I campaigned for remain in 2016 and served as trade minister two years, and I believe we can still get a good, compromise deal with the EU on Brexit.

At such a critical juncture in the negotiations, it is normal to search for compromises. However, many of those being discussed are poor choices. That is why it is such a dangerous time. We must remember that the arrangements we set in place now may last for generations and it may be difficult to change them once this window closes.

Let us look at the issue of a customs union, which is being much discussed at the moment. It recently became the official Labour party position. Its attractiveness is in seeming to offer a solution for the issue of just-in-time supply chains and the Irish border.

But the customs union has many downsides that have not attracted much media coverage. While the loss of independent trade and regulatory policy have been discussed – and these are important – I will focus on some areas that have been less in the public domain.

First, almost nobody – not even Norway or Switzerland – is in a customs union with the EU. Turkey is, but its situation is so skewed against it that the country is seeking to renegotiate. Turkey, of course, entered its customs arrangement as a stepping stone to full membership. We are heading in the opposite direction. Tariffs, quotas, trade agreements – these are all important parts of our economic policy that would no longer be decided by those we elect in this country.

Second, the application of the common external tariff means that the UK’s trade remedies (policies that allow governments to take action against imports harming a domestic industry) would be administered by Brussels, with no input from the UK. Take, for example, steel and ceramics. I know from my time as trade minister that these are controversial areas in which UK producers are rightly looking for protection against Chinese dumping and subsidies. But in a customs union, it is Brussels that would make the decisions (as it does now), but we would have no seat at the table. If we manufactured something that was competing with subsidised Chinese products, for example, and the EU did not produce these products, or even manufactured products that were competitive with them, Brussels might choose not to grant trade remedy relief for them, thus damaging UK producers.

Perhaps even more worryingly, the EU might seek to protect its own manufacturing industries, increasing costs and prices for UK consumers, where our interests might be diametrically opposed. British consumers will end up paying for the protection of Europe’s industries through the application of EU trade remedy laws, which would apply to the whole customs territory. That this might happen without any UK input into Brussels’ decision-making could be damaging for our economy.

Third, there is an important development dimension that has been overlooked. Through the EU, we offer favourable trade access to dozens of countries, split into three groups: “Everything but arms” for the poorest, and GSP (generalised system of preferences) and GSP+ schemes for lower-middle income countries. The UK is influential in determining which of these groups countries fall into. On leaving the EU but still being in a customs union, if Brussels decided to grant less access, we would have to follow suit. There would be an uproar among NGOs and our constituents in the UK if trade preferences for, say, Pakistan, India or Sri Lanka were no longer something Britain had any say over. Indeed, this is likely to happen. Producer interests in the garment industry in southern Europe are already lobbying Brussels to remove preferences for south Asia. Diaspora communities in the UK would be enraged.

Being in a customs union with the EU, but outside its decision-making structures, is a bad policy choice for this country. A wide range of key British interests – from Welsh and Teesside steel workers, the Stoke ceramics industry and Asian diaspora communities, to mainstream importers and exporters – could lose out. All this illustrates the hazards of being the world’s fifth-largest economy, with a large part of our economic policy contracted out to others. We shouldn’t let it happen.

• Greg Hands is a former UK trade minister