What is in the new post-Brexit trade deal on Northern Ireland?

Issued on: 27/02/2023 – 21:18

The deal seeks to resolve the tensions caused by the Northern Ireland protocol, a complex agreement which set the trading rules for the British-ruled region that London agreed before it left the EU but now says are unworkable.

Below are the key parts of the new framework outlined by Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen at a news conference and in British government documents:

Free flow of trade

When Britain left the EU, then Prime Minister Boris Johnson agreed to a deal that effectively left Northern Ireland in the bloc’s single market for goods because of its open border with EU member Ireland, creating a customs border with mainland Britain.

The British government has wanted to reduce the number of checks on goods travelling from Britain to Northern Ireland.

The two sides have agreed to separate goods just going to Northern Ireland and those which will continue into the EU into “green” and “red” lanes.

This is designed to reduce the paperwork facing companies that have said they were unable to provide a full range of products to Northern Ireland because the number of checks were too onerous.

“Today’s agreement delivers smooth flowing trade within the whole United Kingdom,” Sunak said. “It means food retailers like supermarkets, restaurants and wholesalers will no longer need hundreds of certificates for every lorry.”

EU laws

Under the earlier deal agreed with the EU, Northern Ireland followed some of the bloc’s laws so that goods flow freely over the border with Ireland without checks.

The Northern Ireland Assembly will now be able to “pull an emergency brake” to stop new EU single market rules applying if 30 out of the 90 members from at least two parties oppose the meeasures.

If the threshold is met they can ask the UK government to apply a veto to the new laws.

Von der Leyen said said Britain and the EU would consult each other extensively when introducing new laws and regulatory changes in an effort to reduce the need for using the brake.

But she said that the European Court of Justice will remain the ultimate arbiter of whether Northern Ireland is following single market rules.

The Democratic Unionist Party (DUP), Northern Ireland’s biggest unionist party, which is being closely watched for its reaction, said the new deal shows “significant progress”, but stopped short of supporting it at this stage because EU law remains applicable.

Value added tax and state aid

Businesses in Northern Ireland currently follow EU rules on state aid and value-added tax (VAT). This means tax breaks by British government payments to help firms in Northern Ireland must be compliant with rules set by the EU.

Under the new deal, the British government will have freedom to set VAT and subsidies in most instances in the province.

Horizon

Under a trade agreement signed at the end of 2020, Britain negotiated access to a range of science and innovation programmes including Horizon, a 95.5 billion euro ($101 billion)programme that offers grants and projects to researchers.

But the EU had blocked Britain’s participation because of the government’s stance on the Northern Ireland protocol. British scientists had been deeply concerned about missing out on funding.

Von der Leyen said once the new deal is implemented work would begin on restarting Britain’s cooperation with Horizon.

“This is good news for all those who are working in research and science,” she said.

(Reuters)