Discovering Northern Ireland: Dual Market Access Explained

Written by Sterling Content
August 25, 2023


Written by Sterling Content
August 25, 2023

“Northern Ireland is in the unbelievably special position, a unique position in the entire world, in having privileged access not just to the UK home market, which is the fifth biggest in the world, but also the European Union single market. Nobody else has that,” said UK Prime Minister Rishi Sunak.

Sunak was referring to Northern Ireland’s unique tariff-free access to both Great Britain (England, Scotland and Wales) and the European Union (EU) under the February 2023 Windsor Framework. Adopted by both the UK and EU, the Windsor Framework aims to ease post-Brexit trade between Northern Ireland and the rest of the UK, with implementation expected from October 2023. The framework modifies the 2021 Northern Ireland Protocol that kept the province inside the EU’s single market for goods.

In July, the British Chamber of Commerce in Japan (BCCJ) focused on this topic at an event held at the British Embassy, Tokyo. An expert panel facilitated by former BCCJ President David Bickle OBE tackled the key issues, with speakers comprising Nick Caldwell, head of APAC at Invest Northern Ireland; Steve Harper, executive director of International and Skills Group at Invest Northern Ireland; Emi Iwasaka, researcher at Itochu Research Institute Inc; and Peter Harris, partner at law firm Clifford Chance.


Northern Ireland’s unique position

Mark Graham, regional director for northeast Asia at Invest Northern Ireland, opened the event by noting that the province has attracted 1,200 international companies to establish operations. Of those, 70% have reinvested.

One asset is the skilled workforce. Northern Ireland’s population of around 1.9 million is relatively young (compared to countries such as Japan) with around half the province’s populace aged under 40, said Caldwell.

In Northern Ireland, the Department for the Economy’s strategy for a 10X economy, which is based on the pillars of innovation, inclusivity and sustainability, aims to increase prosperity based on the key sectors of digital and creative tech, advanced manufacturing and engineering, life and health sciences, and fintech and financial services, he added.

The Windsor Framework facilitates two “lanes” for goods arriving in Northern Ireland from Great Britain, with a “green lane” for goods set to remain in the British province and a “red lane” for goods that may be exported to the EU. This ensures that products in the green lane require minimal checks or paperwork, compared to their red lane counterparts.

With Northern Ireland selling three times as much to Great Britain as to the Republic of Ireland, the Windsor Framework is key in facilitating smooth movement of goods to its major market.

There are also no customs duties or tariffs applied on goods moving between Northern Ireland and the EU, with Northern Ireland maintaining regulatory alignment on goods within the EU. A Common Travel Area remains in place between the UK and Ireland, allowing Irish citizens to work freely in Northern Ireland.

“When you combine this unique market access with Northern Ireland’s skilled workforce, competitive operating costs and business-friendly environment, it further strengthens the region’s proposition as a prime location to establish or grow a business,” according to Invest Northern Ireland.

Explaining the new arrangements, Clifford Chance’s Harris gave the example of an English sausage. Since the withdrawal of the UK from the EU, a lack of physical trade barriers between Northern Ireland and the Republic of Ireland, an EU member, had made sending the English sausage to Northern Ireland extremely complicated.

Under the Windsor Framework, though, the English sausage can easily enter Northern Ireland, he said.

This also applies to Japanese companies seeking access to the EU and UK markets.

“If you’re a Japanese sausage manufacturer, for example, and you want to expand in Europe, you can set up a factory in France or Holland to sell into the EU, but you can’t sell into the UK [without specific export measures],” said Caldwell. “However, if that Japanese sausage manufacturer sets up in Northern Ireland it can do both easily.”

In short, the Windsor Framework is “a gamechanger for Northern Ireland,” said Harper.

Describing the framework as a risk-based approach, Harris explained that “with surveillance and intelligence-led search, intra-UK trade can move freely without the need for a hard border within the island of Ireland, and that puts Northern Ireland in this unique and special position where issues of cross-border trade have been removed.”


Japan business

Northern Ireland continues to benefit from its growing reputation in Japan as a place of high-quality products and services, as well as for trade and investment.

Engineering “has been at the heart of Northern Ireland since the Industrial Revolution,” said Caldwell, pointing to Antrim-based Wrightbus, a supplier of hydrogen fuel-cell buses, whose Gemini 3-bodied Scania double-decker buses are used by Tokyo sightseeing operator Hato Bus.

Belfast is also home to Short Brothers plc, the world’s oldest aerospace company and a supplier to Airbus.

Japanese companies have seen the benefits of investing in Northern Ireland, with companies such as internet services giant Rakuten joining the more than 1,200 international businesses operating in the province via the setup of its Software Engineering R&D Lab.

Belfast is rated the top city in Europe for software development investment, attracting companies such as Rakuten due to Northern Ireland’s specialist skills in data analytics, cybersecurity and advanced networks.

Other Japanese companies to have established a presence in Northern Ireland include Fujitsu Services, a provider of business-to-business technology solutions, and auto-parts maker Ryobi.

Materials handling has also become a major industry in Northern Ireland, with companies such as Tyrone-based Terex serving as key suppliers to Japan’s construction and recycling industry.

In life and health sciences, firms such as Belfast-based Fusion Antibodies and Antrim-based Randox Laboratories are well established in Japan.

Northern Ireland is also a significant exporter to Japan of products such as beef, gin and whiskey.

Moreover, Japanese investors have the added protection of the investment protocols under the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), which the UK formally joined on July 16.

With all these considerations, the Windsor Framework is “sure to encourage Japanese companies to make long-term investments in Northern Ireland,” concluded Iwasaka.