John McDonnell insisted this morning that the UK can negotiate new trade deals whilst remaining in a customs union with the European Union.
In a speech last week, Labour leader Jeremy Corbyn said his party backed remaining in a customs union with the EU after Brexit. However, he was unclear whether this would mean outsourcing the UK's trade policy to the EU.
McDonnell has said today that the UK should not prioritise one concern over the other. In an interview on Sky News, he suggested the UK could negotiate both outcomes if it could change the tone of talks with Brexit negotiator Michel Barnier.
Asked whether he prioritises new free trade deals over an EU customs union, McDonnell said: "I don't believe it is impossible.
"I am optimistic it will happen."
The Instutite of Directors has welcomed Labour's Brexit policy, but has warned it is unlikely that the EU would extend its free trade agreements to the UK after Brexit, because this would require a revision of EU treaties.