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Trade Diversion and Windsor Framework 2025-03-04
04 March 2025
Lead MP
Jim Allister
Debate Type
Adjournment Debate
Tags
EconomyEmploymentNorthern IrelandBrexit
Other Contributors: 7
At a Glance
Jim Allister raised concerns about trade diversion and windsor framework 2025-03-04 in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The issue of trade diversion is becoming increasingly problematic for Northern Ireland due to the post-Brexit Irish sea border, leading to significant changes in trade patterns. Before the protocol was implemented, goods could move freely between various UK regions and Ireland without major hindrances. However, since the introduction of customs checks and documentation requirements as part of the EU's approach towards GB, there has been a notable shift in trade preference from Great Britain to the Republic of Ireland. Economic data shows that while Northern Ireland’s imports from GB increased by 24% from 2020 to 2023, those from the Irish Republic surged by an astounding 50%. This trend is exacerbated by additional regulatory burdens such as EU product safety regulations and mutual enforcement issues, compelling companies to seek easier trade routes via the Republic of Ireland. The speaker highlights that the underlying intent of these changes seems to be fostering closer economic ties between Northern Ireland and the Republic at the expense of its links with Great Britain, effectively moving towards an 'all-Ireland economy'. He calls for measures such as mutual enforcement and simplification of trading protocols to reverse this trend.
Sammy Wilson
DUP
East Antrim
The diversion of trade has significant economic implications, including increased transport costs due to empty lorries returning from GB, higher costs for Northern Irish businesses seeking second-best suppliers in Ireland, and additional paperwork requirements.
Robin Swann
UUP
South Antrim
Citing the Colemans Garden Centre in South Antrim as an example, it is easier for Scottish suppliers to ship goods to Japan than to Northern Ireland due to bureaucratic hurdles, illustrating the practical impact of trade diversion.
Jim Shannon
DUP
Strangford
Small businesses in my constituency have reported increased costs due to duties for buying goods from English suppliers and selling them in Northern Ireland, which is a backward step compared to trust placed on VAT declarations.
Sammy Wilson
DUP
Fermanagh and South Tyrone
0.4% of EU trade crosses the Irish sea border yet it accounts for 20% of checks, highlighting a future trend with the construction of an £140 million EU control post in my constituency.
Richard Tice
Reform
Boston and Skegness
The previous Administration misled the House about the Windsor framework's ability to provide the best of both worlds, but the protocol continues to impose significant challenges on trade.
Jim Shannon
DUP
Strangford
The Stormont brake does not work effectively and the cost of HMRC checks has become prohibitively expensive for businesses, sometimes more than the goods themselves.
Carla Lockhart
DUP
Upper Bann
I have listened intently to the Secretary of State’s contribution and I am somewhat bemused by some of what he said. He speaks of businesses in his constituency that are jealous of what Northern Ireland businesses have. What we have in Northern Ireland is increased costs, increased paperwork and impediments to trade.
Government Response
The Minister acknowledged the concerns raised regarding trade diversion and its implications on economic ties between Great Britain and Northern Ireland. He highlighted that while there is no evidence of a systemic or significant reduction in goods crossing from GB to Northern Ireland, the Government recognises the challenges faced by businesses operating under the protocol. The minister noted that InterTradeIreland has played an active role in fostering cross-border trade, whereas InterTrade UK remains more limited due to lack of funding and staffing. To address the issue, the Government is actively reviewing potential measures to facilitate smoother trade flows under the Northern Ireland protocol. This includes exploring ways to enhance mutual recognition agreements and streamline customs processes without undermining regulatory standards. The minister emphasised that while recognising the economic and political sensitivities involved, any actions taken will be balanced against maintaining UK-wide market integrity and compliance with international law. The Secretary of State congratulates Jim Allister and acknowledges his sincerity in discussing Northern Ireland's trading arrangements. He outlines that the system currently in place is an inevitable result of leaving the European Union, leading to two trading entities with different rules but an open border between them. Hilary Benn argues against mutual enforcement as a solution, stating it is not credible. The Government negotiated the Windsor framework after recognising flaws in earlier plans, which represents a significant improvement over the Northern Ireland protocol. He explains that as a sovereign country, Britain must decide how to check goods arriving at its territory, and emphasises the importance of maintaining an open border for peace and progress in Northern Ireland. Despite challenges, the framework aims to ensure compliance with EU rules while allowing free trade. The Government’s view is that the Windsor framework protects UK internal market while respecting Northern Ireland's unique circumstances. We have negotiated improvements and lifted restrictions such as on seed potatoes and certain plant movements, and we continue to consult stakeholders to improve regulations. The Minister acknowledges that the framework is not perfect but argues it secures stable arrangements for trade in both markets compared to unilateral action under Article 16 which would damage good faith built up. He also notes the economy of Northern Ireland is performing well with low unemployment and increasing trade figures between GB and NI. I wanted to point out that the independent monitoring panel, which I met for the first time yesterday, has started its work. Establishing the panel was a commitment made in the safeguarding the Union Command Paper. Its job will be on the basis of the evidence and it will be provided with data on the flow of goods between Great Britain and Northern Ireland to say whether the UK internal market guarantee is being met. The first six-month reporting period commenced on 1 January and will conclude on 30 June 2025, following which the IMP will publish its assessment and any recommendations. I commit to the hon. and learned Member for North Antrim, and all those who contributed to the debate, that I shall consider the report with the same attention to detail that he has shown in forwarding his argument today. To conclude, this Government are committed to Northern Ireland. They are committed to the United Kingdom and to implementing the Windsor framework in a manner that is consistent with protecting Northern Ireland’s place within our internal market.
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