MICHEL Barnier has warned leaving the European customs union will leave the UK facing “unavoidable” barriers to trade.

After talks in Downing Street, the European Union’s chief Brexit negotiator said the UK must provide more clarity on what it wants in the next stage of the process and it was time for it to “make a choice”.

Theresa May has ruled out remaining in a customs union with the EU after Brexit, and David Davis insisted Britain’s position is “perfectly clear”.

READ MORE: What is a customs union and why is it important?

Barnier delivered his warning after a three-course lunch at Number 10 of smoked salmon, pork belly and vanilla custard tart.

“The conditions are very clear, everyone has to play by the same rules during this transition,” he said.

“The certainty about this transition will only come with the ratification of the withdrawal agreement.”

He added: “Our future partnership between the UK and EU, on that point we need also clarity about the UK proposals for future partnership.”

He continued: “The only thing I can say, without a customs union and outside the single market barriers to trade on goods and services are unavoidable. The time has come to make a choice.”

But Davis reiterated the UK’s longstanding position to seek a comprehensive free trade agreement with the EU, while still having the opportunity to make deals across the rest of the world.

“It’s perfectly clear what we want to do. There’s no doubt about it, we are leaving the customs union but we are aiming for a good future for Britain,” Davis said.

Confirmation of the UK Government’s approach on the customs union may placate Tory MPs and ministers who are keen for a Brexit arrangement which allows the UK to strike trade deals around the world – something which a customs union could have prevented.

But business leaders have urged the UK Government to remain in a customs union, and Tory remainer Anna Soubry urged Number 10 to “do the maths” and listen to company bosses.

She claimed the “hard Brexit” European Research Group (ERG) of Tory MPs, led by Jacob Rees-Mogg, had a “deeply unattractive” plan which involved leaving the customs union “to chase unicorn trade deals” at the expense of existing relations with the EU.

The Brexit Secretary said the talks, which the Prime Minister dropped in on, had been “very constructive” and the next round would focus on the implementation period.

An “intense” period of negotiations will begin straightaway and the UK Government is “confident” of securing an agreement at the next meeting of EU leaders in March, he said.

May’s Brexit “war cabinet” is due to meet tomorrow and Thursday to continue discussions on the “end state” relationship which the UK will seek with its former EU partners.

The PM’s official spokesman said: “We have said that we want the customs arrangement to be as frictionless as possible and that’s what we will be looking to achieve as part of the deep and special partnership that we are seeking with the EU.

“We want it to be as frictionless as possible and we think we can achieve that because it’s in the interests of the UK and the European Union. As with all these matters, it’s the beginning of a negotiation.”

The spokesman said that May spoke to Barnier for 20 minutes before his lunch with Davis.

“They discussed the fact that they were pleased that they reached agreement in December,” he said.

“The Prime Minister thanked Michel Barnier for the role he played in that and they agreed it was in the interests of both our sides to move quickly on the implementation period and to agree a positive future relationship.”

Ahead of the meeting Barnier had warned the UK Government there was “not a minute to lose” in efforts to achieve a Brexit deal.

Downing Street also sought to draw a line under the customs union issues after days of conflicting messages from ministers about the approach to future arrangements.

May’s official spokesman said the Government had set out its position in a paper published in August, which stated that the UK was leaving the EU customs union but was exploring the possible alternatives of a “highly streamlined customs partnership” or a “new customs arrangement” with the EU.

The spokesman said the August paper acknowledged the option of a customs partnership would be “challenging” to implement.

Yesterday’s meeting took place amid ongoing tensions over the status of EU nationals who come to the UK during the transition period of around two years after the date of Brexit in March 2019. May wants to resist EU proposals for these people to be entitled to settle permanently in the UK.

The chairman of the Commons Exiting the EU Committee, Hilary Benn, said more detail was still needed from ministers if the terms of a future deal with Brussels are to be agreed by October.

“I wish it was clarity but I don’t think it is. I think the Government is in a state of open disagreement, the Prime Minister has been immobilised,” the Labour MP told BBC Radio 4’s Today. He said it was a “profound mistake” to leave a customs union, which would create the need for checks at the Irish border.