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Lord Frost, cabinet office minister and former chief UK Brexit negotiator, delivered the warning to the British-Irish Association in Oxford on Saturday. Brussels is being urged to compromise over the controversial Northern Ireland protocol, which introduced some customs checks with the rest of the UK.
This has outraged unionists, who believe the move undermines their British identity.
Protests against the protocol have occurred across Northern Ireland, whilst the controversy was partly blamed for a wave of loyalist rioting in April.
During his address Lord Frost suggested the current arrangements don’t treat the UK and EU as equal partners.
He said: The stakes are high. The arguments can be bitter.
“And I worry this process is capable of generating a sort of cold mistrust between us and the EU which could spread across the relationship.
“It’s holding back the potential for a new era of cooperation between like-minded states in a world which needs us to work together effectively.
“We badly need to look reality full-on.
“To put our arrangements here onto a more durable and sustainable footing, one that represents genuinely mutual benefit.
READ MORE: Anna Soubry sparks backlash after wading back into EU row – ‘Blame everything on Brexit!’
The protocol was introduced to avoid a hard-border between Northern Ireland and the Irish Republic.
It was feared this would undermine the 1998 Good Friday Agreement, which brought to a close 30 years of conflict in the province.
Lord Frost was clear fundamental changes to the protocol are needed, not minor differences in interpretation.
He also added: He said: “The current governance arrangements have to evolve to reflect the reality that this is an agreement between two sovereign and autonomous entities, not a relationship of subordination or one where one party’s rules have to be applied mechanically by the other.
“You should be in no doubt about the centrality of this problem to our politics and to this Government.
“The issue needs to be fixed and we are determined to fix it.”
Tensions in Northern Ireland could rise again in May, when the province holds its next assembly elections.
Anger over the protocol has helped to fracture the unionist coalition, with the hard-line Traditional Unionist Voice (TUV) picking up increasing support.
This means the DUP could fall behind Sinn Fein for the first time since the Stormont assembly was created.
Lord Frost suggested the protocol dispute could become a lasting thorn in UK-US relations unless compromises are made.
Britain formally voted to leave the EU in June 2016, by 52 percent of the vote to 48 percent.
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