There is mounting speculation that the UK and EU could unveil a deal aimed at breaking the impasse over the contentious post-Brexit trading arrangements early next week.
The Prime Minister is expected to meet with European Commission President Ursula von der Leyen on the fringes of the Munich Security Conference on Saturday to try to get an agreement over the line.
But ahead of his trip to Germany, Mr Sunak stressed that “there’s more work to do” as he vowed to continue “intensely” negotiating with the EU.
“We have not got a deal yet,” he told reporters in Downing Street on Friday.
“That’s why both the Foreign Secretary and I, but also the Secretary of State for Northern Ireland, will continue talking to the European Union to try and find solutions to protect Northern Ireland’s place in our internal market and the Belfast Good Friday Agreement, resolve the practical issues and address the democratic deficit.”
The term “democratic deficit” is used by Northern Ireland unionists to describe the application of EU rules in the region without local politicians having an influence on them.
Mr Sunak said he had “positive conversations” with the five main Stormont parties in Belfast on Friday.
However, he was warned by the DUP leader that his proposed deal did not go far enough.
Sir Jeffrey Donaldson said it appeared “real progress” had been made in negotiations, but reportedly added that Mr Sunak’s proposal “currently falls short of what would be acceptable” to the party.
The Prime Minister is likely to push EU leaders for further concessions on the oversight role of the European Court of Justice, but this could prove a major stumbling block.
Any compromise over the court’s jurisdiction could fail to persuade the DUP and Eurosceptic Conservative MPs in the European Research Group (ERG) to accept the deal.
A potential intervention by Boris Johnson, who negotiated the protocol as part of his Brexit deal, raised fears of a Tory rebellion when the changes are put to a vote in Parliament. But an ally of the former prime minister guided away from the prospect.
ERG deputy chairman David Jones told The Times there had been no dialogue with No 10.
“If the situation remains that Northern Ireland is automatically absorbing a large quantity of EU law without input from elected representatives and is still subject to the European Court of Justice it won’t resolve the difficulties,” he said.
The UK and the EU have been engaged in substantive negotiations over the workings of the protocol, which was included in the Withdrawal Agreement to ensure the free movement of goods across the Irish land border after Brexit.
The protocol instead created economic barriers on trade being shipped from Great Britain to Northern Ireland.
It has proven to be deeply unpopular with unionists, who claim it has weakened Northern Ireland’s place within the UK, and the DUP has used a Stormont veto to collapse the powersharing institutions in protest at the arrangements.
Sir Jeffrey said any deal had to meet the seven tests set out by his party – the key condition for restoring an executive at Stormont.