# The Northern Ireland Protocol: Why Businesses Are Quietly Thriving While Politicians Complain

> The Windsor Framework was supposed to fix the Northern Ireland Protocol's problems. Instead, it created a unique economic position—access to both UK and EU markets—that businesses are exploiting while unionist politicians demand its removal. The data shows NI outperforming the rest of the UK.

*Section: Politics — By Sarah Mitchell — Published January 17, 2025 — 10 min read*

Canonical URL: https://dailyjunction.org/politics/northern-ireland-protocol-business-impact-2025
Tags: Northern Ireland, Brexit, Windsor Framework, trade, economy, DUP

## Key takeaways

- Northern Ireland has dual market access—full access to both UK and EU single markets for goods
- NI goods exports grew 7.2% in 2024 vs 1.1% for the UK overall, according to NISRA data
- Foreign direct investment into NI increased 42% in 2023-24, outpacing rest of UK
- The DUP and TUV continue to oppose the Windsor Framework on constitutional grounds despite economic benefits
- Businesses report bureaucracy costs but overwhelmingly prefer current arrangement to hard choice between UK/EU access

The Northern Ireland Protocol, rebranded as the Windsor Framework in 2023, was supposed to be an economic disaster and a constitutional outrage. Unionist politicians predicted trade collapse, business exodus, and the slow death of Northern Ireland's place in the Union. Two years on, the reality is rather different: Northern Ireland's economy is outperforming the rest of the UK, foreign investment is surging, and businesses are quietly exploiting a unique competitive advantage—dual access to both UK and EU markets.

This does not mean the Protocol is without problems. Bureaucracy has increased, some supply chains have been disrupted, and the constitutional questions that animate unionist opposition are real. But the economic data is increasingly clear: Northern Ireland has stumbled into a privileged position that the rest of the UK would kill for, and businesses know it even if politicians refuse to admit it.

## What the Windsor Framework actually does

To understand why this matters, you need to understand what the Windsor Framework is and why it exists. Brexit created an impossible trilemma for Northern Ireland: you cannot have an open border with the Republic of Ireland, regulatory divergence between the UK and EU, and no border in the Irish Sea. You can have two of the three, but not all three.

The UK Government chose to prioritise the open land border (essential for the Good Friday Agreement and peace process) and avoid a hard border with the Republic. The price was accepting some regulatory divergence between Northern Ireland and Great Britain, with checks on goods moving from GB to NI.

The original Protocol, agreed in 2019, created significant friction. Goods moving from Great Britain to Northern Ireland faced customs declarations, regulatory checks, and in some cases, full inspections. Supermarkets struggled to stock shelves, parcels were delayed, and businesses faced mountains of paperwork.

The Windsor Framework, negotiated by Rishi Sunak in February 2023, simplified this. It created a "green lane" for goods destined to stay in Northern Ireland, with minimal checks and trusted trader schemes. Goods moving onwards to the EU (or at risk of doing so) go through a "red lane" with full checks. The Stormont Brake allows the Northern Ireland Assembly to object to new EU rules, though this is limited and has not yet been used.

The result is a hybrid system: Northern Ireland remains part of the UK customs territory but follows EU single market rules for goods. This means dual market access—NI businesses can sell freely into both the UK and EU markets without tariffs or most regulatory barriers.

## The economic data: NI is outperforming

The economic impact has been striking. According to Northern Ireland Statistics and Research Agency (NISRA) data, goods exports from Northern Ireland grew 7.2% in 2024, compared to 1.1% for the UK as a whole. This is not a one-off—NI has outperformed the UK average in goods trade growth every year since the Windsor Framework came into effect.

Foreign direct investment (FDI) tells a similar story. NI attracted 42% more FDI projects in 2023-24 than the previous year, according to EY's UK Attractiveness Survey. This was the highest growth rate of any UK region. Investors cite dual market access as a key factor—the ability to manufacture in NI and sell to both UK and EU without trade barriers is unique in the post-Brexit landscape.

Manufacturing NI, the industry body, conducts quarterly surveys of manufacturers. The most recent (Q4 2024) found that 68% of manufacturers believe dual market access is a competitive advantage, and 71% want to retain the current arrangements rather than align fully with either UK or EU rules. Only 14% want to scrap the Windsor Framework and align fully with GB.

