The UK government Tuesday announced a drastic overhaul of the post-Brexit trade rules in Northern Ireland, arguing the plan was needed to end political paralysis in the territory but risking a trade war with the EU.
Foreign Secretary Liz Truss said she would introduce legislation reforming the so-called Northern Ireland Protocol "in the coming weeks" -- unless Brussels caves on its insistence that the pact cannot be rewritten.
The protocol was agreed as part of Britain's 2019 Brexit divorce deal with the European Union, recognising Northern Ireland's status as a post-conflict territory that shared the UK's new land border with an EU member.
Its requirement for checks on goods arriving from England, Scotland and Wales has infuriated pro-UK unionists in Northern Ireland, who claim the protocol is undermining their place within the UK and are refusing to join a new power-sharing government in Belfast.
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Under the new plan, the UK intends unilaterally to create a "green channel" for British traders to send goods to Northern Ireland without making any customs declaration to the EU.
The EU would have access to more real-time UK data on the flow of goods, and only businesses intending to trade into the single market via Ireland would be required to make declarations.
The EU would need to trust the UK to monitor the flow, and Truss vowed "robust penalties" for any companies seeking to abuse the new system. But trust has been at a premium of late.
The UK plan would also harmonise tax policy between Great Britain and Northern Ireland, which has been unable to benefit from recent tax breaks announced in London given its position in the EU single market.
And it would seek to end oversight of the protocol by the European Court of Justice -- another red line for Brussels.
Truss said the bill would remove regulatory barriers to goods made to UK standards being sold in Northern Ireland, with businesses able to choose between meeting UK or EU standards in a new "dual regulatory regime".
The United States, which was a guarantor of the Good Friday Agreement, has expressed alarm at suggestions the UK could suspend or scrap the protocol.
The EU said it "will need to respond with all measures at its disposal" if Britain goes ahead with unilateral changes.
The announcement, made by British Foreign Secretary Liz Truss, "raises significant concerns," European Commission Vice President Maros Sefcovic said in a statement.
"The (Northern Ireland) Protocol is an international agreement signed by the EU and the UK. Unilateral actions contradicting an international agreement are not acceptable," he said.