The European Union and the U.K. both welcomed progress in post-Brexit talks over how trade would be handled under the Northern Ireland protocol, with both sides signaling new 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 said there was progress over how medicines would be handled under the protocol but the EU is waiting for the U.K. government to move toward its positions on other key areas.

“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.”

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 said the government is “confident” it can avoid triggering Article 16 of the protocol, which allows either side to suspend parts or all of the agreement, as it seeks to change how Northern Ireland trade is managed in the wake 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.

The comments are among the most optimistic that the U.K. and EU can reach an accord that will resolve issues with the protocol without invoking Article 16, which would effectively set aside parts of the agreement.