Our December blog, examined the optimism at the end of last year that a way could be found out of the political deadlock that has paralysed the Northern Ireland Assembly for the last two years. As our blog noted, although those hopes did not materialize, the fact that the discussions had reached such an advanced stage suggested that a solution might be found in the New Year.  The announcement by the Democratic Unionist Party (DUP) on 30 January that a Deal had been reached seems to justify that optimism.

A Historical Recap

The 1998 Belfast Good Friday Agreement (GFA) brought an end to 30 years of ‘The Troubles’.  It struck a delicate balance between the competing interests of the Unionist and Nationalist communities in Northern Ireland.  Key to its success was the removal of border infrastructure between Northern Ireland and the Republic of Ireland, and the creation of a Power Sharing Executive (PSE) for Northern Ireland.  The PSE allocates the position of First Minister to the largest political party in Northern Ireland, and the position of Deputy First Minister to the second largest.  Other than the status implied by the titles, there is very little practical difference between the two roles.

Northern Ireland’s parliament, the Stormont Assembly, only actually sat for any extended period of time between 2007-2017, but, until the last set of elections, the DUP had always held the position of First Minister.

Brexit and Northern Ireland

Northern Ireland voted by 56:44 to remain in the EU in the 2016 Brexit referendum.  The Unionist community largely voted ‘Leave’, believing it would consolidate Northern Ireland’s position within the UK; the Nationalist community generally voted ‘Remain’ for the opposite reason. 

When Brexit took the UK out the EU, it placed Northern Ireland in an impossible position.  Respecting the GFA required the removal of the border between Northern Ireland and the Republic of Ireland: protecting the integrity of the EU’s internal market required a border between the UK and the Republic of Ireland: protecting the integrity of the UK internal market, required no border between GB and N Ireland.

The solution finally settled on to this conundrum, was to place the border between the UK and the EU in the Irish Sea – an arrangement set out in the ‘Northern Ireland Protocol’ (NIP). Although this outcome enabled easier trading conditions between Northern Ireland and the Republic of Ireland, it posed major problems for trade between Northern Ireland and the rest of the UK. 

The NIP also exacerbated a sense of abandonment which had been growing since the census in March 2021 showed Catholics outnumbering Protestants in Northern Ireland for the first time.  The DUP First Minister resigned in protest at the NIP arrangement in February 2022, with subsequent elections in May 2022 returning a Sinn Féin majority – also for the first time.  The DUP refused to take up the position of Deputy First Minister under the prospective Sinn Féin First Minister, bringing an end to the PSE. 

This stalemate has remained unchanged since then, with government in Northern Ireland effectively being run on autopilot by civil servants.  The absence of government has exacerbated a severe fiscal crisis, with the public sector suffering significant underfunding and a wave of strikes in recent months over pay. 

The Windsor Framework

The Windsor Framework (WF), which came into effect on 1 October 2023, was the first attempt to find a resolution to DUP reservations with regards to the NIP. Further negotiations with the UK Government, led to the DUP announcement on 30 January 2024 that it had reached an agreement on changes to the WF which would enable it to re-enter power-sharing (as DFM) with Sinn Fein: a seismic moment for Northern Ireland.

Sir Jeffrey Donaldson, leader of the DUP, commented that the DUP had not got all that it wanted from the UK Government.  But that may have been inevitable.  There is in practice very little leeway to alter the WF — given the difficulties of balancing Brexit with the GFA.  It seems likely that Sir Jeffrey Donaldson was persuaded that the offer on the table (complete with a significant additional funding package for Northern Ireland) was as much as it was possible to get.

The Deal

The main elements of the Deal include:

  • The WF introduced a system for goods moving from GB to NI (Green Lane) and for goods moving from GB to The Republic (Red Lane).  The Command Paper removes the Green Lane, proposing instead a new UK internal market system with no checks on these goods, except for the purposes of tackling criminality/smuggling etc.  According to the Paper, 80% of GB/NI freight would fall under new system.  Checks would remain for Red Lane goods going to Republic.
  • To ensure consistency of sale of goods across the whole of the UK and to remove any possible disincentive to selling food and drink into N Ireland, food and drink sold in all four constituent parts of the UK will bear the same labelling ‘not for sale in the EU’. All goods made in N Ireland are also available for sale in GB.  EU law will only apply to goods made in N Ireland which are destined for sale into EU.
  • The WF assumed that N Ireland would remain aligned with EU legislation, but it installed a mechanism that gave the Northern Ireland Assembly the power to object to changes to EU rules that apply in Northern Ireland (the so-called Stormont Brake).  The Deal appears to have shifted the focus from an objection to EU legislation to whether new Westminster legislation could affect GB /N Ireland trade. Under this new arrangement, Ministers will be under a legal requirement to assess whether new UK legislation has a trading impact on the All-Ireland Economy and, if so, to make a statement addressing those concerns, including an Internal Market Impact Assessment attached to any new Law. 
  • The Deal will establish an independent monitoring panel for oversight of the implementation of the new arrangements.
  • Finally, the Government will bring forward legislation which will “affirm parliament’s sovereignty over all matters in Northern Ireland, and address the concern that Northern Ireland’s constitutional position in the union has been weakened by the creation of specific arrangements for trade in goods”

Comment:

It is unclear whether the EU was consulted.  Downing St insists it has not spoken to EU about Deal.   Brussels will certainly want to have a look at the detail of the Deal, but so far at least, appears to view this as an internal UK negotiation which amends the implementation of the WF between GB and NI, but does not impact on its implementation between the UK and the Republic of Ireland.

