The EU has threatened to retaliate with “all measures at its disposal” if the UK proceeds with controversial plans to rip up parts of the Northern Ireland Protocol.
The Foreign Secretary has set out her intention to bring forward legislation within weeks, overwriting parts of the post-Brexit deal, freeing goods destined to stay within the UK from EU-level checks.
Liz Truss told the Commons the move was needed to reduce “unnecessary bureaucracy” and to protect the Good Friday Agreement, arguing that the EU’s proposals “would go backward from the situation we have today”.
She said the Bill would take measures to protect the EU single market by implementing “robust penalties” for those who “seek to abuse the new system”.
But European Commission vice-president Maros Sefcovic criticised her plan and warned that Brussels could retaliate.
Should the UK proceed with the Bill, the EU will respond with “all measures at its disposal”, he said.
This is likely to aggravate fears the move could spark a trade war with the bloc.
The legislation will propose separate “green” and “red” lanes for goods travelling between Great Britain and Northern Ireland, drawing a line between those destined to stay within the UK and those heading to the Republic of Ireland and beyond.
There will be no crossover between the channels, it is understood, with goods filtering through one or the other, depending on their intended destination.
This will override the current arrangements, whereby Northern Ireland is effectively kept in the EU’s single market for goods, with a hard border down the Irish Sea.
The row over the treaty has created an impasse in efforts to form a devolved government administration in Belfast, with the Democratic Unionist Party (DUP) refusing to join an executive unless its concerns over the situation are addressed.
DUP leader Sir Jeffrey Donaldson said Tuesday’s move was “welcome if overdue”, and a “significant” step towards getting power-sharing in Northern Ireland back up and running.
He told the Commons his party will take a “graduated and cautious approach” as the legislation progresses.
But Ireland’s foreign affairs minister, Simon Coveney, said the unilateral action from the UK was “damaging to trust”.
“At a time when people in Northern Ireland have chosen their elected representatives and want to get the executive back up and running, the path chosen by the British Government is of great concern,” he said.
Prime Minister Boris Johnson insisted problems with the protocol must be addressed.
On a visit to Paddington station, west London, he said: “What that actually involves is getting rid of some relatively minor barriers to trade.
“I think there are good, common sense, pragmatic solutions. We need to work with our EU friends to achieve that.”
The protocol was negotiated by Mr Johnson as part of the Brexit Withdrawal Agreement.
Asked how he could justify breaking a treaty he signed, the Prime Minister said “the higher duty of the UK Government in international law is to the Good Friday Agreement and the peace process”.
He added: “That is the thing we have to really look to.”
Northern Ireland’s 1998 Good Friday peace agreement contains provisions to protect and develop relations, both on a north-south basis on the island of Ireland and on an east-west basis between the island and Great Britain.
The UK claims the protocol has upset this “delicate balance” of unionist and nationalist aspirations by undermining the east-west dynamic.
The controversial legislation announced on Tuesday is due in the “coming weeks”, before the summer recess.
Ms Truss told the Commons the Bill will “ensure that goods moving and staying within the UK are freed of unnecessary bureaucracy”.
“This respects Northern Ireland’s place in the UK, in its customs territory, and protects the UK internal market,” she said.
“At the same time it ensures that goods destined for the EU undergo the full checks and controls applied under EU law.”
Labour accused the Government of “trying to convince people its flagship achievement was not a negotiating triumph but a deal so flawed that they cannot abide by it”.
Shadow Foreign Office minister Stephen Doughty said: “Either they did not understand their own agreement, they were not upfront about the reality of it or they intended to break it all along.
“The Prime Minister negotiated this deal, signed it, ran an election campaign on it. He must take responsibility for it and make it work.”
Philip Rycroft, who was the most senior civil servant at the Department for Exiting the European Union (DExEU) between 2017 and 2019, told BBC Newsnight the plans are “astonishing”.
“That the UK Government, in a country which has always prided itself on the rule of law, should be contemplating unilaterally revoking elements of an international treaty which it signed up to only a couple of years ago is frankly extraordinary and worrying,” he said.
Ms Truss said the new system will be underpinned by “data-sharing arrangements”.
The UK has proposed a “trusted trader” scheme, whereby the EU would be provided with real time-commercial data, giving it confidence that goods intended for Northern Ireland are not entering the EU single market.
As well as customs paperwork, the Bill will remove regulatory barriers to goods made to UK standards being sold in Northern Ireland, she said.
She told MPs: “Businesses will be able to choose between meeting UK or EU standards in a new dual regulatory regime.”
The Foreign Secretary said the legislation will also provide the Government with the ability to decide on tax and spend policies across the whole of the UK, and address issued related to governance.
She insisted the proposals to reform the deal were “consistent with our obligations in international law”, and said the move was “not about scrapping the protocol”, but delivering on its objectives.
Responding to the Foreign Secretary’s plan, Mr Sefcovic said: “Should the UK decide to move ahead with a Bill disapplying constitutive elements of the protocol as announced today by the UK Government, the EU will need to respond with all measures at its disposal.
“Our overarching objective is to find joint solutions within the framework of the protocol.
“That is the way to ensure legal certainty and predictability for people and businesses in Northern Ireland.
“With political will and commitment, practical issues arising from the implementation of the protocol in Northern Ireland can be resolved.
“The European Commission stands ready to continue playing its part, as it has from the outset.”
It is understood that the UK would pull the Bill in the event of all of its aims and objectives being met by the EU.
The option of invoking Article 16 will remain on the table.
More details are expected to be set out in the coming weeks.
Downing Street said it understood the EU’s opposition to plans to bring forward the controversial legislation, but insisted action was needed.
The Prime Minister’s official spokesman said: “We’ve been discussing this for around 18 months now, that’s why the Foreign Secretary and the Prime Minister have taken the decision to move ahead with this twin-track process.”
Ms Truss has invited Mr Sefcovic to a meeting of the withdrawal agreement joint committee in London to discuss the prospect of a “negotiated solution” as soon as possible.
Asked if a date had been set, the PM’s spokesman said he was “not aware” one had been agreed.