How the Windsor Framework is changing Northern Ireland’s trading system

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

The more than 100-page agreement – known as the Windsor Framework – determines the smooth operation of the so-called Northern Ireland Protocol, which has complicated relations between the EU and the UK and destabilized the region’s politics.

Although Northern Ireland will continue to comply with EU rules on trade in goods, the new implementation agreement sets out processes for trade, state aid and VAT policy to reduce the impact of the Irish Sea trade border created by the original agreement.

While Northern Ireland remains subject to EU law in areas where it is to be applied in the region, the deal takes steps to allay concerns in the mainly Protestant Unionist community that the protocol undermined the UK’s constitutional integrity.

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

Trade business: red-green bands

Goods coming from Great Britain to Northern Ireland will now be divided into two classes: goods bound for Northern Ireland (green bar) and goods bound for Ireland and the EU single market (red bar).

According to the EU, companies registering with the Trusted Trader System and using the green belt will “unprecedentedly reduce” customs paperwork. Goods in the red zone must undergo a full customs, food and animal health inspection.

For agri-food, the most heavily controlled goods, the EU adopts the UK’s public health standards, meaning that fresh meat and other goods can be brought into Northern Ireland. Must be labeled “Not for EU”.

By 2025, with the introduction of labels, the proportion of shipments subject to identity checks will decrease to 5 percent. The UK has agreed to share near-real-time customs data with the EU to detect evidence of fraud and take corrective action where necessary.

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British Prime Minister Rishi Sunak said the changes had “removed the sense of a border in the Irish Sea”, while an EU official spoke of a dramatic reduction in checks.

There will be no need for customs paperwork for packages from friends or family or from online deliveries from Great Britain, ending the aggravation for Northern Ireland residents. Businesses using authorized parcel carriers will use simplified customs procedures.

Northern Ireland importers of some types of British-made steel have had to pay duties since last year when the EU changed its quota rules. The store also notes this problem specifically in the case of steel.

Diagram showing the Windsor Framework of Trade

State aid and VAT

According to Article 10 of the protocol, any aid decision by the United Kingdom which may affect trade in goods from Northern Ireland must be referred to Brussels for approval. The United Kingdom saw this as an unnecessary infringement of its sovereignty.

Although Article 10 will remain in place, the UK government has said there will now be “rigorous tests” in place, effectively removing 98 per cent of Northern Ireland’s aid from the risk of being diverted to Brussels. “This will rule out all but the largest grants and those where companies do not have a material presence in Northern Ireland,” the UK said.

Another area that angered British ministers was Northern Ireland’s inability to accept domestic VAT rate changes, which Sun said was unacceptable as chancellor.

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These are now being extended to Northern Ireland, including political talismans: some reductions in alcohol taxes will now apply across the UK, including beer levied in pubs.

However, with the exception of property such as household solar panels, the UK cannot yet reduce the EU’s minimum VAT rates. The two sides agreed to draw up a list of goods on which the UK could impose lower rates of duty over the next five years.

The prospect of the region automatically having to implement a large amount of new or updated EU legislation in the future as set out in the protocol has long been a source of tension for Northern Ireland’s unionist community.

The deal seeks to remedy this by giving the Northern Ireland legislature an “emergency brake” in Stormont, which can be pulled in “exceptional circumstances” if 30 of the 90 members of at least two parties vote to block an updated EU single pass. market rules.

Under this ‘Stormont brake’, the challenged rules will not be applied until they have been discussed in Brussels and London. If Britain decides not to implement measures the EU still deems necessary at the behest of the Northern Ireland Assembly, the bloc could take targeted “restorative measures”.

London has announced it will legislate to ensure the government in Westminster takes Stormont’s demands into account if and when it pulls the emergency brake.

According to experts, the conditions of use were very strict. “It’s progress, but the new system only applies if the brakes are on,” said Catherine Barnard, professor of EU law at the University of Cambridge. “For the rest of the time, everything goes on as usual.”

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You feel part of the Union

EU rules created many bureaucratic barriers that unionists believed cut them off from the rest of their country.

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

Medicines approved for use in the UK can be sold in the region, even if they are not yet approved in the EU.

Finally, seed potatoes and crops banned for carrying disease are now free to move into Northern Ireland on the basis of a special phytosanitary label.

Constitutional dimension: the role of the EC

Leading Brexiteers and Unionists have called for an end to the European Court of Justice’s jurisdiction over Northern Ireland and the ECJ’s role as an enforcer of the Protocol.

The business does not achieve this; and it does not create a new dispute settlement mechanism, including international arbitration, as some leading Brexiteers wanted.

The British government has argued that the new ‘green belt’ trade system has significantly narrowed the scope of EU law applicable in Northern Ireland, meaning that the 1,700 pages of EU law enforced in the original deal will no longer apply in the region.

The government added that only 3 per cent of EU legislation applied in Northern Ireland. According to the command paper: “The applicable rules are only and only what is absolutely necessary to maintain the unique opportunity for Northern Ireland companies to sell their goods in the EU market.