Hopes Rise of Truce in Brexit Sausage War Over N. Ireland Trade – Bloomberg

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British and European officials are increasingly optimistic they will avert a post-Brexit trade war, believing the two sides will strike a truce in the dispute over checks on goods moving into Northern Ireland.

The British government has asked the European Union to extend the grace period before a ban comes into force on the sale of chilled meats and fresh sausages into Northern Ireland from the rest of the U.K.

No deal has been done yet and European officials want to hear how the British government will use any extension to the June 30 deadline, with EU diplomats due to discuss next steps at a meeting Wednesday, people familiar with the matter said. But expectations on both sides are growing that an agreement will be reached, the people said.

The issue of trade rules for Northern Ireland sparked heated clashes between the U.K. and the EU in recent weeks and overshadowed the Group of Seven summit in Cornwall, southwest England, this month.

Prime Minister Boris Johnson has threatened to suspend the rules unilaterally if the EU refuses to back down, and the EU has warned it will respond with legal action if he does.

Boris Johnson, right, and Emmanuel Macron during the G-7 summit in Carbis Bay, U.K. on June 12.

Photographer: Ludovic Marin/AFP/Getty Images

Johnson and French President Emmanuel Macron argued face-to-face about the transport of sausages within France and the U.K., and British media have labeled the clash the sausage wars.

Last week, U.K. minister David Frost said the government was becoming increasingly concerned that the dispute could undermine fragile political stability in Northern Ireland at a highly sensitive time.

Is Northern Ireland Heading for Another Political Crisis?: Q&A

The current position of the protocol is not sustainable, Northern Ireland Secretary Brandon Lewis said at a parliamentary committee on Wednesday. We need to rectify that, we take nothing off the table.

In recent days, the EU has been reviewing the U.K.s formal written request for an extension to the grace period. Officials on both sides now believe its likely that an extension to the current grace period will be granted.

The U.K. has opted not to introduce some checks on goods crossing into Northern Ireland, saying the EUs strict approach to enforcing the rules is hurting local communities. The EU, which is Britains largest trading partner, says the U.K. is failing to implement the terms of the Brexit deal Johnson signed less than two years ago.

Under the terms of the Brexit accord, Northern Ireland -- unlike the rest of the U.K. -- remained under the EUs customs and single market rules to avoid creating a visible border with the Irish Republic, a move that would risk reviving sectarian conflicts.

The EU wants a permanent settlement and is keen to avoid rolling grace periods becoming the norm. European officials say grace periods were designed to allow time for businesses and authorities to come into compliance with the Northern Ireland protocol, which was part of the U.K.s separation agreement with the bloc.

(Updates with Lewis comment in eighth paragraph.)

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Hopes Rise of Truce in Brexit Sausage War Over N. Ireland Trade - Bloomberg