How the ‘Windsor Framework’ changes N Ireland’s trading arrangements

After months of secret negotiations the UK and the EU on Monday published the text of their new deal to refine post-Brexit arrangements for Northern Ireland.

Totalling more than 100 pages, the deal — called the Windsor Framework — sets out ways to smooth the working of the so-called Northern Ireland Protocol, which has soured EU-UK relations and destabilised the politics of the region.

Although Northern Ireland continues to follow EU rules for goods trade, the new implementation agreement sets out processes on trade, state subsidy and value added tax policy to reduce the impact of the trade border in the Irish Sea created by the original deal.

While Northern Ireland remains subject to EU law in areas where it applies in the region, the deal takes steps to address concerns in the mainly Protestant unionist community that the protocol has undermined the constitutional integrity of the United Kingdom.

The new framework aims to improve the functioning of the protocol in five key areas:

The business of trade: red-green lanes

Goods coming from Great Britain to Northern Ireland will now be divided into two classes: those that are destined for Northern Ireland (green lane) and those heading on to Ireland and the EU single market (red lane). 

Companies that register for a trusted trader scheme and use the green lane will have “an unprecedented reduction” of customs paperwork, the EU said. Goods in the red lane will have to go through full customs, food and animal health checks.

For agri-food, the most tightly controlled goods, the EU will accept UK public health standards, meaning fresh meat and other goods will be allowed to enter Northern Ireland. They must carry “not for EU” labels.

As the labels are introduced between now and 2025 the proportion of consignments subject to identity checks will fall to 5 per cent. The UK has agreed to share near-real time customs data with the EU so it can spot evidence of fraud and take remedial action if necessary.

UK prime minister Rishi Sunak said the changes “removed any sense of a border in the Irish Sea”, while an EU official talked of a “dramatic reduction in the number of checks”.

Parcels to friends or family and from online deliveries from Great Britain will not require customs paperwork, ending another significant source of aggravation for Northern Ireland residents. Businesses using approved parcel carriers will have simplified customs procedures.

Importers of some types of British-made steel in Northern Ireland have had to pay tariffs since last year when the EU changed its quota rules. The deal also fixes this issue for steel specifically.

State aid & VAT

Under Article 10 of the protocol, any UK subsidy decision that might affect Northern Ireland goods trade must be referred to Brussels for approval. The UK viewed this as an unnecessary impingement on its sovereignty.

Although Article 10 remains in place, the UK government said “stringent tests” would now apply, effectively removing 98 per cent of Northern Ireland subsidies from being at risk of referral to Brussels. “This rules out all but the largest subsidies and those where firms have no material presence in Northern Ireland,” the UK said.

Another area of difference that riled British ministers was that Northern Ireland could not adopt domestic VAT rate changes, something Sunak said was unacceptable when chancellor.

These will now be extended to Northern Ireland, including politically talismanic items: some cuts to alcohol duties will now apply UK-wide, including relief for beer in pubs.

However, except for immovable objects such as household solar panels, the UK cannot undercut EU minimum VAT rates for now. The two sides have agreed to draw up a list of goods where the UK could impose lower rates over the next five years.

For Northern Ireland’s unionist community, the prospect that the region would have to automatically implement large amounts of new or updated EU law in the future, as specified in the protocol, has long been a source of tension.

The deal seeks to address this by handing an “emergency brake” to the Northern Ireland legislative assembly at Stormont that can be pulled in “exceptional circumstances” if 30 of the 90 members from at least two parties vote to block the adoption of updated EU single market rules.

Under this ‘Stormont brake’, rules that are subject to objection will not be applied until they have been discussed by Brussels and London. If Britain decides not to implement measures that the EU still deems necessary at the behest of the Northern Ireland assembly, the bloc could take targeted “remedial measures”.

London has said it will legislate to ensure that the Westminster government takes account of Stormont’s demands if and when it pulls the emergency brake.

Experts said the circumstances when it could be used were very tightly drawn. “This is progress, but the new system only applies when the brake is pulled,” said Catherine Barnard, EU law professor at Cambridge university. “For the rest of the time it is business as usual.”

Feeling part of the Union

EU rules had created a number of bureaucratic hurdles that unionists believed cut them off from the rest of their country.

Pets had to be microchipped and get a passport to travel from Great Britain to Northern Ireland — the same rules needed to travel to the EU. Under the deal, pets will only need a simple travel document.

Medicines approved for use in the UK could also be sold in the region even if not yet approved in the EU.

Finally, seed potatoes and plants banned from being imported because they might carry disease can now move freely to Northern Ireland on the basis of a special plant health label.

The constitutional dimension: the role of the ECJ

Leading Brexiters and unionists have demanded an end to the jurisdiction of the European Court of Justice over Northern Ireland, and to the ECJ’s role as the enforcer of the protocol.

The deal does not achieve this; nor does it create a new dispute resolution mechanism involving international arbitration, as some leading Brexiters had wanted.

The UK government argued the new “green lane” trading system significantly narrowed the amount of EU law applying in Northern Ireland, meaning 1,700 pages of EU law that were enforced in the original deal will no longer apply in the region.

The government added only 3 per cent of EU laws were now applicable in Northern Ireland. According to the command paper: “The rules that do apply are there solely, and only as strictly necessary, in order to maintain the unique ability for Northern Ireland firms to sell their goods into the EU market.”

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