Business leaders have warned Lord Frost that triggering article 16 of the Northern Ireland protocol would be a “lose-lose” move.

As Frost prepares to reiterate his threat to suspend the protocol using article 16 in two appearances at next week’s Conservative party conference, businesses in Northern Ireland have said such a step would add to the legal uncertainty for traders and damage the economy.

A group of trade representatives met Frost at a face-to-face meeting last week in Hillsborough Castle in Northern Ireland.

Those at the meeting said Frost made it clear that triggering article 16 was under consideration but that he would not be dumping the protocol completely. “He was very, very keen to stress that there was a still a need for an international treaty,” said one at the meeting.

They said that triggering article 16 would have a chilling effect on trade in and out of Northern Ireland.

“It will not persuade a single person who is not supplying NI already to do so; that those who are already trading with NI may stop supplying NI because they might find themselves in legal jeopardy as boardrooms will want to comply with the law; and thirdly, EU customers who are buying from Northern Ireland may decide not to do so because they will consider it too much of a hassle in the legal uncertainty,” said one business leader at the meeting.

Their warning comes days after the Democratic Unionist party entered an alliance with three rival parties to fight for substantial changes to the protocol, which has meant fresh red tape for businesses in Great Britain selling into Northern Ireland.

They warned of the “grave damage” it was inflicting on the local economy and plan to ratchet up that message at a lunchtime event on Monday at the Tory conference in Manchester.

Some sources surmise that triggering article 16 would be a political masterstroke, giving the DUP, which has threatened to quit Stormont, the chance to declare victory over the EU and calm unionist anxieties.

Business leaders in Britain in regular meetings with Cabinet Office and Downing Street representatives question whether the government has the political stomach to trigger article 16 when it will merely result in a souring of relations with the EU and end up with both sides having to re-enter talks, albeit on a more formal basis.

The EU is planning to unveil fresh proposals on the protocol in the week after conference.

One business leader said: “This stuff about article 16 is all about the messaging. They want to get it across to the EU that they are serious about article 16. The one thing they fear most is that the EU is going to come back with ‘take it or leave it’ proposals and they want a serious negotiation.”

But others dismiss this. “The UK has been a member the EU and knows how it works, knows that they have to come up with proposals and get approval from member states. The EU will not present a fait accompli and Lord Frost knows that,” said the political insider.

The EU’s Brexit commissioner, Maroš Šefčovič, told senior MEPs on Wednesday he would be ready to present a package of proposals to the UK in “10 days”. It is understood that while the UK government is still demanding a comprehensive renegotiation of the protocol, they will not dismiss the ideas out of hand when Šefčovič comes forward.

The two sides have been in close contact and Whitehall believes Brussels has been more engaged since it published its command paper in July setting out the UK position.

Both sides regard the end of the year as the deadline for finding a compromise. But neither side is confident of avoiding a fresh crisis in relations.

EU sources said they believed the triggering of article 16 was a matter of “when, not if”.

A public row is expected by sources in Brussels to break at the end of November, once the Cop26 event in Glasgow has finished. “There is zero appetite to change the mandate and renegotiate and then go through ratification of a new protocol,” said one EU diplomat.