British Brexit Minister David Frost has warned that post-Brexit rules agreed for Northern Ireland could have a “chilling effect” on companies doing business there, in an interview with The Telegraph newspaper.

A three-month extension of the status quo has ended the dispute for now, but not resolved the underlying issue.

Under the Northern Ireland Protocol – negotiated by London and Brussels – the province remains bound by EU customs and common market rules, despite being part of the United Kingdom.

The aim is to keep open the border between Northern Ireland and the Republic of Ireland and uphold a peace deal for the island, but as a consequence goods have to be checked between Britain and Northern Ireland instead.

Frost expressed concern that the protocol is having a “chilling effect” on firms, with some British companies “simply giving up and saying it’s too much trouble to engage with all the paperwork and bureaucracy,” the Telegraph reported.

In his interview, conducted ahead of a meeting with German Chancellor Angela Merkel and British Prime Minister Boris Johnson on Friday, Frost said the need to resolve the issue was “quite urgent,” as support in Northern Ireland for the deal was falling.

Frost called on the European Union to show more understanding for the situation in Northern Ireland, raising concern that Britain and the EU “find sticking plaster fixes, but never deal with the underlying problem.”