The UK government and the EU will resume talks this week on how to resolve a long-running dispute over trade arrangements with Northern Ireland that has soured relations in the first year after Brexit.

British Foreign Secretary Liz Truss will try to sever the elusive knot left by her predecessor Lord David Frost, who resigned late last year as did London start to retreat It has some of the strictest requirements.

Truss had a more enthusiastic tone than Frost in the initial contact, and invited EU Brexit Commissioner Maros Sefcovic to meet at her elegant mansion in Chiwenning, Kent, on Thursday night, promising to make “constructive proposals” to break the impasse.

But officials on both sides admit they are still far apart on the substance of how to manage the new trade border in the Irish Sea. The Financial Times looks at the deal outlook.

UK position

like her ex teras maintainBritain’s 2019 Brexit deal for Northern Ireland is “unsustainable” and needs to be reinvented.

The Northern Ireland deal leaves the region in the EU’s single commodity market to avoid reinstating a hard trade border on the island of Ireland, but this requires a trade border in the Irish Sea.

The UK government says the trade border unnecessarily divides the UK’s own internal market and hits British traders, who now face high levels of bureaucracy to move goods from the mainland to Northern Ireland.

Truss takes the hard line newspaper article Released over the weekend, it wrote that the UK would like to see “consignments shipped from the UK to Northern Ireland without inspection or documentation”.

London also wants the EU to change a part of the deal that requires any UK government subsidy decision that could affect the region’s goods market to be approved by the European Commission in Brussels.

In addition, the UK wants to remove any requirement for Northern Irish businesses to notify the EU when goods leave the EU single market, which is required by EU law.

Finally, the UK is seeking to remove the status of the European Court of Justice, the EU’s highest court, as the “final arbiter” of disputes over future agreements. Instead, London wants an arbitration mechanism where the European Court of Justice only decides on issues of EU law.

If Brussels doesn’t fix the issues, Truss says she reserves the trigger Article 16 A safeguard clause in the agreement that will temporarily suspend some transactions while a resolution is found.

She has been pressured by Northern Ireland Conservative MPs and union politicians not to compromise with Brussels.

EU position

EU officials welcomed Truss’ dovish tone, but warned it was not enough to ensure a breakthrough. “We will not be tempted by a night at the country house,” said an official close to the talks.

Truss’ decision to lay out her demands in a newspaper article also angered EU countries, which have shown little patience for Britain in national capitals that want to focus on the bloc’s ambitious green agenda and Covid-19 recovery.

“The government is used to talking to Brussels through national press conferences with Truss . . . not much has changed,” one diplomat said.

On the substance of the UK’s request for a drastic reduction in cheques, Brussels believes there are limits to how far it can go. If Northern Ireland is to remain in the single market for goods, the EU will have to do some oversight.

“If anything goes into the EU single market . . . we have to have an overview,” Sefkovic said before Christmas.

The committee has suspended legal action against Britain for failing to implement parts of the deal while talks continue. The EU has also unilaterally introduced legal reforms to ensure the protocol does not disrupt the supply of medicines, and in October proposed measures it said could reduce customs inspections by “50 percent” and agricultural inspections by “80 percent”.

However, the UK government disputed the assessment and said the EU proposal fell far short of what was necessary to make the deal work.

Sefkovic has avoided setting a deadline for talks, but the EU wants a comprehensive deal as soon as possible, preferably before the start of the Northern Ireland election campaign in March.

Northern Ireland’s position

EU-UK talks resume as political situation in Northern Ireland becomes increasingly unstable election A vote on the region’s power-sharing government was held on May 5 in what was seen as a referendum on the deal.

The Democratic Unionist Party, which supports Northern Ireland’s status in the UK, is fighting to retain leadership of the devolved regional government and has threatened to withdraw its ministers unless London quickly strikes a deal to remove the Irish Sea border.

The DUP believes it has been deceived by the Westminster government before and is seeking to pressure Truss over fears the UK government could reach a deal that falls short of its demands.

at the same time, Dublin London and Brussels have been urged to ensure protocol talks don’t drag on into the past February, with Northern Ireland’s business community asking both the EU and the UK to bury their political differences and find flexibility for Northern Ireland’s interests.

Aodhán Connolly, director of the Northern Ireland Retail Federation, said the business community was “under no illusions” about the challenges faced by negotiators in the coming months.

“This is probably our last and best chance to strike a deal between the EU and the UK to allow Northern Irish businesses to be competitive and preserve choice and affordability for our families,” he said.

What’s next?

There are 3 paths open to Truss, all of which are difficult to navigate.

If she triggers Article 16, EU member states have made it clear they will retaliate quickly, including a possible suspension of the Trade and Cooperation Agreement, which allows duty-free and quota-free trade between the UK and its biggest market.

A clear statement of the UK government’s intentions #NorthernIreland from @trussliz, before further negotiations with the EU. Very welcome.https://t.co/clcCwoArwR

– Conservative Union Research Unit (@ConservativeURU) January 8, 2022

If Truss is subject to some commodity inspections and eventual oversight of the European Court of Justice, the commission may allow more leeway for the UK to oversee the deal on its behalf.

But if she accepts it, Truss risks being pushed back by a caucus of more than 80 Brexit Conservative MPs who on Sunday tweet Support her tough opening statement as a “clear” statement of intent.

Or, faced with such an unpleasant choice, she could decide to simply keep talking, pulling the current tension away and forcing the EU to take the first drastic move, such as restarting legal action against the UK that was suspended last year.