Paul Vallely of Kukoon Rugs says the Windsor Framework has brought vital clarity to businesses in Northern Ireland. Photo: Frank McGrath
UK prime minister Rishi Sunak and European Commission president Ursula von der Leyen at the Guildhall in Windsor, Berkshire, after striking a deal over the Northern Ireland Protocol. Photo: PA
Clarity and confidence will be the biggest gains for business from this week’s Windsor Framework, which is designed to break the impasse on trading relations that dogged the Northern Ireland Protocol.
While retailers and shoppers won’t notice much difference in their daily experience, the new deal – endorsed by UK prime minister Rishi Sunak and European Commission president Ursula von der Leyen – is being warmly welcomed by manufacturers and business groups.
They say the return to power sharing in the Stormont Executive would be the icing on the cake.
“There was a very strong ‘remain’ vote here,” said Eamonn Connolly, manager of the Newry Business Improvement District group.
“The protocol worked, and there’s very much a degree of pragmatism and resilience here to getting on. But the big challenge that we have found, and the unintended consequence, was the collapse of Stormont.
“That has had a real impact on our ability to deliver projects and inward investment being stalled.
“The big thing with us with Brexit was uncertainty. Brexit brings both economic and identity issues here. We had people contacting us saying ‘Can we still cross the Border?’ and not understanding the Common Travel Area.
“In the initial days, we had a lot of interest from businesses to see if they could open a location here to get the best of both worlds [UK and EU markets]. I think an element of that stalled with the uncertainty as to where it was.
“The collapse of Stormont has had a bigger negative impact. So we welcome the Windsor Framework.”
What the Windsor Framework has done for us is give all our international trading partners the confidence that they didn’t have last week
Mr Connolly’s view is echoed by Julie Gibbons, president of Newry Chamber of Commerce.
“The Good Friday Agreement allowed the Border to disappear. Brexit brought uncertainty and a lack of clarity, but we had to get on with it,” she said. “The problem was exacerbated by the collapse of the Northern Ireland Executive.
“We welcome the Windsor Framework. Its compromise is positive, and while we still need a bit of detail, we feel its implementation needs to be swift because people have put investment decisions on the backburner.”
On a hill on the outskirts of Newry stands Two Stacks, a small distillery with big ambitions and a big reach into 35 international markets, including Australia, Japan, Taiwan, the US, Canada and all across Europe.
Set up two years ago, it faced challenges of Covid and Brexit confusion, but CEO Shane McCarthy and financial director Liam Brogan faced them head-on.
One challenge was educating European markets that trade was possible and there were no barriers to it.
“They didn’t fully understand what the position was with Northern Ireland and European customs,” Mr Brogan said. “When Brexit first came around, it took me six months educating our customers, but some are still trying to figure out the difference between the Republic of Ireland and Northern Ireland.
UK prime minister Rishi Sunak and European Commission president Ursula von der Leyen at the Guildhall in Windsor, Berkshire, after striking a deal over the Northern Ireland Protocol. Photo: PA
UK prime minister Rishi Sunak and European Commission president Ursula von der Leyen at the Guildhall in Windsor, Berkshire, after striking a deal over the Northern Ireland Protocol. Photo: PA
“So I think this Windsor deal does help it a bit more.”
Mr McCarthy said: “What the Windsor Framework has done for us is give all our international trading partners the confidence that they didn’t have last week.”
Mr Brogan added that daily transactions, such as buying bottles in from England, will become easier. This is because the new green lane and red lane will help streamline paperwork and declarations.
“It used to be a bit of an admin hassle declaring that the bottles were coming here and not going elsewhere into the EU,” he said.
“With this green lane, it will be easier. Bottles are coming to us under one commodity code, but then leaving here as bottles of whiskey, which is a separate commodity code.
“That’s our manufacturing process here, whereas if we were based in Dundalk and buying the bottles from GB, it would be different because they would be coming into the Republic of Ireland, so there would still be that bit of customs clearance to do across the Border.
“To a degree, I see the Windsor deal as a bit of a backyard for GB businesses too – to come here and set up their businesses to get easy access to Europe.”
A lot of our business is online, and once EU customers see we are a UK business address, many of them are much more reticent about buying
Mr McCarthy added: “It should be good for foreign direct investment. If anyone deserves a day in the sun, Northern Ireland is well up there.
“I think the biggest benefit is us not having to educate the rest of Europe, and clarifying that Northern Ireland does have direct access to EU and GB markets.
“I just see the foreign direct investment looking very favourably on Northern Ireland, and businesses asking, ‘Are we going to invest in Belfast or are we going to invest in Dublin – which is more favourable?’. London is probably going to invest in Belfast.
“There are people that are calling Northern Ireland the Singapore of the west, where you get these trading lanes and it becomes a hub.
“I think it’s the beginning of something. And that’s going to give huge confidence.”
Paul Vallely, managing director of Kukoon rugs, said 25pc of its business used to come from EU customers. However, Brexit had a hugely negative impact on consumer confidence, resulting in that figure dropping to 6pc.
Re-educating customers over the last few years has seen some of that business come back – maybe to a level of 12pc – but Mr Vallely feels it will never return to the pre-Brexit high.
“A lot of our business is online, and once EU customers see we are a UK business address, many of them are much more reticent about buying,” he said.
“It’s just human nature. They don’t understand the complexities of the process [and that buying from Northern Ireland is different].”
Kukoon also runs a business offering third-party logistics to other direct-to-consumer retail brands, including warehousing and shipping for other online retailers.
It is now in an advantageous position where Northern Ireland straddles both the EU and UK markets. Mr Vallely believes the clarity being brought by the Windsor Framework is vital.
“The key benefit to people is they don’t have to carry stock in the UK and Europe,” he said. “They can stock it all in Northern Ireland and ship to both. It’s a unique opportunity for Northern Ireland.”
