UK unveils radical overhaul of EU trade deal in N. Ireland

Foreign Secretary Liz Truss said she would introduce legislation reforming the so-called Northern Ireland Protocol "in the coming weeks" -- unless Brussels caves on its insistence that the pact cannot be rewritten.

The protocol was agreed as part of Britain's 2019 Brexit divorce deal with the European Union, recognising Northern Ireland's status as a post-conflict territory that shared the UK's new land border with an EU member.

Its requirement for checks on goods arriving from England, Scotland and Wales has infuriated pro-UK unionists in Northern Ireland, who claim the protocol is undermining their place within the UK and are refusing to join a new power-sharing government in Belfast.

"Our preference remains a negotiated solution with the EU, and in parallel with the legislation being introduced, we remain open to further talks," Truss told parliament.

But she added: "To respond to the very grave and serious situation in Northern Ireland, we are clear there is a necessity to act to ensure the institutions can be restored as soon as possible."

Truss denied Britain was breaching international law by effectively abrogating a key element of the Brexit deal, arguing that the government had tried to implement the protocol "in good faith" but had been stymied by EU inflexibility.
Protecting the peace
The government's "first priority" remains upholding a 1998 peace deal that ended three decades of violence in Northern Ireland, Truss said, rejecting opposition fears the EU could retaliate by imposing swingeing tariffs at a time of surging inflation for the UK public.

Prime Minister Boris Johnson on Monday described the plan as an "insurance" policy, after holding talks in Belfast with leaders of Northern Ireland's main parties.

The largest pro-British party, the Democratic Unionist Party (DUP), said it would not share power with pro-Irish rivals Sinn Fein until the protocol is reworked.

Its hard line came nearly two weeks after Sinn Fein won a historic victory in elections for the devolved Stormont assembly, which entitled the party to the role of first minister in a joint executive with the DUP.

Responding to Truss in parliament, DUP leader Jeffrey Donaldson said the government's announcement was a "good start" that could help restore the Stormont executive. But he insisted progress on an actual bill was needed in "days, not weeks".

Keeping the border open with neighbouring Ireland, an EU member, was mandated in the 1998 Good Friday Agreement, given the frontier was a frequent flashpoint for violence.

But it means checks have to be done elsewhere, to prevent goods getting into the EU single market and customs union by the back door via Northern Ireland.

- Green or red -

Under the new plan, the UK intends unilaterally to create a "green channel" for British traders to send goods to Northern Ireland without making any customs declaration to the EU.

The EU would have access to more real-time UK data on the flow of goods, and only businesses intending to trade into the single market via Ireland would be required to make declarations.

The EU would need to trust the UK to monitor the flow, and Truss vowed "robust penalties" for any companies seeking to abuse the new system. But trust has been at a premium of late.

"This is an international treaty, it's international law, we can't just pretend it doesn't exist," Ireland's Foreign Minister Simon Coveney said Monday in Brussels.

The UK plan would also harmonise tax policy between Great Britain and Northern Ireland, which has been unable to benefit from recent tax breaks announced in London given its position in the EU single market.

And it would seek to end oversight of the protocol by the European Court of Justice -- another red line for Brussels.

Truss said the bill would remove regulatory barriers to goods made to UK standards being sold in Northern Ireland, with businesses able to choose between meeting UK or EU standards in a new "dual regulatory regime".

The United States, which was a guarantor of the Good Friday Agreement, has expressed alarm at suggestions the UK could suspend or scrap the protocol.