Brexit minister Lord Frost has said he believes the Northern Ireland Protocol is not sustainable for long in the form it is currently operating.
Lord Frost also called on the EU to show more “common sense” when dealing with the problems arising from the protocol.
He was in Northern Ireland to meet business and community representatives to discuss the challenges they are facing following the departure from the EU.
A new raft of checks on goods at the ports of Belfast and Larne under the terms of the protocol have sparked anger among unionists who feel Northern Ireland is being separated from the rest of the UK.
Talks are continuing between the EU and the UK Government to solve some of the issues, but many unionists have called for it to be scrapped.
Lord Frost said: “It is clear from the conversations we have had with businesses here today that the way the protocol is operating is presenting various challenges. I’ve heard from business groups how some suppliers in GB are beginning to stop sending products into Northern Ireland.
“We have also heard about reduced availability of choice, cancelled deliveries, products being pulled, interference with movements.
“The protocol relies on cross-community support but this situation does risk undermining that. Our number one priority as the UK Government is protection of the Good Friday Agreement in all its dimensions, north-south and east-west, and that is the top priority of the protocol itself.
“We hope the Commission share that view, although if so they aren’t always as clear about it as they could be.”
Lord Frost added: “The major issue that worries us now is the EU continues to want to treat the regulatory boundary in the Irish Sea as if it were like any other external border, despite the obligations of the protocol to facilitate trade between Great Britain and Northern Ireland, to avoid controls at the ports and airports of Northern Ireland to the most extent possible.
“We are committed to working through the issues with the EU, to find a way forward and have been doing so intensively for the last few months. We have proposed a range of solutions to the existing problems but progress is limited. We do think the EU needs to show more common sense and pragmatism.
“It is hard to see the protocol as currently operating could be sustainable for long and we continue to consider all other options.”
Meanwhile, DUP leader Edwin Poots’ allegations that the European Union is causing harm to Northern Ireland in the wake of Brexit lacks “adherence to reality”, according to the EU’s ambassador to the UK.
Joao Vale de Almeida on Tuesday dismissed Mr Poots’ claims that the arrangements are having a “devastating impact” and are causing “demonstrable harm to every individual in Northern Ireland”.
The diplomat argued that “there is no alternative” to the Northern Ireland Protocol, after the DUP leader called for it to be suspended.
Mr Vale de Almeida told BBC Radio 4’s Today programme: “First of all I don’t think those statements have adherence to reality. The EU is politically, financially and emotionally, I would say, committed to peace and prosperity for everybody in Northern Ireland.
“The protocol is not the problem, Brexit created the problem in Northern Ireland.
“The protocol is a joint endeavour of the UK and the European Union, it is British law, European law, international law, there is no alternative to the protocol.
“Even those that criticise the protocol do not present an alternative which is compatible with the terms of Brexit so the protocol is the solution, we need to implement it and we want to implement it with pragmatism.”
Mr Poots has claimed the region is being used as a “plaything” by Europe and argued its ports will be subjected to greater checks on goods from Britain than take place in Rotterdam when grace periods end.