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Geopolitics & Security

The Windsor Framework – What Has Been Agreed and What It Means for the Northern Ireland Protocol

Commentary1st March 2023

After months of intensive talks, the United Kingdom and European Union have unveiled an agreement on the Northern Ireland Protocol, called the Windsor Framework. This is not a new protocol or a fundamental rewrite of the current treaty. But the package announced this week is an improved deal that could substantively ease how the protocol will operate for businesses as well as individuals. It is a negotiating achievement that marks a turning point in the long road since Brexit for Northern Ireland.

When Boris Johnson, as prime minister, suggested in 2022 legislation that sought to rewrite the protocol, we at the Tony Blair Institute argued this was a step in the wrong direction and that the only way to fix problems associated with the protocol was through a negotiated solution, not a unilateral approach that failed to resolve genuine problems and antagonised Britain’s friends and allies. We put forward proposals for a negotiated compromise – some of which have been adopted by the UK and the EU, including the idea of treating goods based on their final destination, giving Northern Ireland’s elected representatives a greater role in governing the protocol and delivering the outcome through a carefully calibrated legal form that alters the practical effects of the protocol rather than renegotiating the treaty from scratch.

UK Prime Minister Rishi Sunak, unlike his predecessors Liz Truss and Boris Johnson, shifted away from a confrontational approach and moved towards a genuine resolution. In areas where neither Truss nor Johnson secured concessions from Brussels, Sunak has been successful. We also called on the EU to show maximum flexibility in order to reach an agreement. The bloc of 27 states has agreed to loosen its own rules to accommodate the special circumstances in Northern Ireland. Both sides deserve credit for the pragmatism they have demonstrated to find a compromise.

There Will Be Three Substantive Changes to How the Protocol Will Operate

There are three main elements of the new agreement: on the movement of goods from Great Britain to Northern Ireland; on Northern Ireland’s status with respect to value-added tax (VAT) and domestic subsidies; and on governance of the protocol going forward.

The first set of changes relate to checks required on goods moving into Northern Ireland from Great Britain. Previously, all products moving across the Irish Sea would have been treated mostly the same for regulatory and customs purposes, requiring customs declarations and certificates, such as an export-health certificate for animal products. This arrangement has never been fully implemented, however, because several grace periods have been in place to ease implementation. Under the new arrangements:

  • Goods staying in Northern Ireland for final sale will be exempt from most checks and requirements (in a “green lane”), while goods moving onwards to the Republic of Ireland and the rest of the EU will face the usual third-country checks (in a “red lane”).

  • To benefit from easier customs processes, businesses will have to register for the trusted trader scheme and provide a description of goods moving to Northern Ireland, but they will avoid costly customs declarations.

  • For more sensitive goods, such as agri-food, some certification requirements will remain and physical checks can take place at sanitary and phytosanitary inspection facilities at Northern Irish ports and airports.

  • Medicines will be subject to dual regulation by both UK and EU authorities.

  • Pets can be moved between Great Britain and Northern Ireland without an additional passport and personal parcels sent without extra paperwork.

The second set of changes relate to the issue of Northern Ireland’s VAT and state-aid status. This mostly technical issue has political resonance because it touches on the contentious matter of how differently Northern Ireland is treated from the rest of the UK. Previously, EU VAT and state-aid requirements applied to Northern Ireland. Under this deal:

  • EU VAT requirements for Northern Ireland have been loosened, bringing Northern Ireland’s VAT status into greater conformity with the rest of the UK.

  • EU state-aid rules will continue to apply to Northern Ireland, but the scope of reliance on EU subsidy rules has been restricted by a joint declaration agreed between London and Brussels.

The final set of changes relate to the politically sensitive issue of how the protocol is governed and who enforces the agreed rules.

The European Court of Justice (ECJ) will continue to maintain direct jurisdiction over EU laws applied under the protocol and Northern Ireland’s courts will continue to refer questions of EU law to the ECJ through the usual preliminary reference procedure, just as today. Ultimately, from the perspective of Northern Ireland’s businesses and investment climate, this is a good outcome: if the rights of companies become infringed, they are guaranteed the same remedies as anyone else going through similar litigation in EU courts.

One of the biggest changes concerns a role for Northern Ireland’s institutions in the protocol. It has been agreed that:

  • Stormont will now be given the opportunity to vote on EU laws that were previously amended or updated automatically under the protocol, under a so-called “Stormont brake”.

  • The Stormont vote can be triggered in the same way as a petition of concern – by at least 30 Members of the Legislative Assembly (MLAs) from at least two parties. After the “veto” has been subsequently raised by the UK government at the Joint Committee, the new EU rule has to be approved by a cross-community vote in the Assembly. This process is subject to further consultation with NI political parties. 

  • The “brake” can be used only in exceptional circumstances and MLAs have to demonstrate that the change will “significantly impact everyday life”.

