Agreement reached between UK and EU on Northern Ireland: the impact on the steel industry

The Windsor Framework - a 100-page deal signed on February 27 by British PM Rishi Sunak and President of the European Commission Ursula von der Leyen - tackles the issue of the movement of goods traded across the Irish Sea from Great Britain to Northern Ireland.

To better understand what happened, let us take a step backward.
In order to avoid re-establishing a physical border between the two Irelands, the Post-Brexit Northern Ireland Protocol, which came into effect on January 1, 2021, considered Northern Ireland as part of the single market for all intents and purposes - with consequent subjection to EU law. Goods traveling from Great Britain to Northern Ireland were subject to inspection and document checks at Northern Ireland ports, creating a series of controversies and frictions in the Great-Britain-to-Northern-Ireland trade, with companies complaining about the extra costs and order delays.

Now, the deal guarantees that products coming from the UK boundaries stay within Northern Ireland's borders to transit without particular bureaucratic controls through a green lane, an automatic green corridor free of customs barriers of any kind. Goods destined to travel through Northern Ireland to Ireland will be subject to standard controls by passing through an alternative corridor, the red lane. 

A significant point of the agreement is the so-called Stormont brake, a mechanism upholding the sovereignty of Northern Ireland, through their democratic institutions, over decisions in Brussels that may negatively affect them. If goods trade regulations were to have a negative impact on the region, Northern Ireland holds the right to pull the brake, giving a veto over the implementation of the new EU rules.

How does all this impact the steel industry?

As far as steel is concerned, the deal provided a solution to a protracted dispute concerning tariff rate quotas (TRQs) on steel. Citing the European Commission website, “Northern Ireland companies will now be able to use the EU's TRQs for steel, providing them access to UK-origin steel in these categories. This will allow them to avoid having to pay the 25% tariff linked to the EU safeguard measures currently in place for steel imports into the EU.”

The agreement, which still requires formal ratification by both sides, implies that the EU will drop its legal actions against the UK for non-compliance with the protocol previously in place.

The image was generated with the assistance of AI.