The UK should stay as close as possible to the EU after Brexit, Leo Varadkar has said.
The "enormous" trade between Britain and Ireland should be protected to ensure Irish jobs, the Taoiseach added.
On Friday morning leaders of the 27 EU member states meeting in Brussels adopted guidelines for future EU-UK relations after the separation in a year's time.
The Taoiseach said: "The UK has decided to leave the EU. The best way we can get a good outcome for Ireland is to make sure that we have an agreement that keeps the UK as close to the EU as possible.
"That is the best way to avoid a hard border between Ireland and the North and also the best way to protect the enormous trade that occurs between Britain and Ireland, and that is so important for Irish jobs and our economy, and agriculture in particular."
In 2015, 13.8 billion euros (£12 billion) of goods were exported from Ireland to Britain, more than half involving food and live animals or chemicals and related products, according to the Central Statistics Office of Ireland.
Goods heading into Ireland from Britain accounted for 24% of imports in 2015 while imports from the North accounted for 2%.
Mr Varadkar added: "It is not a case of when they are winning we are losing or when they are losing we are winning.
"We are not going to get a good outcome for Ireland on that basis."
One of the main stumbling blocks is the issue of the Irish border.
Little agreement has been reached on the detail of measures to avoid a hard frontier with checks on goods and services.
Renewed efforts are expected by negotiators in the coming weeks to crack the issue.
Mr Varadkar has insisted a border deal must be done by October to allow time for it to be ratified by legislatures.
Otherwise, a backstop option will mean the North would continue to follow EU regulations after Brexit involving the all-island economy and North-South co-operation, he added.
Unionists have opposed any solution which would create differences between the North and the rest of the UK, and British Prime Minister Theresa May is reliant on Democratic Unionist support in key Westminster votes.
Avoiding a hard border is generally defined as one without frontier checks on goods and services, but there has been no evidence of a technological solution for frictionless trade anywhere else in the world, a committee of MPs said.