system
by paying a lower UK tariff at a British port
and then moving their goods into the EU single market.
The EU doesn't want to outsource something
as important as collecting tariffs to a country
outside of the bloc.
And then there's the Eurosceptics in the UK
who dislike the shift towards a softer Brexit.
Oh there's one more thing.
Even if Brussels agrees to the customs plan,
it still needs the support of the UK Parliament.