By Emil Bjerg, journalist and editor of The World Financial Review
It looked like an impossible task for years, but now Rishi Sunak has succeeded with something the other post-Brexit Tories haven’t: a post-Brexit framework for North Ireland trade.
“Today’s agreement delivers smooth-flowing trade within the whole United Kingdom, protects Northern Ireland’s place in our union, and safeguards sovereignty for the people of Northern Ireland,” Rishi Sunak said in a joint press conference with the president of the European Commission, Ursula von der Leyen. A press conference that The Conversation called “the friendliest joint EU-UK press conference anyone can remember since at least 2016“.
The framework is yet to be voted for in the British parliament, but it is expected to pass easily later in March. For the Conservatives, the framework is a rare victory, and in the eyes of Labour, the party welcomes the agreement as it believes it’s “clearing up its own mess over Brexit.”
Later in this article, we’ll examine how Rishi Sunak managed to secured a deal with the EU. First, let’s look at the new deal’s practicalities and implications.
Green Lane, Red Lane: how the new framework works
Trade between Northern Ireland and England has been complicated by Northern Ireland’s unique status as a non-EU member, which is part of the EUs single market as well as a country in the UK. The new framework takes into consideration Northern Ireland’s unique circumstances.
It does so by creating a regulated trade system with a red land and a green lane for products shipped from England to Northern Ireland. The red lane is for products entering Ireland or other EU countries, and the green lane is for goods with Ireland as their destination. While goods in the red lane must undergo full customs, the new green lane frees merchants for several checks. After Brexit, all goods entering Northern Ireland from the UK have undergone checks.
Businesses using the new green lane must register as trusted traders under the new regulatory body United Kingdom Internal Market Schemes (UKIMS). Large companies, such as supermarkets and other import-heavy commerce that are already a part of an existing scheme will be transferred to UKIMS automatically.
Following the announcement, The European Commission writes: “The new arrangements mean that moving goods from Great Britain to Northern Ireland will now be vastly
simplified, benefitting citizens and businesses in Northern Ireland alike. At the same time, they will continue to benefit from their unique access to the EU Single Market for goods”.
Stormont Brake – a new Northern Ireland agency in the EU?
A new mechanism called Stormont Brake has been introduced as part of the Windsor Framework. According to the Institute for Government, the Stormont Brake “is a mechanism that gives the Northern Ireland Assembly the power to object to changes to EU rules that apply in Northern Ireland.” It is passed as a part of the framework to alleviate the “democratic deficit” in Northern Ireland, which has EU laws that apply to them without having any representation in the policy-making process.
Experts have said, however, that the conditions for applying this measure are highly stringent. Catherine Barnard, professor of EU law at the University of Cambridge, says, “if you look under the bonnet, the conditions for its use are so strict it makes it virtually unusable.” Instead, the Windsor Framework is more likely to benefit the Nothern Irelanders as a well-crafted improvement to the Nothern Ireland Protocol.
An update to the controversial Northern Ireland Protocol
The Windsor Framework is a much-needed update to the North Ireland Protocol, which the British government recently said had been “the source of acute political, economic, and societal difficulties.”
In October 2019, the primary objective of the Northern Ireland Protocol, an initial agreement, was to prevent a hard customs border between north and south in Ireland. However, to safeguard the EU’s Single Market, since Brexit, it has been necessary to check British goods entering North Ireland to ensure that non-standard products did not enter the Republic and the European Single Market, thus creating a de facto hard customs border in the Union.
The added bureaucracy and halt to supply chains have caused substantial frustrations among Brits, Northern Ireland traders, and Northern Ireland unionists. Northern Ireland traders can look forward to substantially reducing paperwork with the green-red lanes.
What does the framework mean for businesses and international trade?
Brexit has caused a range of halts to supply chains in Britain. In fact, in a 2022 survey, amid the war in Ukraine and rising energy costs, four out of five businesses considered Brexit as their “biggest supply chain disruptor over the past 12 months“.
While The Windsor Framework doesn’t solve the primary part of British supply chain disruptions, it does reduce the risk of an EU-UK trade war. Without the framework, a UK government could decide to rewrite the Northern Ireland Protocol like Lis Truss planned during her short term as prime minister. A change to the protocol without EU involvement would be perceived as a breach of the Brexit Withdrawal Agreement and retaliatory steps like suspending the post-Brexit trade agreement. The compromise between the EU and UK drastically reduces the risk of a trade war at a time when both the EU and the UK have a significant amount of worries.
From a Northern Ireland perspective, the new agreement means local businesses and consumers can expect relief and a more extensive supply of UK goods on supermarket shelves.
A new way forward for the EU and the UK?
“These negotiations have not always been easy,” Rishi Sunak said before paying an “enormous personal tribute to Ursula for her vision in recognizing the possibility of a new way forward.” “This is the beginning of a new chapter of our relationship,” Sunak said.
Brexit and Brexit agreements have been the hybris and nemesis of several British conservative leaders since David Cameron announced the referendum in 2013. Cameron resigned after the referendum’s shocking result in 2016. A few years later, Theresa May left after her attempt at a Brexit deal, the Chequers plan, had failed.
Boris Johnson toured with “Get Brexit Done” for years, but Sunak might finally have gotten it done with the Windsor Framework to give “the best week the Conservative party has had in the last year.” So how did the current PM succeed in making a deal when his predecessors didn’t?
Part of the reason could be that Sunak’s style of softer bargaining is a more efficient way to reach agreements after the Brits were the ones to leave the union. While Boris Johnson went to Brussels with a highly confident approach to Brexit negotiations, Theresa May was known as a hard bargainer before him. Those negotiation styles can be counterproductive if you overplay a weak hand.
Robert Buckland, a Northern Ireland Affairs Committee member, argues that Sunak’s ability to create a relationship of trust with leading EU officials has made the framework possible. “If you get on well with people and when there’s trust, then I think it’s all our experience that more business can be done,” he said.
Ursula von der Leyen stressed the good intentions behind the framework as she said it was “made possible by genuine political will and hard work guided by the fundamental principle that the interests and needs of people should always come first.” Further, von der Leyen said that the agreement turns “the page towards a bilateral relationship that mirrors the one of close allies standing shoulder to shoulder in times of crisis.”
The conciliatory signals come at a troubled time from the perspective of the British economy.
British economy after Brexit: a sense of ‘Bregret’
The Windsor Framework happens amid years-long chaos in the British economy. In the years following UK’s exit from the EU, Britain and the rest of Europe have been overwhelmed with a series of challenges – a pandemic, an energy crisis, and war on the European continent. That makes it difficult to isolate the exact impact of Brexit itself.
However, there are strong signals of Brexit having a drastic impact on the British economy. According to research by the Centre for European Reform, by the second quarter of 2022, Brexit had “reduced GDP by 5.5%, investment by 11%, and goods trade by 7% in the second quarter of 2022“. Britain is the only country in the G7 the IMF predicts will have a shrinking economy in 2023.
When the UK left the EU in 2020, it was with then prime minister Boris Johnson’s promise that Britain would “rediscover the muscles that we have not used for decades“. Instead, according to CNBC, for many Brits, Brexit has turned into ‘Bregret‘ as 45 percent say that Brexit has worsened their daily life, while only 11% say the European exit has improved their everyday life.
With the Windsor Framework, at least the Nothern Irelanders can get relief from their Bregret, while both the EU and the UK can look ahead with a new and more positive approach to bilateral coorporation.
