The Northern Ireland Protocol as it was originally designed is a “little too strict”, the Tánaiste has said.
Leo Varadkar said the protocol was working despite it not being fully implemented, demonstrating there is room for “further flexibility for some changes”.
He added that a “window of opportunity” now exists for agreement to be reached between the EU and the UK.
His remarks come as negotiations between officials on the protocol are due to get under way later today.
The European Commission earlier this week confirmed the two sides will meet for technical level talks.
A meeting between Minister for Foreign Affairs Simon Coveney and UK foreign secretary James Cleverly is scheduled to take place in London this evening ahead of Mr Coveney co-chairing a British-Irish Intergovernmental Conference with Northern Ireland Secretary Chris Heaton-Harris on Friday.
Speaking in Dublin, Mr Varadkar said: “We should not forget that the protocol is working. It was designed to prevent a hard border between north and south, and there is no hard border between north and south.
“It was designed to protect the integrity of the single market and it has, and also the Northern Ireland economy is outperforming the rest of the UK economically.
“But one thing that I would concede is that perhaps the protocol, as it was originally designed, was a little too strict.
“The protocol has not been fully implemented and yet it is still working.
“I think that, you know, demonstrates that there is some room for further flexibility for some changes that hopefully would make it acceptable to all sides.”
The protocol was agreed by the UK and EU as part of the Withdrawal Agreement and sought to avoid a hard border with Ireland post-Brexit.
But the arrangements have created trade barriers on goods being shipped from Great Britain to Northern Ireland.
The protocol is vehemently opposed by many unionists in Northern Ireland and the DUP is currently blocking the formation of a powersharing executive in Belfast in protest.
Mr Varadkar said an agreement would be “very beneficial” as it would allow for the restoration of powersharing in Northern Ireland.
Stormont collapsed earlier this year amid a row over the protocol and has not returned despite elections in May.
Speaking after an industrial relations conference at University College Dublin, Mr Varadkar also told reporters: “There is a window of opportunity now over the next couple of weeks to see if we can come to an agreement on the protocol.
“That would be very beneficial for Ireland and Northern Ireland because it would allow us to get the executive up and running, and could be helpful for Britain as well in economic terms.”
The Tánaiste welcomed the UK’s Northern Ireland Minister Steve Baker’s apology over his previous “ferocious” negotiating stance on Brexit but said it would remain to be seen if they would prove to be significant.
Mr Baker, a former strident Brexiteer and member of the pro-Brexit European Research Group of MPs, said relations with Ireland are not “where they should be”, and added that ministers need to act with “humility” to restore relationships with the Republic and the EU.
Mr Varadkar said: “It remains to be seen what the significance of them are, but they are very welcome comments and (I) would agree with the Taoiseach on that.”
Asked about the political instability surrounding UK prime minister Liz Truss, he said the Irish Government does not concern itself with the UK’s domestic politics.
“That’s just not the way we operate. Liz Truss is the prime minister, and the British government is the British government, and the European Union, including Ireland will negotiate with them and try and come to an agreement if we can,” he said.
“We won’t concern ourselves about any individual country’s domestic politics.”
Legislation to enable the UK Government to effectively tear up parts of the protocol is to return to Westminster on October 11th.
The Northern Ireland Protocol Bill has already cleared the House of Commons and will be debated at second reading by the House of Lords, which is expected to consider it at length, next week.