Rebecca Long-Bailey told MPs there was a “possibility” remaining in the EU customs union would make it more tricky for the Government to reach future agreements with nations outside the bloc.
Mrs Long-Bailey added Labour “wouldn’t rule anything out at all” in terms of the UK’s future trading relationship with the bloc.
Brexiteers regard the potential to sign trade deals with the rest of the world as one of the main benefits of leaving the EU.
The shadow business secretary’s remarks could cause anxiety among “Hard Brexiteers” who want to to see the UK leave the single market and customs union.
Anti-EU MPs are said to be fearing “Brino”, which refers to “Brexit in name only”.
Mrs Long-Bailey’s words have come just days after Prime Minister Theresa May ruled out keeping Britain in any form of customs union.
It was a key victory for ardent Brexiteers such as Jacob Rees-Mogg, the head of the European Research Group which has a strong anti-EU stance.
A Number 10 source said: “We must be free to sign trade deals with the rest of the world, so it is not our policy to stay in the Customs Union.
“It is not our policy to stay in a customs union.”
Mrs Long-Bailey has laid out Labour’s plan that would mean the UK would remain in a customs union after EU withdrawal, on “the basic terms we have now”.
When asked if the plan would stop us from signing deals with other countries, she replied: “If it was a separate customs union to the current customs union for example that would be a matter for negotiation but it still has to be remembered that you would have to abide by the rules of that customs union.
“You are negotiating as a bloc – that is the whole point of a customs union.
When asked once more if it would make trade deals with other nations more tricky, she said: “It is certainly a possibility. We wouldn’t rule anything out at all but the final deal will be the final deal and it has to be in the interests of Britain but we can’t cut our nose off to spite our face.”
Labour’s customs union plans have been revealed as Theresa May prepares to propose an immediate break from the EU after a transition period.
EU officials have warned the further the UK drifts from EU standards after leaving the bloc the worse the final trade deal will be.