Yesterday’s (27th February 2023) press conference hosted by UK PM Rishi Sunak and President of the EU Commission, Ursula Von Leder, saw welcomed progress made on the long-awaited decision regarding the future of trade and border control between Northern Ireland and Mainland UK. 

Brexit, The Northern Ireland Protocol and Supply Chain Challenges:

Since the signing of the EU-UK Withdrawal (Brexit) agreement in 2020, one of the biggest concerns for UK and Irish businesses has been the security of the trade route and flow of goods. The Northern Ireland Protocol ratified in January 2021 established customs checks between Mainland UK and Northern Ireland, causing many businesses concerns with additional checks, documentation and declarations, and lead-time implications as a result. In addition, calls from various parties to enact ‘Article 16’ of the NI Protocol (intended as a safeguard to override the protocol in instances of “serious economic, societal or environmental difficulties”) in instances such as the supply of COVID vaccines in 2021, further added to uncertainty of the protocol. 

Additional checks and documentation requirements post-Brexit have seen a knock-on effect of the costs of transportation as well as certain expedit services becoming restricted between Northern Ireland and Mainland UK. Last year in an interview with BBC Radio 5 Live, John Martin from the RHA (Road Haulage Association) remarked on a case of an importer paying an extra £150 per pallet to move goods between Mainland Uk and Northern Ireland, directly as a result of the N.I protocol measures1. 

What the Windsor Agreement Looks to Resolve:

The biggest takeaway from yesterday’s announcement for supply chain and logistics is the instatement of a ‘green lane’ for goods moving between Northern Ireland and mainland UK. The proposed framework actively looks to reduce the documentation and customs requirements for goods crossing the Irish Sea into Northern Ireland, and as a result can give  businesses and consumers hope of reduced costs and lead time. 

Thinking specifically about the remote and home-testing health markets for consumers in Northern Ireland, servicing consumers and end-users from Mainland UK is challenging when faced with potential customs delays or backlogs caused by missing or incomplete documentation. Specifically where stability over time is a factor in samples such as blood collection, time is of the essence to give consumers, labs and industry confidence of remote testing results. Further, sample integrity and stability specifically relying on cold-chain solutions add operational complexity, with IATA regulation on handling some hazardous materials such as dry ice, as well as dry-ice volume being heavily dependent on the calculated transit time. Border removal and in turn the improved lead time and logistics costs, improves access to the Northern Ireland market for Mainland UK providers as well as giving Northern Irish consumers access to the same goods and services as their Mainland UK neighbours.

Beyond The Border:

Yesterday’s press conference also saw Von Leder address the framework’s inclusion of Horizon Europe, which indicate the freeing up of significant R&D funding in the UK for research organisations and universities. Brexit saw the door shut to Horizon Europe for UK scientists and researchers, cutting off access to grants and cross-continental R&D relationships. Science and research communities across the UK will be relieved that the uncertainty of funding and access to Horizon Europe resources should come to an end once the Agreement is signed.

Consultation between UK and EU on any planned regulatory changes from the UK was also mentioned indicating a possible closer collaboration on future evolution of changing UKCA and CE requirements. For the IVDR and MDR impacted industries, better communication and coordination is essential for ease of managing international operations and submissions across geographies. 

What’s Next?:

Business, markets and analysts are keen to see the details of the Windsor Agreement published, as well as the expected implementation date for the proposed framework. Sunak confirmed in the press conference that the framework will go to Parliament for vote, and many of us are awaiting reactions from lobbyists and groups such as the ERG and DUP to preempt the reception of the agreement. In the meantime, the market reacted positively to the news from yesterday afternoon, with the Pound Sterling outperforming other major currencies by the close of market3.

For remote testing and home use kits, the framework looks to be a positive move towards resolving challenges in accessing the Northern Irish market from Mainland UK, as well as being able to open partnerships between labs, research organisations, businesses and consumers in Northern Ireland and into the EU.

Sources:

1. https://news.rha.uk.net/2022/05/16/northern-ireland-protocol-rha-sets-out-position-ahead-of-johnson-talks/content.html
2. https://www.bbc.co.uk/news/explainers-53724381 
3. https://www.poundsterlinglive.com/gbp-live-today/18259-pound-to-euro-and-dollar-windsor-agreement