The Windsor Framework: What will it mean for post-Brexit trade?

Brexit | | MIC Customs Solutions |

What provisions does the recently-announced Windsor Framework have to ease trade barriers between Great Britain, Northern Ireland and the EU?

Last month, the UK and EU announced a long-awaited deal to overhaul trading arrangements in Northern Ireland with a new agreement that should result in fewer checks and paperwork for traders shipping goods across the Irish Sea.

The arrangement is known as the Windsor Framework and was unveiled at a joint press conference with UK prime minister Rishi Sunak and European Commission president Ursula von der Leyen. It signals a major step forward on one of the biggest post-Brexit sticking points and should - for now at least - head off the potential for a full scale trade war between the two parties.

So what will the new rules mean for traders, and how do they aim to make it easier for goods to travel from Great Britain to Northern Ireland and beyond?
What are the key elements of the agreement?

Among the headline provisions of the framework are the introduction of two new systems for traders shipping goods from Great Britain to Northern Ireland, depending on whether they are set to stay in the province or move on to the EU. 

For items remaining in the UK, there will be a new 'green lane', which will allow them to move through Northern Irish ports with no physical checks and much-reduced paperwork. Those heading on into the Republic of Ireland, and therefore into the EU, will be required to go through a 'red lane', where full customs checks will be carried out.

In order to achieve this, there will be expanded data sharing between the UK and EU customs authorities, while new inspections and labeling requirements will be used only for goods moving through the red lane.

This aims to eliminate many of the practical and political difficulties with the current arrangement, which essentially places a customs border between Great Britain and Northern Ireland in the Irish Sea.

It matters because an open border between Northern Ireland and the Republic is essential in order to ensure the continuation of the Good Friday Agreement. However, this means that, unlike the rest of the UK, the province remains de facto in the single market for customs purposes.

Other elements of the framework aim to address many of the political challenges Northern Ireland's unique situation in both the UK and the single market presents. It will see large elements of EU law that still apply in Northern Ireland removed.

What will the deal mean for cross-border traders?

A major change should be a significant reduction in paperwork and customs requirements when entering Northern Ireland. At present, all shipments are subject to a visual inspection to confirm the identity of the goods. According to the UK government, this is expected to be reduced to just five percent by 2025, significantly speeding up the process for most items. 

The UK also noted that, under the existing rules, a single supermarket truck would have had to provide as many as 500 certificates describing each individual product. However, the shipper can now instead make a single certification to confirm that the goods will stay in Northern Ireland.

Physical checks on green lane shipments are only expected to be performed in exceptional circumstances, such as where it is suspected the scheme is being abused. 

A range of items that may have been banned from being shipped from Great Britain to Northern Ireland under the old protocol, including chilled sausages, will also be permitted to move freely between GB and NI. Meanwhile, the pharmaceuticals sector will be able to produce a single medicines pack for the whole of the UK, including Northern Ireland.

What new requirements are being brought in?

Chief among the new regulations are the introduction of new labeling requirements, particularly for food and drink items. It will mean any agri-food items destined for the Northern Ireland market must carry a 'Not for EU' label at the appropriate level. 

For example, prepackaged meat and fresh milk will need to be individually labeled, while goods sold loose such as fresh fruit need only to be labeled at box level. Easily visible signs and posters will also need to be placed next to the price tag on the shelves in the supermarkets so consumers know that the goods are not for the EU.

By July 1st 2025, all retail items not sold loose will require individual labels, except those not subject to official controls at EU border posts, such as confectionery, chocolate, pasta, biscuits, coffee, tea, liqueurs and canned fruit and vegetables.

To ensure rules are followed, several safeguards will be brought in. These include near real-time data sharing between UK and EU customs agencies, providing for the monitoring of the movement of retail goods, traceability and listing of the dispatching and receiving authorized establishments. 

The framework also includes provisions that allow for the full or partial suspension of new rules if either specific problems or systemic failures in compliance occur.

What potential roadblocks may lie ahead?

While the Windsor Framework promises a much more streamlined regime for goods trade between Great Britain, Northern Ireland and the EU over the Irish Sea, there remain hurdles ahead. Mostly, these relate to political concerns about the status of Northern Ireland in the union and what influence the EU will have on its laws. 

The implementation of a 'Stormont Brake' that will give Northern Ireland's devolved assembly the ability to veto any measures of concern should help alleviate some of these issues, though it remains to be seen whether key players such as the Democratic Unionist Party will come on board.

However the EU is hopeful that progress can be made, and could formally adopt some aspects of the framework by the end of March.