The European Union and the United Kingdom both welcomed progress in post-Brexit negotiations over how trade would be handled under the Northern Ireland protocol, with both sides expressing renewed optimism about a deal that could avert a trade war.

“Intensive and constructive talks have proceeded between the U.K. and EU teams,” U.K. Brexit minister David Frost said in a statement Friday after meeting with chief EU negotiator Maros Sefcovic. “There is the potential to generate some momentum in our discussions.”

Sefcovic stated that progress has been made on how medicines will be handled under the protocol, but the EU is still waiting for the UK government to move toward its positions on other key issues. “We now need to press on and get this crucial issue across the line,” Sefcovic said Friday. “This is a real test of political goodwill.”

Brexit minister Lord Frost, flanked by paymaster general Penny Mordaunt, sitting opposite European Commission vice-president Maros Sefcovic, who is flanked by Richard Szostak, principal adviser, Service for the EU-UK Agreements, at the first EU-UK partnership council meeting at Admiralty House in London in June this year

The pair agreed to meet again in London on Nov. 26, with Frost saying “significant gaps remain across most issues.”

Earlier in the day, U.K. minister Michael Gove stated that the government is "confident" it will avoid invoking Article 16 of the protocol, which allows either party to suspend parts of the agreement, as it seeks to change how Northern Ireland trade is managed in the aftermath of Brexit.

While “it’s always possible that Article 16 may require to be invoked, we’re confident that we’ll be able to make progress without it,” he said at an online news conference.