If the UK were to put this forward it would be a positive move, even though it wouldn't fly. It would show that the UK accepted the need to comply with SM rules in order to avoid border barriers. That would be an important step forward.
The stuff in there about customs arrangements is nuts of course. But perhaps there is a way out.
HMG could accept that it would stay inside a CU with the EU, and thus forego the right to get royally screwed by the US and China in bilateral trade negotiations, unless and until technology had evolved sufficiently to make its customs arrangement suggestions feasible.
I might think that such a CU arrangement might turn out to be permanent, but technologically optimistic Brexiteers presumably feel differently, so everyone could go away happy.
Whether such a combined SM for goods plus CU proposal would be acceptable to the EU is another matter entirely, but it would be good to see HMG propose something that at least made sense on its own terms.
From an EU point of view you run into the cherry picking issue and that is worth taking seriously. But from an EU point of view these are the cherries that we ourselves would have chosen to pick.
We keep frictionless trade in goods with the UK, which is good since we run a goods trade surplus with the UK. If HMG refuses free movement of people, the UK loses SM access for services, including financial services, which is what is important for the UK.
So this would not be a case of the UK picking all the best bits of its existing relationship, just a pragmatic way of avoiding border controls in Ireland, Britain, and Calais and other potentially affected ports.
And to state the obvious it would require the UK accepting ECJ jurisdiction in all matters affecting the single market for goods...
And it would also need to address concerns about level playing fields and so on, but they will have to be addressed anyway...
