UK unveils radical overhaul of EU trade deal in N. Ireland

The UK government on Tuesday announced its intention to drastically overhaul 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.

The government said it 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 Brexit divorce deal with the European Union, recognising Northern Ireland's status as a fragile, 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.

They claim the protocol is undermining their place within the UK and are refusing to join a new post-election power-sharing government in Belfast.

The UK plan would scrap most of the checks, but the government denied it was trashing international law by effectively abrogating a key element of the Brexit deal agreed by Prime Minister Boris Johnson in 2019.

"I think the higher duty of the UK government in international law is to the (1998) Good Friday Agreement and the peace process," Johnson told reporters.

"We don't want to nix it (the protocol), we want to fix it, and we will work with our EU partners to do it," he said.

But the EU issued no hint that renegotiating the protocol was in the offing, after warning that any UK violation of the Brexit pact could see it hit back with swingeing tariffs.

"The protocol is an international agreement signed by the EU and the UK. Unilateral actions contradicting an international agreement are not acceptable," European Commission Vice-President Maros Sefcovic said.

The UK plan "raises significant concerns", he added, warning that the EU "will need to respond with all measures at its disposal" if London goes ahead.

Irish Foreign Minister Simon Coveney said he "deeply" regretted the UK step, which he called "damaging to trust".

Johnson, however, said a trade war was unlikely at a time when the UK public was grappling with the worst inflationary crisis in a generation.

"But what we have to fix is the problems with the Northern Ireland political situation, where you can't get the executive up and running," he said, a day after visiting Belfast for talks with Northern Ireland's main parties.

The largest pro-British party, the Democratic Unionist Party (DUP), says it will not share power with pro-Irish rivals Sinn Fein until the protocol is reworked.

Its hard line came nearly two weeks after Sinn Fein won a historic victory in elections to the Northern Ireland Assembly, which entitled the party to the role of first minister in a joint regional government with the DUP.

In the London parliament, DUP leader Jeffrey Donaldson said the UK government's announcement was a "good start" that could help restore the Belfast executive. But he insisted progress on an actual bill was needed in "days, not weeks".

For her part, Sinn Fein leader Mary Lou McDonald accused Britain of acting like a "rogue state".

Keeping the border open with neighbouring Ireland, an EU member, was mandated in the Good Friday Agreement, given the frontier was a frequent flashpoint during three decades of violence in Northern Ireland until 1998.

But it means checks on have to be done elsewhere, to prevent goods getting into the EU single market and customs union by the back door via Northern Ireland.

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 UK Foreign Secretary Liz Truss vowed "robust penalties" for any companies seeking to abuse the new system.

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.

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".

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