The UK and the EU have reached agreement on changes to the post-Brexit arrangements for Northern Ireland, known as the Windsor Framework. For businesses which don't have activities in Northern Ireland, the reaction might be: so what? But as we explain below, there are some important wider ramifications.
Looking at the longer term, the deal could also open the way to improvements being made to the TCA, which is up for review in 2025 (although in principle there is nothing to stop the EU and the UK making changes to it ahead of this). For example, the parts of the TCA dealing with temporary service provision in the EU are widely regarded as sub-optimal; various accounts of the TCA negotiations suggest that the EU would have been open to going further on short term mobility for business people, had the UK been interested in doing so.
Many businesses will also be hoping that a successful deal on NI and a "reset" of the relationship with the EU will encourage the UK Government to reconsider its approach to the Retained EU Law (Revocation and Reform) Bill, which is currently before Parliament. The Bill has been heavily criticised by a very wide range of stakeholders for effectively creating yet another Brexit cliff edge for business at the end of 2023, which is when large numbers of EU-derived measures would in theory be revoked. Rather like the Northern Ireland Protocol Bill, this strikes many as an unnecessary and damaging distraction from the key task of ensuring a return to healthy levels of growth in the economy. Click here for our briefing on the Bill.
The deal also removes a potential obstacle to the UK's application to join the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP). With China also looking to join, other CPTPP signatories were thought to have misgivings about the UK's threat to breach international law by proceeding with the Northern Ireland Protocol Bill – but as noted above, the UK Government now accepts that there is no legal justification for it. That said, CPTPP accession is unlikely to bring significant economic benefits in the short term, as the UK has already agreed preferential trading arrangements with 9 of the CPTPP's 11 members. See also our interactive map of the UK's post-Brexit trade agreements.
Having said all that, at the time of writing, the Windsor Framework was still in draft – and until it has been adopted by the UK and the EU, many of the potential wider benefits outlined above shouldn't be considered a "done deal" either. For a more detailed look at the new arrangements, including likely timing, see our briefing "The Windsor Framework: is it a good deal for business?".
As the level of debate surrounding the Windsor Framework demonstrates, the fallout from Brexit is not just a political issue and continues to be a live issue for business, despite the UK having left the EU and entered into a new, more distant trading relationship. For more information, see our Beyond Brexit client portal, which includes coverage of:
