Liz Truss has insisted the plan to ditch large aspects of a key Brexit treaty agreed with the EU does not impact the bloc or break international law, so there is no need for Europe to take legal action.
The UK faced threats from the European Union after the foreign secretary sparked anger with her plan to tear up the Northern Ireland Protocol - legislation which has also caused anger both sides of the border on the island of Ireland.
A majority of Northern Ireland's lawmakers rejected the plan in a letter to Boris Johnson on Monday and Ireland's government said reneging on a bilateral treaty "does an awful lot of damage to Britain's international reputation".
The UK pressed ahead with the plan, despite warnings, and its release was met with an immediate response from the EU, with chief Brexit negotiator Maros Sefcovic saying the move would damage trade as he threatened legal action.
But Ms Truss said the changes being proposed "don't make the EU any worse off" as it protects the bloc's single market, "so there simply is no reason for the EU to take any action".
She said the move to break an international agreement does not break international law because of the exceptional way the protocol is impacting Northern Ireland.
Business leaders, however, have warned the UK it risks a “damaging trade war” with the EU and the government’s action risked “significant harm” to industry.
Commission Vice President Sefcovic said the unilateral action by the UK had undermined the trust needed for a seamless post-Brexit trade deal with Brussels.
He said Northern Ireland firms which enjoy access to the EU single market under the terms of the protocol could now see that put at risk.
The European Commission announced it intends to re-open legal action against the UK which has been on hold since September following the publication of the Northern Ireland Protocol Bill on Monday.
Prime Minister Johnson insisted the Bill contained only minor, bureaucratic changes, while Downing Street said it was an “insurance mechanism” in case a negotiated agreement with the EU could not be found.
However, Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said business needed to agree a “pragmatic” settlement.
“We recognise that the protocol in the current state does need to be changed,” he said.
“But the way to do this is not to start a trade war with the EU in the middle of a financial crisis which would be damaging for both British and EU businesses alike and put further strain on already stretched supply chains.”
Richard Burge, chief executive of the London Chamber of Commerce and Industry, said the government’s action risked “significant harm” to businesses across the UK.
“Getting Brexit done was at least meant to deliver certainty to businesses after years of waiting for clarity on the future of the UK’s trade relations with the European Union,” he said.
“The introduction of this Bill means we are now teetering on the brink of a trade war with the EU and that will mean further economic pain and falls in investment.”
Despite the warnings, any confrontation is likely to be some way off.
The government faces significant opposition to its plans in the House of Lords and it is likely to be some months before the legislation becomes law.
Mr Johnson signed the protocol as part of the UK’s Brexit divorce settlement with the EU, with the measures aimed at preventing a hard border on the island of Ireland.
But by imposing checks on goods crossing the Irish Sea from Great Britain, it has fuelled unionist anger in Northern Ireland and is also opposed by Eurosceptics in the Tory Party.
The Bill will enable ministers to establish a “green lane” so trusted traders are allowed to move goods from Great Britain to Northern Ireland without checks, as long as the products remain within the UK.
Products being placed on the market in Northern Ireland would be allowed to follow either UK or EU regulations, rather than having to comply with Brussels’ rules.
The legislation would also remove the European Court of Justice as a final arbiter in trade disputes over the protocol, with the function instead handed to independent adjudicators.
The government insisted the Bill was compatible with international law under the “doctrine of necessity” which allows obligations in treaties to be set aside under “certain, very exceptional, limited conditions”.
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