UK car industry says Britain must participate in customs union to keep EU trade

LONDON, Jan 17 (Reuters) - Britain needs to participate in the European customs union to help retain EU trade, a car industry body said on Tuesday, warning that a return to World Trade Organisation tariffs would threaten the sector.

Prime Minister Theresa May said on Tuesday Britain cannot remain a full member of the EU customs union but will seek tariff-free trade with the bloc after it leaves.

"We need ... a deal which includes participation in the customs union to help safeguard EU trade, trade that is tariff-free and avoids the non-tariff and regulatory barriers that would jeopardise investment, growth and consumer choice," the CEO of the Society of Motor Manufacturers and Traders Mike Hawes said.

"Reversion to WTO tariffs... would threaten the viability of the industry," he said. (Reporting by Costas Pitas; editing by Stephen Addison)