New PM Liz Truss is expected to ask the EU for an extension of grace periods for post-Brexit trading rules in Northern Ireland – rather than triggering Article 16 of the NI Protocol.
The current grace periods – designed to reduce the volume of protocol-designated checks on goods moved between GB and NI – are due to expire next week on 15 September.
As previously covered by the IOE&IT’s Daily Update, it had been suggested that Truss would use Article 16 to allow trade to continue, a move which could lead to a strong response from the EU.
Talks over the NI Protocol have been stalled since February, with Truss introducing the Northern Ireland Protocol Bill to allow the government to override aspects of the agreement.
The bill has passed its third reading in the House of Commons and is now awaiting scrutiny in the House of Lords.
An ally of Truss told the FT: “I’d be surprised if we go down the Article 16 route, although we’re not ruling anything out.”
The provision allows either party to take unilateral "strictly necessary" measures if applying the protocol would lead to “serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade".
An EU official said that the EU and UK could “muddle through,” with extended grace periods buying more time for further negotiations.
Responding during Prime Minister's Questions today to a question from former NI secretary Shailesh Vara regarding the NIP, Truss said she wants a negotiated solution but that she will not allow the issue to drift, according to The Guardian.
"We want a negotiated solution but it does have to deliver on all the things we set out in the Northern Ireland Protocol Bill," Truss said.
US president Joe Biden used his first conversation with Truss last night to warn that triggering Article 16 would affect UK-US relations, according to The Telegraph.
A White House statement said that the two leaders had discussed “the importance of reaching a negotiated agreement with the EU on the NI Protocol”.
EU diplomats say pausing the bill's progress is “the bare minimum” to allow new talks.
Irish foreign minister Simon Coveney has warned Truss that a trade dispute with the EU is the “last thing” Britain needs, reports the Belfast Telegraph.
Coveney said the UK and EU could still achieve a “sensible compromise” if the incoming PM softens her approach on the contentious post-Brexit trading arrangements.
Answering questions in the Commons today (7 September), new Northern Ireland secretary Chris Heaton-Harris MP outlined the government’s approach to the protocol.
“It is key that we try to negotiate a solution with the EU to sort out the issues, however we have legislation ready and if we do not get a negotiated solution we will legislate,” he said.
Former Northern Ireland minister and newly-appointed minister of state at the Department for International Trade (DIT) Conor Burns MP has said there is “an appetite” for the government to re-engage with the EU, as covered in the IOE&IT Daily Update.
He said he had “constructive and prolonged talks” with the EU’s main Brexit negotiator, Maros Sefcovic, at the recent British-Irish Association conference – and that he believed “we can find a way to a negotiated solution to the NI Protocol”.