The New Brexit Protocol

For some, the process of the U.K.’s departure from the European Union (EU) has been a little like taking some of the eggs out of an omelet. For others, Brexit has simply been a nightmare. However, this week’s developments present a glimmer of hope that the Brexit saga may finally move on from a state of confusion to a path toward conclusion.

One of the thorniest issues created by Brexit surrounded Northern Ireland, which has substantial links both to the rest of Britain and to the Republic of Ireland. The former is not in the EU; the latter is. Terms intended to recognize this standing were negotiated carefully, but the British government under Boris Johnson essentially overrode them last year. This created great friction between London and Brussels.

Late last month, under the leadership of current prime minister Rishi Sunak, the U.K. and the EU began working toward a deal to reform the contentious Northern Ireland protocol. The new “Windsor Framework” will split goods entering Northern Ireland from Britain into two tracks: a green lane for goods to be sold in Northern Ireland and a red lane for products destined for the EU. Goods passing through the green lane will not be subjected to EU customs processes. EU checks and paperwork will remain in place for products going through the red lane. The deal also addresses concerns on customs, agri-food, medicines and taxes.

The new framework is a welcome development. The direct boost to Britain’s economic fortunes will likely be minor, but the framework eliminates the risk of a trade war between the U.K. and the EU. It also sets a course for improved post-Brexit ties and future trade negotiations, which might reduce the economic drag that the U.K. has experienced since committing to leave the EU.

Brexit has proven to be highly disruptive for the British economy. It has created barriers to trade and cross-border mobility, causing problems for supply chains. Goods entering the EU from the U.K. have been subject to new customs declarations, rules of origin, product safety standards and inspections. These checks have contributed to additional costs and delays for businesses.