The paper, part of a series of documents to be released ahead of renewed Brexit negotiations, claims "there are two broad approaches the U.K. could adopt" -- streamlining current arrangements or establishing a new customs partnership.
The U.K. is expected to leave the EU in 2019 as a result of a 2016 referendum which began the process of ending the country’s 44-year membership of the bloc.
"A highly streamlined customs arrangement," is one option the British government seems more eager to propose to EU negotiators.
London, in this choice, is aiming to "continue some of the existing arrangements between the U.K. and the EU”.
Leaving as few additional requirements on EU trade as possible and implementing technology-based solutions form part of the proposals to deliver "as frictionless a customs border as possible".
However, the U.K. government said a new deal would be "unprecedented as an approach and could be challenging to implement".
The paper said London would "look to explore the principles of this with business and the EU".
"A new customs partnership with the EU," forms the second option, which would "involve the U.K. mirroring the EU’s requirements for imports from the rest of the world where their final destination is the EU".
The U.K. said persuing either of these options would depend on negotiations with the EU as the two models provided different approaches.
- 'No guidance'
Secretary of State for Exiting the EU David Davis said: "The approaches will benefit both the EU and the U.K. and avoid a cliff-edge for businesses and individuals on both sides."
However, Keir Starmer, Davis’s opposition Labour Party’s counterpart, said Britain’s government remained divided internally over Brexit.
In a statement, he said: “The first proposal suggests ‘a new customs border with the EU’ could be introduced without disrupting trade; the second suggests a new borderless customs partnership could somehow be agreed while Britain also signs external trade deals.
“These fantastical and contradictory proposals provide no guidance for negotiators or certainty for businesses. The proposals also make it less likely that necessary transitional arrangements will be in place by March 2019.”
Tuesday’s paper also suggested the U.K.’s only land frontier -- between the Republic of Ireland and Northern Ireland -- should avoid becoming a "hard border".
The government "would seek to recognize the unique circumstances of Northern Ireland and aim to protect individuals and traders," it added.
Another policy paper on the Irish border issue is expected from the British government on Wednesday.