UK demands new post-Brexit deal on Northern Ireland from EU

© Reuters. A truck drives past a defaced 'Welcome to Northern Ireland' sign on the Ireland and Northern Ireland border reminding motorists that the speed limits will change from kilometres per hour to miles per hour on the border in Carrickcarnan, Ireland, March 6,

By Michael Holden and William James

LONDON (Reuters) - Britain on Wednesday demanded a new deal from the European Union to govern post-Brexit trade with Northern Ireland, saying it already had cause to step away from parts of the deal that it struck with Brussels only last year.

The Northern Ireland protocol, backed by Prime Minister Boris Johnson, was part of the settlement that finally sealed Britain's sometimes bitter divorce from the bloc, four years after Britons voted to leave in a referendum.

Businesses in the province say it is damaging trade, and some pro-British groups have protested at what they say is a weakening of ties with Britain.

On Wednesday, London said it wanted a new "balance", and to eliminate EU oversight.

"We cannot go on as we are," Brexit minister David Frost told parliament.

The protocol addresses the biggest conundrum of the divorce: how to ensure the delicate peace brought to the province by a 1998 U.S.-brokered peace accord - by maintaining an open border - without opening a back door through Ireland to the EU's single market of 450 million people.

It essentially requires checks on goods between the British mainland and Northern Ireland, but these have proved burdensome to companies and an anathema to "unionists" who are fiercely supportive of the province remaining part of the United Kingdom.

Frost said there was justification for invoking Article 16 of the protocol, which allows either side to dispense with its terms if they are proving unexpectedly harmful.

"Nevertheless ... we have concluded that is not the right moment to do so," he said. "We see an opportunity to proceed differently, to find a new path to seek to agree with the EU through negotiations, a new balance in our arrangements covering Northern Ireland, to the benefit of all."

Despite repeated British complaints, the EU has refused to amend the protocol, fearing that the hard-to-police border with Ireland could allow goods to enter its single market without meeting its regulatory standards.

'NOT UNUSUAL TO RENEGOTIATE'

Frost called for negotiations to produce "significant change".

"We don't see what is wrong with that. Anyone would think that it was a highly unusual thing to renegotiate a treaty; of course it is not," he said.

He said Britain wanted a "normal treaty framework" that was "more conducive to the sense of genuine and equitable partnership", and would not be policed by EU institutions and the European Court of Justice.

The EU, which has pointed out that Johnson negotiated and signed up to the deal, is likely to balk at such demands. But the Democratic Unionist Party, which shares in the government of Northern Ireland, hailed the announcement as a significant step.

Even though checks on goods entering Northern Ireland from Britain have so far been relatively lenient, major retailers say they have struggled to cope and might need to shift supply chains from Britain to the EU.

Frost called for a "standstill period" that would extend current grace periods and freeze existing legal action.

Britain has already unilaterally extended a grace period reducing checks on shipments of chilled meat products, and the EU later agreed this could apply through September to end a dispute dubbed the "sausage war".

Marks & Spencer (OTC:MAKSY), one of Britain's biggest retailers, said extra paperwork had made it hard to get goods into Ireland and France since Britain formally left the EU's single market on Jan. 1 - and that once full checks were introduced for Northern Ireland, it too should expect prices to rise and some items to be stopped.

"It's going to be very, very serious for customers," M&S chairman Archie Norman told BBC radio.

There have also been disturbances among unionist communities in Northern Ireland. Pro-British paramilitary groups told Johnson in March that they were suspending support for the peace agreement due to concerns over the Brexit deal.