The UK will be out of the customs union and single market after March 2019, David Davis has suggested.
Addressing company executives at an event hosted by The Times, the Brexit Secretary said he believed exit talks will be completed within the two-year deadline set out under the Article 50 process.
Asked if the UK would leave the customs union, he replied: “I would have thought so.”
Mr Davis said any transition period was likely to end by 2022 as “the most important thing is it’s got to be done before the election”.
And he said any transition arrangements will not extend to trade.
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This stance appears at odds with that of Chancellor Philip Hammond, who earlier repeated his call for any transitional deal to avoid a “disruptive and dangerous cliff edge” in trading links with the EU after Brexit.
Speaking in Berlin to the CDU Economic Council, Mr Hammond said there must be a “smooth and orderly path” to new arrangements under Brexit.
He said: “Early agreement on these transitional arrangements so that trade between our countries can carry on flowing smoothly will reduce uncertainty, unlock investment decisions, business confidence and protect jobs and prosperity, in Britain, in Germany and across this continent.”
But Mr Davis described the comments by Mr Hammond on the timescale as “not quite consistent with one another”.
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Under the Government’s plan to extend rights to EU citizens already living in the UK, Mr Davis said there would be “practically no burden” on businesses.
He said: “My job is to bring back control of migration to Westminster.
“It is not to slam the door on immigration.
“We will bring immigration down but in a way and at a pace that does not cause labour shortages or, worse, undermine the nation’s need for new talent.”
Downing Street insisted the length of any transition or implementation phase will form part of Brexit negotiations.
A Number 10 spokeswoman said: “It’s not in anyone’s interest for there to be a cliff-edge. We want to give certainty to businesses. That’s the position of David Davis and Philip Hammond also.
“What the Prime Minister has been clear about is that clearly leaving the EU means we will be leaving the Customs Union.
“What that looks like and the phases of implementation and so on will all be subject to negotiation.”
Roland Rudd, chairman of Open Britain which campaigns against a hard Brexit, said: “To protect our economy during the Brexit process, it is vital that the Government negotiates a transitional period that keeps Britain in the single market and customs union until a trade deal that gives us the ‘exact same benefits’ can be negotiated.
“It is truly concerning that the Brexit Secretary appears to have ruled this out.”