The Windsor Framework – More than a regional agreement
Last week we saw the Windsor Framework, agreed by the Prime Minister and European Commission President, replacing the old Northern Ireland Protocol, providing a new legal and UK constitutional framework.
The UK government states that “It delivers free-flowing trade in goods between Great Britain and Northern Ireland by removing any sense of the border in the Irish Sea for goods staying within the UK. These goods will travel as normal through a new green lane without red tape or unnecessary checks, with the only checks remaining designed to prevent smuggling or crime.”
The devil is always in the detail and what we can see is that the framework should deliver the free-flowing movement of goods between Northern Ireland and Great Britain:
A new green lane (the UK internal market scheme) means traders moving goods destined for Northern Ireland will be freed of unnecessary paperwork, checks and duties, using only ordinary commercial information rather than burdensome customs bureaucracy or complex certification requirements for agrifood. All goods destined for the EU will use the red lane.
All requirements have been removed for trade from Northern Ireland to Great Britain on a permanent basis, including the requirement for export declarations.
The green lane will be expanded to include food retailers such as supermarkets and hospitality businesses, significantly reducing Sanitary and Phytosanitary (SPS) checks and paperwork and ensuring choice for consumers on supermarket shelves. A supermarket lorry (who previously had to provide many certificates) can now make a straightforward commitment that goods will stay in Northern Ireland. Retailers will mark goods as “not for EU”, with a phased rollout of this requirement to give them time to adjust.
Chilled meats like sausages, which were banned under the old Protocol, can move freely into Northern Ireland like other retail food products.
Parcels from people or businesses in Great Britain can now be sent to friends, family, and consumers in Northern Ireland as they are today, without customs declarations, processes or extra costs under the old Protocol. Parcels sent business to business will travel via the green lane.
Under the current protocol, some EU law applies in Northern Ireland, but politicians have no way to influence the rules, the new agreement reduces the proportion of EU rules applied in Northern Ireland to less than 3%. The European Court of Justice continues to be the final arbiter in disputes over these remaining rules. The framework introduces a "Stormont brake" which allows the Northern Ireland Assembly to raise an objection to a new goods rule. The process would be triggered if 30 Member of the Legislative Assembly (MLAs) from two or more parties sign a petition. The brake cannot be used for "trivial reasons" but reserved for "significantly different" rules.
UK VAT and excise rules will apply to Northern Ireland for alcoholic drinks for immediate consumption and immovable goods such as heat pumps; EU VAT rules will still apply for other items.
The UK government has confirmed it is scrapping the Northern Ireland Protocol Bill. Legal opinion published by the government says there is now "no legal justification" for going ahead with it after the new agreement.
In the wider scheme, this framework, if approved by all parties, can be considered good news for Northern Ireland and the UK as a whole.
In a White House statement, US President Joe Biden has hailed the UK and EU for reaching a deal on the protocol with the framework and has stated “I am confident the people and businesses of Northern Ireland will be able to take full advantage of the economic opportunities created by this stability and certainty, and the United States stands ready to support the region’s vast economic potential.”
Northern Ireland is now the only part of the UK which is essentially back to its “Pre-Brexit” trading status. The region could become a hub of new investment and a prime location to set up or grow a business with market access to both the EU and UK.
Ursula von der Leyen, European Commission President, described the framework as “good news for scientists and researchers in the EU and in the UK”, leading many to speculate the UK’s re-entry into the Horizon scheme, the continent-wide science research programme.
If the UK and the EU are now in a “closer” relationship then many in the financial services sector will be hoping for “Equivalence” with the EU on rules so that the EU will grant domestic market access to UK financial services companies, who were excluded under the original Brexit deal. The UK has already granted equivalence in 22 areas to European Economic Area (EEA) companies.
See: Windsor Framework unveiled to fix problems of the Northern Ireland Protocol - GOV.UK (www.gov.uk)
