"I know one thing that I would like to be considered, and I know it is under consideration, is the possibly of a customs union being formed between the UK and the EU," Mr Varadkar told reporters on the doorstep of a summit in Brussels.
"Ultimately ... in a world of big blocs its in the interests of the UK to be part of one of those blocs. It's also in our interest to have the UK in our bloc.
"I think we'd be generous in negotiating that, understanding that the UK couldn't be a silent partner in such an arrangement, it would have to have a say in decisions being made."
Labour has said it wants to join a customs union with the EU to soften the impact of Brexit, but that the UK should have a say in any trade deals.