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Sam Lowe, from the Centre for European Reform, said Mr Davis’s plan may well fail. “The fact David Davis thinks we can substantively negotiate on the future relationship is slightly odd, as the EU vision and UK’s still seem a long way apart,” he said.

British officials have not always been enthusiastic about the American sanctions, but British businesses have tended to comply, largely out of fear of being penalized by the United States, said Ian Bond, director of foreign policy at the Center for European Reform. “The reality is that, for most companies dealing with the United States, the U.S. is much more important than dealing with Russia or Cuba or Iran or Libya,” he said.

Writing for Business Insider on Thursday, trade expert Sam Lowe warned that countries will make tricky and in some cases unacceptable demands in free trade deal negotiations with post-Brexit Britain. "When it comes down to it, I wouldn’t be surprised if the most valuable lesson we learn from our first post-Brexit forays into the world is that, when lofty free trade ambition runs up against domestic political reality, the UK is really quite 'European' after all," the Centre for European Reform research fellow wrote.

Agata Gostyńska-Jakubowska, from the Centre for European Reform said: “British ignorance of the EU institutions is harming its own interests. “British ignorance of how they operate is clearly damaging the UK’s chances of success in the negotiations. “The British need to wise up about the EU and its institutions, after all it could make the difference between getting a good deal, a bad deal, or no deal.”

"The irony is that the EU is getting serious about defence just as the UK is leaving,” says Sophia Besch, a defence expert at the Centre for European Reform. The UK’s partnership paper on defence, which set out the May government’s position on future EU-UK relations, published last autumn, was received “with glee in Brussels because it was so supportive,” Besch told EURACTIV.

“The government’s problem is that, as it becomes clear that the most we can hope for is a free trade agreement with the EU, more and more businesses reliant on pan-European supply chains will be forced into considering the viability of their UK operations,” said Sam Lowe, from the Centre for European Reform.

As Sam Lowe, a trade expert at the Centre for European Reform, puts it: “It only requires one red line to move.” The government says it can still strike deals on services and innovative new industries, and the hardliners accept this is the best Brexit they can get.  

We cannot be sure that the EU-27 would be prepared to negotiate a customs union, although Charles Grant of the Centre for European Reform thinks its leaders are sympathetic to the idea.