An European Commission spokesman noted Britain's proposal for a temporary customs union after leaving the EU.
Responding to a new British position paper released Tuesday, a European Commission spokesman noted Britain's proposal for a temporary customs union after leaving the EU.
But, he added: "We will only address them once we have made sufficient progress on the terms of the orderly withdrawal."
Britain's membership of the EU customs union, which currently allows for the tariff-free movement of goods, will end along with its membership of the single market when it leaves the bloc in March 2019.
It wants to negotiate transitional arrangements to soften the effect of Brexit.
One option its Department for Exiting the EU suggested in a statement Tuesday is "a temporary customs union between the UK and the EU." It will publish a full paper on that proposal later Tuesday.
The Brexit ministry said Britain wanted to be able to sign free trade agreements with third countries during the transition period, although these would only be implemented at the end of it.
Brexit minister David Davis told BBC radio on Tuesday that the transition period could last "something like two years" and would have to be over by the time of the next general election, which is set for 2022.
But a Commission spokesman insisted Tuesday that "an agreement on a future relationship between the EU and the UK can only be finalised once the UK has become a third country.
"As Michel Barnier has said on several occasions, 'frictionless trade' is not possible outside the Single Market and Customs Union," the EU spokesman said.
Barnier is the chief negotiator for the EU in the Brexit talks.
Experts have warned it will be extremely difficult to negotiate a new EU-UK free trade agreement before Britain leaves the bloc -- particularly as Brussels has so far refused even to start trade talks.
The EU says there must first be broad agreement on three key issues: Britain's financial settlement, expatriate rights, and the status of the border between British-controlled Northern Ireland and Ireland.
Britain will publish its proposals on the Northern Ireland border issue on Wednesday, before the third round of Brexit negotiations in Brussels at the end of the month.
The EU itself is currently working on another series of position papers, "including one on customs issues related to the orderly withdrawal of the UK," the EU statement said, without indicating when it would be published.
The next round of Brexit negotiations between Britain and the EU is scheduled for the week beginning August 28.