The Government is preparing for a worsening in Anglo-Irish relations, warning that the UK is set to trigger Article 16 of the post-Brexit trade deal.
Such a move would heighten fears of a trade war between the EU and UK and have major impacts on imports and exports to and from Ireland as Foreign Affairs Minister Simon Coveney warned that the EU could set aside the entire trade deal in retaliation.
Multiple government sources said that Mr Coveney's comments reflect the Government's position, with one saying that there is now widespread belief the UK will trigger Article 16 after the Cop26 climate conference.
The UK government has set the EU a December deadline to find a solution on the Northern Ireland Protocol, which was agreed as a way to maintain a free-flowing land border on the island of Ireland after Brexit.
The arrangement effectively keeps Northern Ireland inside the EU’s single market for goods, resulting in some checks for products crossing the Irish Sea from Britain.
The British government has argued that the EU interpretation of the deal has led to it being justified in triggering Article 16 and suspending parts of the agreement.
Sources said that the Government fears that the EU's "patience has frayed" with the ongoing negotiations and is hoping that "commonsense" prevails.
Mr Coveney warned that the entire deal could be set aside by the EU if the UK unilaterally triggers Article 16, but said that this did not mean a hard border on the island.
“I believe that if the British government essentially refuses to implement the protocol, even with the extraordinary flexibilities that are now on offer, and instead looks to set it aside then I think the EU will respond in a very serious way to that,” he told
“It means that the Trade and Co-operation Agreement that was agreed between the British government and the EU was contingent on the implementation of the Withdrawal Agreement, which includes the protocol.
“One is contingent on the other. So if one is being set aside, there is a danger that the other will also be set aside by the EU.”
Mr Coveney said that he hopes there will be no trade war between the two sides. The minister added that the EU was in “solutions mode” and could go a “little further” in terms of trying to streamline checks required on goods.
Mr Coveney criticised the UK's negotiators throughout the process, saying that the EU was questioning whether Boris Johnson's government was operating in good faith.
“The negotiating tactic of the British government, of the prime minister and of lord [David] Frost, has been very consistent. It has been to offer nothing and to continue to ask for more,” he said.
“In the short term that is a successful negotiating tactic because throughout this year, each month that passes, the EU has tried to provide new solutions, new answers, new compromises, more flexibility and so on.
“But, at some point, the EU says ‘enough, we are not negotiating with a partner here that is acting in good faith’.”
Meanwhile the Sinn Féin leader said that the UK was "playing a very dangerous game".
Ms McDonald told BBC NI'sshow that the UK triggering the article would show "colossal bad faith".
“It would demonstrate just again colossal bad faith and demonstrate again that Ireland, the north of Ireland in particular, is collateral damage in the Tory Brexit as they play games and play a game of chicken with the European institutions.
“I would also say that if the British government imagine that they hold all of the cards they are wrong and they’re playing a very, very dangerous game, up to and including perhaps jeopardising the entire withdrawal agreement.”
She said that the decision on the next steps in the long-running disagreement over the protocol was now up to the UK government.
“The reality now is the ball is at the foot of Boris Johnson and his government, and they need to act in good faith."