Foreign secretary Liz Truss has been urged to pull back from the brink over the Northern Ireland protocol, amid warnings that a trade war with the EU would put peace at risk and deepen the cost-of-living crisis by driving up inflation.
As Ms Truss prepared for crunch talks with European Commission vice-president Maroš Šefčovič on Thursday, the White House issued a stern warning to both sides to keep talking.
And in a sign of the heightened attention being paid to the crisis by president Joe Biden, it emerged that the US is on the brink of appointing an envoy to Northern Ireland.
Boris Johnson on Wednesday fuelled expectations that the government will next week table legislation to override the protocol, saying that the 2019 deal – which he negotiated as part of his Brexit agreement – was failing and “we need to sort it out”.
Briefings that London is set to tear up the painstakingly-negotiated agreement “haven’t gone down well” in European capitals, said Irish foreign minister Simon Coveney, who warned that unilateral action would trigger “counter-measures” from Brussels, including legal action.
Whitehall sources stressed that if legislation was laid it would take a long time to pass through parliament, not least because of what is expected to be strenuous opposition in the House of Lords, pushing the ball into the EU’s court.
But the prospect of Britain bringing the curtain down on talks with Brussels triggered alarm among Tory MPs, with the chair of the Commons Northern Ireland committee Simon Hoare denouncing “sabre-rattling” by the foreign secretary and defence committee chair Tobias Ellwood warning that binning the protocol would be “bad for Irish peace, bad for British influence and bad for jobs and living standards”.
Mr Ellwood told The Independent: “Abandoning the protocol is self-defeating. It plays into Sinn Fein’s narrative that a united, peaceful Ireland is better for Northern Ireland. It will provoke a trade war with the EU at a time when the UK has done so well in leading the European response to Russia’s invasion of Ukraine.
“And it will mean fewer movements of goods and higher inflation. The EU will respond by imposing tariffs on UK exports which will further reduce trade with continental Europe.”
Ms Truss is set to tell Mr Šefčovič that compromise proposals put forward by the EU would “take us backwards” and fail to resolve post-Brexit disruption to trade between Northern Ireland and mainland Britain.
But her mooted plan to bypass the deal and unilaterally ease controls on goods crossing the Irish Sea was branded “crazy, frankly” by the head of one of Northern Ireland’s most influential business groups.
Manufacturing NI chief executive Stephen Kelly said that trade with the Republic has jumped 60 per cent since Brexit and investment risen sharply thanks to the protocol, which gives firms in Northern Ireland unique access to the EU single market which mainland counterparts do not enjoy.
“If the aim of these plans is to facilitate more trade between the Great Britain and Northern Ireland it will certainly fail,” Mr Kelly told The Independent. “All it will do is create huge economic harm, deep instability for businesses and further uncertainty. Businesses do not need a potential trade war with the EU.”
In the US, a White House spokesperson left no doubt of Mr Biden’s disapproval of any move to bring down the protocol arrangements.
While recognising that the implementation of the deal has created “challenges”, the spokesperson said: “The best path forward is a pragmatic one that requires courage, cooperation, and leadership. We urge the parties to continue engaging in dialogue to resolve differences and bring negotiations to a successful conclusion.”
And a group of senior US congressmen sent a strongly-worded letter to Ms Truss, voicing “alarm” at suggestions she will break off negotiations with Šefčovič in Thursday’s phone talks and warning that this would “be in direct violation of international law and squarely threaten the Good Friday agreement”.
In the joint letter, the chair of the congressional Europe subcommittee Bill Keating and co-chair of the House of Representatives EU caucus Brendan Boyle said the majority of those elected to the Northern Ireland Assembly last week want to work within the protocol.
The congressmen said the “worst outcome of Brexit would be one that lead to violence and upheaval in Northern Ireland”.
They urged Ms Truss and the British government to “uphold your end of the deal and act in good faith, within the parameters of international law, to maintain peace and stability in Northern Ireland”.
US secretary of state Antony Blinken told a congressional committee last week that Biden will “be moving forward soon on naming an envoy” in order to help Washington to play its role as a “good faith arbiter” in Northern Ireland, they said.
In talks on Capitol Hill, Northern Ireland minister Conor Burns, is understood to have pressed London’s argument that stalemate over the protocol is itself putting the Good Friday Agreement under threat, by preventing the restoration of the power-sharing executive at Stormont.
Failure to form an executive could force a re-run election within 24 weeks’ time, with little prospect of a change in outcome.
Mr Burns, who has been appointed the PM’s special representative to the US on the protocol, said that the UK government had “a moral obligation” to break the deadlock.
“We still want a negotiated solution,” he said. “But if your negotiating partners are at the point of saying there’s nothing to talk about, then we have a moral obligation to take action to protect our citizens in Northern Ireland.”
But Irish Taoiseach Micheál Martin insisted that there was still “a pathway to resolving this issue in a pragmatic way” through talks.
“Significant” concessions from Brussels on medicines and veterinary checks had not been reciprocated by London, he said, adding: “There needs to be political will now on all sides to get this issue resolved. There can’t be any unilateral actions – that will not be helpful.”
Stephen Farry, deputy leader of the non-sectarian Alliance Party, which gained a record 17 seats in last week’s Assembly elections, said that any unilateral move to scrap the protocol would be “grossly irresponsible on the part of the UK government”.
“They would add to instability in Northern Ireland, not solve things,” he said. “They would leave the UK government in breach of its international obligations and send a terrible message to the international community.”
Trade expert Sam Lowe, of Flint Global, said that a unilateral bid to tear up the protocol would not deliver a quick resolution to the problem.
Legislation to override the deal would not come into effect until late this year, creating uncertainty and holding back investment in Northern Ireland.
“To take advantage of the opportunities the protocol provides, businesses need to know that the arrangements are going to endure for a long time,” Mr Lowe told The Independent.
“You just don’t have that at the moment and the latest intervention adds more uncertainty. This is going to run and run.”