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UK outlines contingency plans for trade, customs if Brexit deal talks fail

The British government published new papers on future trade and customs arrangements that could still function after Brexit even if the U.K. fails to reach a deal with the EU.

Prime Minister Theresa May, who unveiled the papers in an address to Parliament, said the U.K. is preparing "for every eventuality" while hoping for the success of the Brexit negotiations, the latest round of which started this week.

According to the paper on customs, legislation will enable the government to operate a stand-alone customs regime and ensure that value-added taxes and excise laws will continue to operate effectively if the U.K. leaves the EU without a deal in 2019.

In this scenario, the U.K. will establish a customs regime "from day one," the paper said, including setting tariffs and quotas, and establishing a system for the classification of goods in line with World Trade Organization requirements.

The paper said the U.K. would apply the same customs duty to every country with which it does not have a trade deal or otherwise provide preferential access to the U.K. market.

In the document on trade policy, the U.K. government said it intends to pursue new trade negotiations with countries outside the EU during the Brexit transition period. However, such deals would not be brought into effect if they are inconsistent with the transition terms agreed to in the EU negotiations.

The government said it will also seek to "transition all existing EU trade agreements and other EU preferential arrangements" to ensure continuity in the U.K.'s trade and investment relationships.

Meanwhile, May told Parliament that it was possible the European Court of Justice could continue to arbitrate trade disputes during the Brexit transition period, Reuters reported.