Ireland has said it is hopeful that the common travel area allowing freedom of movement between Northern Ireland and the Republic will survive Brexit talks.

The country’s ambassador to the UK, Daniel Mulhall, told a House of Lords select committee on Tuesday that he was satisfied the country’s EU partners would “not want to create unnecessary problems for Ireland” because they recognise the “unique circumstances” involved in the region.

Irish and British citizens currently have special status in each other’s countries with full rights to live, work and vote without abandoning citizenship of their country of birth. But fears have been expressed that this arrangement would be at risk post-Brexit as the Northern Ireland border would automatically become an external EU border.

Mulhall, a former ambassador to Germany and first secretary in Brussels, told the Lords’ select committee on the European Union: “I have experienced from EU colleagues over the years a considerable understanding of the unique circumstances in Northern Ireland; there will be willingness on the part of our EU partners to be sensitive to any concerns that arise in relation to Northern Ireland.”

He also said he hoped that cross-border trade would remain customs-free.

Britain is Ireland’s largest trading partner and two-way trade between the countries stands at about £1bn a week, with an equal trading balance in imports and exports.

Mulhall said that economic ties to Northern Ireland had improved since the Good Friday agreement brought peace, but that there was still a long way to go.

In normal circumstances, trading partners on one island would have an “intense” relationship, and while trade has improved between the Republic and Northern Ireland, “there was still a long way to go” he said.

“I believe our EU partners … would be very slow to do anything that would in any way cut across or create difficulties for north/south relations as they develop as part of our peace process.”

Mulhall said that anything that got in the way of the potential economic development would be unwelcome. He hinted that Ireland would be lobbying for closest possible relationship between Britain and the EU in negotiations, but said it could not act as a “broker” as Ireland remained, and wished to remain, part of the EU. “Our interests are in the future evolution of the EU,” he said.

Separately, legal experts called on the government to introduce new legislation that would ensure “stage by stage” scrutiny of Brexit talks by parliament.

Derrick Wyatt QC, emeritus professor of law at Oxford University, told the committee that current rules under the Constitutional Reform and Government Act 2010, did not allow for scrutiny of the process as it took place.

It was “just not right” for negotiations to be presented “as a fait accompli” to parliament after being negotiated behind closed doors, he said.

Wyatt said scrutiny should be used to encourage the government to “think outside the box” and to “test their own internal advice”.