DUP leader Sir Jeffrey Donaldson has insisted that the European Union needs to recognise that the Northern Ireland Protocol has “failed”.

He was speaking shortly before taking part in a virtual meeting with European Commission vice president Maros Sefcovic.

The protocol, which was negotiated as part of the Brexit settlement to avoid a hard border on the island of Ireland, is set to be top of the agenda.

BrexitPeople take part in a Loyalist protest in Newtownards, County Down, against the Northern Ireland Protocol (Brian Lawless/PA)

Unionists strongly oppose the additional checks on goods arriving into Northern Ireland from the rest of the UK as undermining the union.

Leading supermarkets at the weekend hit out over fears of the impact on supply lines into the region once various grace periods on checks end.

“The EU need to recognise that the Protocol has failed, it is creating very substantial problems in terms of barriers to trade between Great Britain and Northern Ireland, our biggest market, and distortions in trade,” Sir Jeffrey told the BBC.

“Indeed we know that not only has there been a diversion of trade where Northern Ireland businesses are now having to locate their supply chains in the Irish Republic, but contrary to what the Protocol actually says, the EU are using the grace periods to facilitate the Irish Republic in attracting more Northern Ireland companies to use them as their supply chain, and that is contrary to what the Protocol says, because it says if there is a disruption to trade then the UK Government may take action to correct that.

BrexitHandout photo issued by the European Commission of European Commission vice-president Maros Sefcovic speaking to the media during a press conference at Europe House in Central London (Niklas Halle/European Commission/PA)

“It (protocol) is having a damaging impact on our economy and of course fundamentally on our relationship with the rest of the UK.”

Sir Jeffrey said he wants the EU to agree to negotiate new agreements that “respect Northern Ireland’s place within the UK’s internal market”.

“If that doesn’t happen I think the UK is well within its rights to invoke Article 16 of the protocol which allows for unilateral action to be taken to correct a diversion of trade and its impact on our economy and our society,” he said.

“If the EU is not prepared to recognise the failings of the protocol then I think the UK is entitled to take unilateral actions in those circumstances.”

Sir Jeffrey also accused the EU of “destabilising and undermining” the power-sharing arrangements at Stormont, by Northern Ireland politicians having no say in post-Brexit arrangements.

Last week the DUP set out seven tests on the protocol.

They include a promise of no checks on any sort of goods being sent to Northern Ireland from Great Britain and compatibility with the Act of Union which says all parts of the UK should be on equal footing when it comes to trade.