Although the return of the power-sharing executive would be an extremely welcome development for Northern Ireland, the Deal does not fully resolve the challenges created by Northern Ireland being in a dual regulatory environment. It will be necessary, for example, to find a solution to a disagreement over whether veterinary medicines used in Northern Ireland must be tested in the EU and also whether the EU’s new carbon border taxes will apply in Northern Ireland.

The timing of the Deal with the UK Government is important.  Full post‑Brexit border-control checks on imports from the EU have come into force this week, adding to the bureaucratic expense of separate labelling for goods coming from GB into Northern Ireland.  The UK will seek to gain competitive advantage by regulatory divergence from the EU: any such divergence risks tension with the Whole-Ireland Economy (a key tenet of the GFA) and adds to potential costs for companies exporting between N and S Ireland. These issues are likely to add complexity to an already fraught vote that the Stormont Assembly must take by December 2024 on whether to keep the Northern Ireland Protocol as amended by the Windsor Framework. 

Although the DUP remains the largest Unionist Party in Northern Ireland, more ‘traditional’ Unionism is splintering, with increased support for harder-line Unionist Parties such as the TUP, the UUV and the PUP.  The DUP promised its base that it would not accept any new deal with the UK Government that did not meet its seven tests: the seven tests have been conspicuously absent from any DUP commentary this week.  Some of its supporters may feel they have been betrayed – some have already condemned the DUP announcement as a surrender, calling on the DUP to “keep their word”, reject the deal and work to remove the sea border entirely.  And the DUP and Sinn Fein must now build a working relationship, starting from a very low base of mutual trust. Power-sharing may be back, but that does not mean that all will be plain-sailing from here on…

Photo of Thomas Reilly Thomas Reilly

Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.

Ambassador…

Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.

Ambassador Reilly was most recently British Ambassador to Morocco between 2017 and 2020, and prior to this, the Senior Advisor on International Government Relations & Regulatory Affairs and Head of Government Relations at Royal Dutch Shell between 2012 and 2017. His former roles with the Foreign and Commonwealth Office included British Ambassador Morocco & Mauritania (2017-2018), Deputy Head of Mission at the British Embassy in Egypt (2010-2012), Deputy Head of the Climate Change & Energy Department (2007-2009), and Deputy Head of the Counter Terrorism Department (2005-2007). He has lived or worked in a number of countries including Jordan, Kuwait, Yemen, Libya, Iraq, Saudi Arabia, Bahrain, and Argentina.

At Covington, Ambassador Reilly works closely with our global team of lawyers and investigators as well as over 100 former diplomats and senior government officials, with significant depth of experience in dealing with the types of complex problems that involve both legal and governmental institutions.

Ambassador Reilly started his career as a solicitor specialising in EU and commercial law but no longer practices as a solicitor.

Photo of Maree Gallagher Maree Gallagher

Maree Gallagher is an Irish qualified solicitor who advises clients on EU food and life sciences law and policy. She has been elected President of the British Irish Chamber of Commerce for 2022/2023.

Maree has over twenty years of experience working with companies…

Maree Gallagher is an Irish qualified solicitor who advises clients on EU food and life sciences law and policy. She has been elected President of the British Irish Chamber of Commerce for 2022/2023.

Maree has over twenty years of experience working with companies to bring their products to market. She is regarded as one of Europe’s leading crisis management experts and has extensive experience advising FMCG companies on product recall and reputation management across the EU.

Maree’s expertise covers drugs and devices with a particular emphasis on biologics and GxP, food and beverages, AGRI, and consumer products. Her practice covers a very wide spectrum from product licensing to composition, labelling, and marketing. Her clients include large public companies as well as multinationals operating in the Life Sciences and FMCG sector across Ireland and the EU. Chambers Global listed Maree as a “Notable Practitioner” in their 2021 Guide to Crisis & Risk Management.

Maree also represents businesses facing regulatory enforcement action and she acts as a strategic and public affairs adviser in her specialist areas.

Photo of Seán Finan Seán Finan

Seán Finan is an associate in the Life Sciences team.  His practice covers environmental, food and beverage and pharmaceutical regulation. 

Seán has specific experience in a number of key areas for EU and UK clients in the food and beverage, pharmaceutical, cosmetic and…

Seán Finan is an associate in the Life Sciences team.  His practice covers environmental, food and beverage and pharmaceutical regulation. 

Seán has specific experience in a number of key areas for EU and UK clients in the food and beverage, pharmaceutical, cosmetic and consumer goods industries, including:

  • General food regulation; novel food regulation; genetically modified and “precision bred” products;
  • Advertising claims, particularly environmental claims and “greenwashing”;
  • Environmental and ESG compliance issues (Extended Producer Responsibility, ); and
  • Chemicals legislation (REACH, CLP, Biocides).

Seán is qualified in both England & Wales, and the Republic of Ireland.