UK PM Truss not expected to trigger Article 16 over N. Ireland Protocol -FT

(Reuters) -Britain's new Prime Minister Liz Truss is expected to not activate the so-called "Article 16" emergency measures in the Northern Ireland Protocol in the coming weeks, the Financial Times reported on Tuesday, citing her allies.

Article 16 allows either side to take unilateral action if it deems the post-Brexit agreement is having a strongly negative impact on their interests.

A move to trigger it would ramp up tensions with Brussels, and could ultimately lead to a trade war, with the EU possibly suspending parts of the trade deal that removed tariffs and quotas for goods.

EU officials now expect Truss to request an extension to the grace periods agreed by the EU and UK in 2020 to allow lighter touch controls on trade between mainland Britain and Northern Ireland, which were due to expire on Sept. 15, the newspaper said.

"I’d be surprised if we go down the Article 16 route, although we’re not ruling anything out,” one of Truss' allies told the FT.

A bill to unilaterally scrap some customs checks to ease the movement of goods is working its way through the British parliament, and Truss said last month that if picked as prime minister she would seek to deliver that legislation in full.

EU diplomats say that Truss needs to put the bill on ice to allow new talks, the FT report added. "That’s the bare minimum,” said one diplomat.

(Reporting by Jyoti Narayan in Bengaluru, editing by Deepa Babington)