  • The UK government can use Stormont’s decision to adopt or refuse a new EU law at the Joint Committee, a UK-EU body responsible for managing the treaty.

  • To prevent abuse of this mechanism, if the EU deems that the “Stormont brake” has been used unjustifiably or the tests for its use have not been met, the EU could take the UK to arbitration and impose targeted “remedial measures”.

The UK Has Secured Several Important Concessions, But There Are New Obligations Too

In negotiating this package, both sides have moved on some of their previously held positions.

The UK’s most significant concession secured from the EU is on the movement of goods. Brussels has shifted from its rules-based stance on implementing EU regulations in Northern Ireland to more risk-based and proportionate controls, accepting the principle that the final destination of goods determines the level of risk and that goods staying in Northern Ireland can be treated differently to those that move onwards to the single market. This is a prize that the EU had previously refused to grant former UK leader Theresa May during the first negotiation in 2018 and Boris Johnson during the 2019 renegotiation.

On the other hand, Brussels has defended its position that the ECJ, as the final arbiter of EU law, maintains direct jurisdiction over EU rules applying to Northern Ireland under the protocol.

But the concessions that Sunak has secured are not for free. In return for Brussels putting an unusual level of trust in a third country’s ability to enforce delicate border arrangements that control the flow of goods into its own market, the new arrangements are subject to robust safeguards. These allow the European Commission to ramp up inspections if the UK fails to abide by its obligations in the future. There are also new obligations to share near real-time data on the movement of goods, as well as to press on with building border-control posts for the red-lane goods in Northern Irish ports.

Most importantly in the short term, the UK prime minister has agreed to withdraw the controversial Northern Ireland Protocol Bill – legislation introduced by Boris Johnson to unilaterally rewrite the protocol through primary legislation.

Two Uncertainties Loom Over the Deal – One Political and Another Practical

The immediate question for the UK prime minister is whether this will lead to the restoration of Northern Ireland’s governing institutions, for which he needs the approval of the unionist community and particularly the Democratic Unionist Party (DUP).

The DUP, who have previously refused to support any deal that would treat Northern Ireland differently to the rest of the country, can now claim a number of significant concessions – including the right to refuse to adopt future EU laws at Stormont. But if they refuse to lend their support to the prime minister, they are unlikely to secure further concessions at least before the next general election, as  Brussels and European capitals have no appetite for reopening the talks.

The nature of the current arrangements also means that the politically sensitive question of EU law is unlikely to disappear from Northern Irish politics. The “Stormont brake” usefully injects more transparency into future EU rules that will be adopted, but at the cost of giving unsatisfied parties an opportunity to reignite hostility towards the EU. If some parties remain unsatisfied with ongoing arrangements when MLAs are asked to vote on the protocol for the first time (due to take place before the end of 2024), the risk is that the protocol might become a thorny issue in Northern Irish politics again.

On the practical side, there is a question about the durability of the new arrangements in the face of growing regulatory divergence in Great Britain.

The further Great Britain moves away from regulatory standards previously inherited from the EU – as the present government is seeking to do through the controversial Retained EU Law Bill – the larger the risk of future barriers with Northern Ireland. The amended protocol does, helpfully, include a new mechanism for dealing with divergence through technical negotiations. But there is a risk that the mutual trust on which this delicate compromise is based will be undermined by regulatory divergence perceived as endangering the integrity of the single market within Brussels and European capitals. At the end of the day, the only credible way for the regulatory gulf to close is if Great Britain stays as close to the rules of the European single market as practically possible.

Ultimately, the protocol is an ever-evolving agreement. As the new arrangements come into effect, managing the ongoing political and practical risks will require close and constructive cooperation between the UK and the EU. The greater mutual trust between the two sides and the greater their mutual understanding of how to interpret the protocol, the easier it will be to resolve the future disagreements bound to arise through consensual means. Remove that trust and the agreement will crumble.

The Prize of the Windsor Deal Is Stability in Northern Ireland and a Reset in Relations With the EU

Whatever criticism may be aimed at it, the Windsor Framework is significantly better than the status quo, which has fuelled political instability and uncertainty for Northern Irish business.

If Sunak succeeds in pushing through his agreement, his prize will be better relations with Europe and the US. The deal will unlock progress on a number of frozen issues with Brussels, such as the UK’s participation in the Europe-wide Horizon research programme and a regulatory cooperation framework with Brussels for the City of London. With enough political will, it could deepen cooperation on mutual interests such as energy security, foreign policy and defence. It will also make Sunak a more credible actor with the Biden administration in the US.

But most importantly, the value of this deal lies in bringing about legal certainty for businesses and investors, political stability and resolving most practical problems caused by Brexit for the people and communities of Northern Ireland. For these reasons, this deal should be supported by all parties.

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