Germany Goes Cold on May's Latest Brexit Plan for Customs Union

(Bloomberg) -- Chancellor Angela Merkel's government is unconvinced by U.K. Prime Minister Theresa May's latest attempt at a compromise arrangement for customs after Brexit, seeing it as unworkable, according to a person familiar with the German stance.

May is proposing a complicated customs setup that would leave the U.K. collecting tariffs on behalf of the European Union on goods crossing its border. May traveled to Berlin on Thursday for talks with Merkel as she seeks backing from key European capitals for her plan on the future trading relationship she wants with the bloc.

German reticence threatens to undermine May's proposal on how customs will operate at a time when she is already fighting for backing from members of her own Cabinet. In a statement welcoming May to the Chancellery, Merkel reminded the prime minister that the clock is ticking toward the U.K.'s exit from the EU in March 2019.

“The negotiations are reaching a decisive phase,” Merkel said. “Time is growing short and the political framework has to be declared already in October, so the British government's decisions over the next few days will be important.”

--With assistance from Patrick Donahue.

To contact the reporter on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Emma Ross-Thomas

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