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Northern Ireland Brexit Deal: A Favourable Development But Political Hurdles Still Lie Ahead

The United Kingdom (UK) and the European Union (EU) reached an agreement to amend the Northern Ireland (NI) Protocol, on 27 February 2023. After several months of talks over how the NI Protocol can be implemented, the UK and the EU have announced the 'Windsor Framework', agreeing on three main points - the smooth flow of trade within the UK, NI's place in the UK, and the sovereignty for the people of NI.

The Windsor Framework could put an end to years of discord between the UK and the EU and herald the start of a more constructive relationship with the EU, if it is approved by the UK parliament and where applicable also the EU-27 member states and the EU parliament. This is because the Framework clarifies the applicability of customs check requirements and EU laws, and provides NI with a break mechanism to fend off EU legislation. Moreover, thanks to the agreement, the UK government has committed to stop the Northern Ireland Protocol Bill introduced last year and the EU to withdraw the legal action against the UK.

Key Highlights
• If supported, the new Brexit deal on NI, the Windsor Framework, should reduce some trade uncertainties lingering since Brexit.
• The deal also clarifies the applicability of EU laws in NI and gives the NI Assembly power to stop EU legislation in NI under certain cases.
• However, it remains to be seen if the deal will get the support of the Unionists in Northern Ireland and the Conservative Brexiteers.

“The Windsor Framework has the potential to ease the trade tensions and solve some issues from the Northern Ireland Protocol, but its approval and implementation are not assured,” said Adriana Alvarado, Senior Vice President in the Global Sovereign Ratings Group.