This is not to say there are no costs. The same survey found that 54% of businesses report increased administrative burden due to Protocol-related paperwork, and 38% have faced supply chain disruption. But when asked to balance costs against benefits, a clear majority prefer the current system to the alternatives.

## Why dual market access matters

To understand why businesses value this, consider a concrete example. A manufacturing company in Belfast can import components from Great Britain (via the green lane with minimal friction), assemble them into finished products, and then export those products to both the UK and EU markets without tariffs, quotas, or regulatory barriers.

A comparable company in Manchester can sell freely to the UK but faces tariffs, customs checks, and regulatory compliance costs when exporting to the EU. A company in Dublin has the opposite problem—free access to the EU but barriers to the UK market.

The Belfast company has the best of both worlds. This is not a small advantage—it is a structural competitive edge that makes Northern Ireland an attractive location for any business that serves both markets.

This advantage is particularly pronounced in sectors like agri-food, pharmaceuticals, and advanced manufacturing, where regulatory compliance is complex and costly. Being able to meet both UK and EU standards simultaneously, and to move goods freely in both directions, is enormously valuable.

## The political disconnect

So why do unionist politicians continue to oppose the Windsor Framework? Because for them, this is not primarily an economic question—it is a constitutional one.

The DUP's position is that any arrangement that treats Northern Ireland differently from Great Britain undermines the Union. The fact that EU law applies in NI (even in a limited way) without full UK parliamentary consent is seen as a sovereignty issue. The existence of checks on goods moving from GB to NI is characterised as a "border in the Irish Sea" that weakens NI's position within the UK.

This is not an absurd position. The Windsor Framework does create regulatory divergence, and it does mean that NI is subject to rules made in Brussels that do not apply in Birmingham or Bristol. For those who prioritise constitutional principle over economic pragmatism, this is unacceptable regardless of the economic benefits.

The DUP eventually agreed to return to the Stormont Executive in February 2024, after securing further concessions from the UK Government (the "Safeguarding the Union" command paper). But they have not endorsed the Windsor Framework—they have merely accepted it as the least-bad option available while continuing to call for its replacement.

The more hardline Traditional Unionist Voice (TUV) rejects even this compromise and continues to demand full regulatory alignment with Great Britain, even if it means losing dual market access.

## The business view: pragmatism over principle

In contrast, the business community is overwhelmingly pragmatic. The Northern Ireland Chamber of Commerce, the CBI, Manufacturing NI, and Retail NI have all said the same thing: the Windsor Framework is not perfect, but it is workable, and the alternatives are worse.

The alternative of full alignment with Great Britain would mean losing smooth access to the EU market—a disaster for the 50%+ of NI goods exports that go to the EU (mostly the Republic of Ireland). The alternative of full alignment with the EU would mean barriers to the GB market, which accounts for the majority of NI's trade.

Businesses do not want to choose. They want what they have now: access to both markets, even if it comes with some bureaucracy.

This creates a strange political dynamic. Unionist politicians claim to speak for "the people of Northern Ireland" when they oppose the Protocol, but the business community—which employs those people—largely supports it. Polling is mixed, with unionist voters more sceptical than nationalist voters, but even among unionists, opposition has softened as the economic benefits become clearer.

## The supply chain adjustments

It is important not to overstate the ease of the current system. The green lane has reduced friction, but it has not eliminated it. Businesses still need to register, provide data, and in some cases, demonstrate that goods are not at risk of moving to the EU.

Some GB suppliers have stopped serving NI customers because the paperwork is not worth it for low-value or low-margin goods. This has been particularly acute for online retail and parcels, where the cost of compliance can exceed the value of the goods.

However, businesses have adapted. NI retailers have shifted some sourcing to the Republic of Ireland or EU suppliers, taking advantage of the fact that goods from the EU face no barriers. Some have set up dual supply chains—EU suppliers for some products, GB suppliers for others.

This is not costless, but it is manageable. And for many businesses, the ability to source from both UK and EU suppliers without prohibitive barriers is itself an advantage.

## The investment story

The FDI data is perhaps the most telling indicator of how the Windsor Framework is perceived by hard-headed investors. Northern Ireland is attracting investment at a rate that outpaces the rest of the UK, and dual market access is consistently cited as a key factor.

Pharmaceutical companies, in particular, have taken note. The ability to manufacture in NI and sell to both the UK's MHRA-regulated market and the EU's EMA-regulated market without duplication is valuable in a sector where regulatory compliance is complex and costly.

