Key to the Prime Minister's policy is the "facilitated customs arrangement", whereby tariffs charged at the border would be passed on to either the British or European Union authorities depending on the destination of imported goods.
"The EU can not and ... will not delegate the application of its customs policy and rules, Value-Added Tax and excise duty collection to a non-member, who would not be subject to the EU's governance structures", Barnier said.
However, the Czech state secretary for European affairs said his government would not help the Prime Minister find "loopholes" in the EU negotiating position insisted there was unity behind Mr Barnier's approach to the talks and the Prime Minister would struggle to find "loopholes" in the EU's position.
He said Brussels should embrace the Prime Minister's Brexit white paper for the sake of maintaining good relations with the UK.
Instead, Barnier said Britain could still join a customs union, which would mean Britain could not make its own trade deals after Brexit.
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Raab said Britain has designed its future trading relationship proposals both to respect the result of the European Union referendum, and the core principles of the EU. But Barnier said this would never be acceptable. Such "frictionless trade" is essential for pan-European value chains - from food supply logistics to auto manufacturing - as well as the desire to avoid a "hard border" in Ireland. She's repeatedly rejected the EU's preferred option for a backstop plan for the Irish border - which would effectively keep Northern Ireland in the bloc's customs territory, while applying many regulations of the single market. "We will respect that".
Mrs May said: 'Far from being anxious about preparations that we are making, I would say that people should take reassurance and comfort from the fact that the Government is saying we are in a negotiation, we are working for a good deal - I believe we can get a good deal - but. because we don't know what the outcome is going to be. let's prepare for every eventuality'.
Both sides warned the idea was fraught with political difficulties, but it might open the door to a withdrawal agreement by the end of this year.
Michel Barnier said the United Kingdom wanted to "take back control" of its money, law and borders - but so did the EU.
"This is a far advanced, well thought-out, principled and pragmatic document and we expect to negotiate on the basis of it".
Senior politicians such as Anna Soubry, former cabinet minister; Chuka Ummuna, Labour MP; and Vince Cable, leader of the Liberal Democratic party, have backed calls for a second referendum if and when a deal is secured by London and Brussels.