Renewal of the Windsor Framework: what next for post-Brexit trade?

What is the Windsor Framework?

The Windsor Framework is shorthand for a package of changes that were made in 2023 to the original Northern Irish Protocol.

At their core, those changes sought to address an imbalance. While the Protocol originally avoided a post-Brexit hard border between NI and the Republic of Ireland ("ROI") (and by extension the EU Single Market), social, political and economic difficulties arose from the effect on East-West trade between Great Britian ("GB") and NI, which is the principal arterial route of Northern Ireland’s economy.

Why does it matter?

The Framework aims to alleviate the burdens on trade crossing the Irish Sea, while at the same time allowing the land border between NI and ROI to remain free from checks. It therefore matters as much to businesses based in GB selling into NI as it does to the customers and consumers there. 

In particular, the UK Internal Market Scheme ("UKIMS") has expanded the number of businesses eligible to benefit from simplified arrangements (known as the 'green lane') for moving goods into NI from GB that are not at risk of entering the EU. A 'red lane', where full control checks are in place, is reserved for goods bound for ROI or elsewhere in the Single Market.

The upside for Agrifoods

UKIMS includes the introduction of the Northern Ireland Retail Movement Scheme for prepackaged agrifood retail products ("NIRMS"), under which GB products destined for consumers exclusively in NI can benefit from the 'green lane', provided they are labelled ‘Not for EU’. Phase 1 of NIRMS has been in effect since October 2023, covering prepackaged meat and some fresh dairy products. Phase 2, which covered all dairy products, came into force from October 2024. Phase 3, which will roll out on 1 July 2025, will apply the arrangement to a broader range of prepackaged agrifood retail products including fish, eggs, honey, composite products (e.g. pizza), as well as pet food.

A smoother path for Human Medicines

From 1 January 2025, the Framework will also ensure that medicines can be approved and licensed on a UK-wide basis by the Medicines and Healthcare products Regulatory Agency. The onward movement of these medicines into any part of the EU will be impeded by a requirement that all medicines on the GB & NI markets must be labelled as ‘UK Only’ (for more on this issue, see our blog A new post-Brexit approach for the authorisation of medicines in the UK). At the same time, medicines entering NI will not need to display features required under the EU Falsified Medicines Directive, including 2D barcodes and serialisation numbers that are EU compliant.

Greater certainty for those receiving UK Government subsidies

Article 10(1) of the Framework requires any UK public authority to apply EU State aid law if it grants a subsidy which may affect trade in goods between NI and the EU (including ROI). For these purposes, 'goods' includes the all-Ireland single electricity market.

Confusion arose under the original Protocol, centred on the question of exactly what measures would likely be considered to affect trade in this way. The result was a ‘chilling effect’, discouraging GB investment into NI.

The Framework narrows the circumstances in which a UK subsidy is deemed capable of triggering EU State aid law to instances where the award has a link to NI and has a real foreseeable effect on trade between NI and the EU which is material and not merely hypothetical.

For subsidies granted to businesses which are registered in GB, the presumption is that EU State aid law will not apply unless:

1. There is evidence of a genuine and direct link to NI - for example, where the GB business holds a significant share of the NI market for the relevant goods; or
2. There is evidence that benefits of the subsidy will be entirely or partially passed to any activities that the GB business might have in NI, including through relevant goods placed onto the NI market.

Where next?

This week's vote secures the continuation of the Framework arrangement for at least another four years, albeit that the UK Government now has a duty to commission an Independent Review into the way in which the Framework is functioning.

The extent to which further regulatory alignment between the UK and EU might evolve during that period remains to be seen:

• Greater convergence might mean that the gaps between the two jurisdictions, which the Framework currently seeks to bridge, could narrow of their own accord.
• On the flip side, greater divergence between the UK and the EU could result in the Framework coming under pressure, scrutiny and legal challenge.

With the UK Government's recent commitment to an approach to global trade which does not choose between Europe on the one side and the United States on the other, it remains to be seen whether the Windsor Framework will sit quietly in the background or find itself with a front row seat.   

If you would like to discuss any of the issues raised in this blog, please contact Regulatory Senior Associate James Groves.

The content of this blog does not constitute legal advice and is provided for general information purposes only. Specific legal advice should be sought before taking any actions based on the content of this blog.