A fresh “approach” will be set out this month if talks fail to agree a breakthrough, ministers said – warning a truce over chilled meats and medicines had failed to solve the crisis caused by the Protocol.
For the first time, “trade diversion” – a surge in north-south goods sales from the Republic of Ireland, because of the trade border created in the Irish Sea – was described as “one of the problems”.
Brandon Lewis, the Northern Ireland Secretary, accused Brussels of “intransigence” in the ongoing talks and of a “lack of understanding of the sensitivities” in the province.
And David Frost, the Brexit minister, revealed the new “approach” would be announced before MPs leave Westminster for their summer recess, on 22 July.
“We think that’s essential for setting out how we will proceed for the rest of this year,” he told an event hosted by the Policy Exchange think-tank.
But he was accused of “profound dishonesty” in denying that signing the Protocol – to force through a hard Brexit in 2019 – would create the deep problems, replying: “It’s a bit more complicated than that.”
Boris Johnson has repeatedly threatened to invoke Article 16 – to suspend the flashpoint parts of the Protocol – if the EU does not give way, but has refused to scrap it altogether.
The new threat will fuel EU fears that the UK is determined to dismantle the legal agreement and has simply “banked” the concessions it has made, before demanding more.
Last week, Brussels agreed to the UK’s request for a three-month delay to the chilled meats ban – as well as easier rules on moving medicines and guide dogs to Northern Ireland, and for UK drivers.
It insists the longer grace period must be used to arrange for retailers to obtain meats from the Republic of Ireland, as agreed in the Protocol.
But Mr Lewis insisted “a permanent solution” to allow sausages to continue to be sold across the Irish Sea must be found by the autumn.
The EU is urging the UK to agree a Swiss-style veterinary agreement – which might avoid the ban – but Lord Frost dismissed the proposal as “a non-starter”.
The minister denied he was setting a new deadline, but said: “All options remain on the table for us.
“We’re considering our next steps, we’re discussing with all those with an interest and I can say today that we will set out our approach to Parliament in a considered way on these questions before the summer recess.”
The EU has accused the UK of failing to abide by the Protocol – by imposing checks at Northern Irish ports and by supplying data on cross-sea trade – but Lord Frost insisted the EU’s strict implementation was “the root of the problem”.