Britain's Brexit Minister David Frost on Monday said that the EU must move in negotiations over trade arrangements in Northern Ireland or Britain may unilaterally suspend the so-called "protocol".
Under the protocol, Britain agreed to leave some of the bloc's rules in place in Northern Ireland and accept checks on goods arriving from elsewhere in the UK, to preserve an open land border with EU member state Ireland.
Britain has asked for "substantial and significant change" on areas including the movement of goods into Northern Ireland, standards for goods and governance arrangements, and a treaty framework that is not policed by the European Court of Justice.
Mr Frost has warned of "cold mistrust" in relations with the EU if they do not move, but on Friday EU commissioner Maros Sefcovic rejected the idea of renegotiating the deal.
Mr Frost raised the prospect of using Article 16 of the protocol, which allows either side to dispense with its terms if they are proving unexpectedly harmful.
"They would be making a significant mistake if they thought that we were not ready to use Article 16 safeguards, if that were to be the only apparent way forward to deal with the situation in front of us," he told the House of Lords.
"If we are to avoid this situation, there needs to be a real negotiation between us and the EU."
Britain last week said it planned to extend post-Brexit grace periods on some imports to Northern Ireland to give London and Brussels more time for talks about trade with the province.
Mr Frost said there needed to be space for negotiations.
"I don't in fact take Commissioner Sefcovic's words as a dismissal of our position, I take them as acknowledgement of it," he said.
"But I also take it as a fairly clear indication that there is more to be done. So I do urge the EU to think again."