Tech and advanced manufacturing are also showing interest. The combination of dual market access, a skilled workforce, relatively low costs compared to Dublin or London, and generous UK R&D tax credits makes NI an attractive location.

This is not a gold rush—NI is not about to become the next Silicon Valley. But it is a meaningful shift, and it is driven directly by the unique regulatory position created by the Windsor Framework.

## The long-term sustainability question

The big unknown is whether this arrangement is sustainable in the long term. It depends on two things: political stability and regulatory alignment.

Politically, the arrangement requires continued cooperation between the UK and EU, and acceptance (however grudging) from unionist politicians in NI. If relations between London and Brussels sour, or if the DUP decides to collapse Stormont again, the framework could unravel.

Regulatory alignment is the other risk. The Windsor Framework works because UK and EU regulations for goods are currently similar—both inherited the same rules from when the UK was in the EU. Over time, as the UK and EU diverge, maintaining dual access will become harder.

If the UK deregulates significantly or adopts radically different standards, NI businesses will face a choice: follow UK rules and lose EU access, or follow EU rules and face barriers to the GB market. The current sweet spot depends on continued alignment, which is not guaranteed.

## The political future

What happens next depends on politics, not economics. The economic case for the Windsor Framework is strong and getting stronger. But politics in Northern Ireland is not driven primarily by economics—it is driven by identity, constitutional principle, and the legacy of conflict.

If the DUP and TUV continue to oppose the framework, they will do so despite the economic evidence, not because of it. Their voters may eventually shift as the benefits become undeniable, but this will be a slow process.

Nationalist parties, meanwhile, support the framework but for different reasons—they see it as maintaining the all-island economy and keeping the door open to eventual Irish reunification. This makes cross-community consensus difficult.

The UK Government's position is that the Windsor Framework is settled and will not be reopened. The EU has said the same. But if a future UK government decides to prioritise unionist concerns over economic pragmatism, or if the EU decides NI is exploiting the arrangement unfairly, the settlement could be revisited.

## The bottom line

The Northern Ireland Protocol, in its Windsor Framework form, is a rare example of a Brexit outcome that is working better than expected. It has created a unique economic position that businesses are exploiting, investment is flowing, and trade is growing faster than the UK average.

This does not resolve the constitutional questions that unionist politicians raise, and it does not eliminate the bureaucracy that businesses complain about. But it does show that the doom-laden predictions of economic collapse were wrong.

Northern Ireland has stumbled into a competitive advantage that the rest of post-Brexit Britain can only envy: access to both the UK and EU markets without having to choose. Whether this lasts depends on politics, not economics. But for now, while politicians argue, businesses are quietly getting on with making it work. And the data suggests they are succeeding.

## Frequently asked questions

### What exactly is the Windsor Framework and how does it differ from the original Protocol?

The Windsor Framework, agreed in February 2023, modified the Northern Ireland Protocol to reduce trade friction. Key changes: a 'green lane' for goods staying in NI with minimal checks, a 'red lane' for goods moving to the EU with full checks, the Stormont Brake allowing the NI Assembly to object to new EU rules, and reduced customs paperwork. The fundamental arrangement—NI following EU single market rules for goods while remaining in the UK customs territory—remains unchanged.

### Why do unionist politicians oppose something that appears to benefit the NI economy?

For the DUP and TUV, this is primarily a constitutional issue, not an economic one. They argue that different rules for NI compared to Great Britain undermines the Union and creates a border in the Irish Sea. EU law applying in part of the UK without full UK consent is seen as a sovereignty issue. They also argue that economic benefits are overstated and that the arrangement is unstable long-term. For hardline unionists, constitutional principle outweighs economic pragmatism.

### Is the current arrangement sustainable long-term?

Uncertain. Economically, it works well and businesses want to keep it. Politically, it remains contested. The DUP returned to Stormont in 2024 but continues to oppose the framework. If EU and UK regulations diverge significantly over time, maintaining dual access will become harder. The arrangement also depends on continued UK-EU cooperation, which could break down. Most analysts see it as stable for now but potentially fragile if political winds shift in London, Brussels, or Belfast.

## Sources

- [Northern Ireland Statistics and Research Agency — Trade and economic data](https://www.nisra.gov.uk/)
- [Manufacturing NI — Business survey data on Protocol impact](https://www.manufacturingni.org/)
- [The Detail — Northern Ireland investigative journalism](https://www.thedetail.tv/)

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