The Windsor Framework signed at the end of February by Prime Minister Rishi Sunak of Britain and European Commission president Ursula von der Leyen brought expressions of relief throughout much of the United Kingdom and the European Union. The accord is certain to improve the UK-EU political relationship and facilitate the economic recovery of Northern Ireland as a full participant in both the EU Internal Market and the UK national economy.
But this agreement, which focuses exclusively on commerce to and from Northern Ireland, will not make much difference for the broader UK economy. Northern Ireland's growth prospects will continue to be constricted by the persistent barriers introduced by Brexit—not least the rolling expiration of many temporary transition arrangements in key economic sectors forged to ease the United Kingdom's ill-advised withdrawal from the European Union. The Windsor Framework averts a collapse of UK-EU relations, but it does not "get Brexit done," as former Prime Minister Boris Johnson promised years ago.
The Windsor Framework eases some EU rules and regulations
The Windsor Framework reforms the Northern Ireland Protocol, which has governed trade and economic activity in and out of Northern Ireland since the United Kingdom's formal withdrawal in 2021. It eases a number of EU rules and regulations to facilitate a freer flow of goods and services from Northern Ireland to the rest of the United Kingdom without the need for border arrangements between Northern Ireland and the Republic of Ireland. Areas that have been relaxed include customs treatment of goods, retail and agri-food regulations, easier cross-border transportation of pets, easier postal and parcel border crossings, medicine approvals, and certain provisions regarding state aid and external tariff rate quotas. Most important, the Windsor Framework reforms the political voice of the Northern Ireland regional assembly, giving it the ability to block the automatic implementation of new EU Internal Market rules and regulation in Northern Ireland "that may have a significant and lasting impact specific to the everyday lives of communities there."
The European Union could have insisted that Britain adhere to the letter of the existing Northern Ireland Protocol. Instead, Brussels showed, through the sizable changes to the framework, a willingness to move from prior positions—perhaps more so than the United Kingdom—in order to secure this new agreement. Because the European Union is a considerably larger economic actor than the United Kingdom, its willingness to accommodate UK policy wishes might seem surprising on the surface. But political considerations in Brussels and elsewhere among member countries compelled European leaders to compromise.
Why was the European Union so willing to accommodate the United Kingdom?
What are the factors that led to their change of heart? First, the war in Ukraine has underlined the key role of the United Kingdom in military affairs in Europe and highlighted the damaging effects of a political rift in the West as it confronts Russian president Vladimir Putin. The European Union also wanted to head off a disastrous scenario: Without an alternative proposal, the UK Parliament could have passed the Northern Ireland Bill proposed by Johnson, which would have empowered the UK government to unilaterally overrule the international treaty signed with the European Union. In turn, the European Union would likely have had no political recourse but to terminate the entire post-Brexit Trade and Collaboration Agreement (TCA) between the two. By agreeing to the Windsor Framework, the European Union significantly reduces the risk of a total collapse of UK-EU relations, which would destabilize the entire region.
Second, the European Union felt compelled to reward the more mature and fact-based political approach adopted by Prime Minister Sunak, in contrast to his predecessors, Johnson and Liz Truss. By granting Sunak an objectively far better deal than what was on the table for Johnson or Truss, the European Union is highlighting the importance of substantive engagement and political trust in international relations. Brussels is also handing Sunak a political success departing from the failures of Johnson and Truss's bluster-based populist Brexit policies—clearly hoping to avert a Johnson political comeback.
Third, the European Union has bigger fish to fry economically and politically and needs to move on from Brexit. The deal matters a lot to Northern Ireland but has no real economic significance for the European Union. Brussels can always avoid any precedent setting effects from its concessions, for instance in ongoing trade negotiations with Switzerland, by referencing the paramount political need to safeguard the peace in Northern Ireland.
The Windsor Framework does not reverse broader negative shock of Brexit
Nevertheless, the Windsor Framework does nothing to reverse the broader negative shock to the UK economy from the type of Brexit chosen by Johnson and endorsed by the opposition Labour Party desperate to avoid Brexit playing a part in the subsequent election. The clock is still ticking on Brexit's downsides. The transition arrangements will expire in the next two to three years on important economic issues, including temporary access to elements of each other's financial services markets; local content requirements for electric vehicles; personal data protection; fisheries; product markings indicating that traded goods meet the necessary health, safety, and environmental standards; chemicals registration; and full UK customs checks of imports from the European Union. Accordingly, the economic separation between the European Union and United Kingdom is certain to widen in the near term. This widening will put a continued downward pressure on the UK economy outweighing any positive effects gained from the Windsor Framework. It therefore continues to be likely that the United Kingdom will seek a renegotiation of its economic and political relationship with the European Union in the medium term, more closely aligning the two sides' interests and ironically mirroring the new Northern Ireland arrangement.
More immediately, the Windsor Framework must be approved by EU member states (a formality) and the UK Parliament. Prime Minister Sunak has requested that his deal be "politically blessed" by a parliamentary vote and now must convincingly win the backing of his own Tory members of parliament (MPs). A crucial question for Northern Ireland's immediate political future is whether the Democratic Unionist Party (DUP), the loyalist organization in Northern Ireland, will endorse the deal, or at least not reject it, and agree to reenter the local Northern Ireland government powersharing agreement. Assuming the Conservative MPs in Westminster—including many of the DUP's erstwhile allies in the hardline pro-Brexit European Research Group (ERG) caucus—overwhelmingly approve the deal as "the best deal to be had," it seems most likely that all or enough of the DUP will agree to return to work in Stormont for the local parliament to resume its operation. This alone would represent tangible political progress in Northern Ireland.
This publication does not include a replication package.