The EU has threatened to retaliate with “all measures at its disposal” if Britain proceeds with controversial plans to rip up parts of the Northern Ireland Protocol.
The British 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 Britain 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 Britain 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 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 Foreign Affairs Minister Simon Coveney said the unilateral action from Britain 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.
British 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, Mr Johnson 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.
Britain 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.”