No Advantage from the Northern Ireland Protocol

It has often  been claimed that Northern Ireland’s unusual post-Brexit trading arrangements under the Protocol/Windsor Framework yield the unique and powerful advantage of  dual market access (DMA) under the Protocol/Windsor Framework. It is argued that Northern Ireland has the economic benefit from being a member of both the UK’s internal market (68 million people) and the EU27’s Single Market of about 450 million. It is rarely considered whether it is still worth having DMA if that market access comes at the price of having higher business costs in terms of importing goods from GB to NI given frictions resulting from the Irish Sea Border.

We should go to the statistics and try to test how strong the advantages of DMA really are. The Protocol has been in force since January 2021 so we now have data for 2021, 2022, 2023 and, in some cases for 2024 and part of 2025.

It has been claimed that DMA would lead to more international businesses coming to Northern Ireland https://www.theguardian.com/politics/2023/feb/28/sunak-northern-ireland-access-uk-eu-markets-trade-deal.  Big 4 business advisory firm EY has an annual publication showing numbers of FDI projects coming into the UK regions  https://www.ey.com/content/dam/ey-unified-site/ey-com/en-uk/newsroom/2025/06/ey-uk-attractiveness-survey-06-2025.pdf.In 2023 985 projects came into the UK of which 18 went to Northern Ireland, so Northern Ireland’s share was 1.8%. In 2024 853 projects came into the UK of which 17 or 2% went to Northern Ireland. Northern Ireland’s share was a bit below its share of UK population or GDP. These indicators would imply Northern Ireland’s share should have been in the range 2.3% to 2.8%.

Northern Ireland’s share of total FDI jobs created in 2023 according to the EY data was 2.7% but in 2024 only 1%. The latter figure was well below what might have been expected as Northern Ireland’s relative share within the UK. It is a result which is hardly consistent with great gains from DMA. The latest official data from the Office for National Statistics  https://www.gov.uk/government/statistics/dbt-inward-investment-results-2024-to-2025 indicates that during 2024-25 there 1375 FDI projects which came into the UK and of these 37 came to Northern Ireland: 2.7%. At the same time Northern Ireland’s share of all the jobs created through FDI was just 1.4% (946 out of 69,355).

As is well known, and often a subject for complaint on the part of many politicians in Northern Ireland, most of the inward investment coming into the region comes to Belfast. Across the world businesses are attracted to the places which have the larger local labour markets. The EY data also allows us to compare Belfast to other big cities across the UK (excluding London since it is the UK capital and the UK financial services sector is dominated by the City of London). In 2020 the rate of FDI projects (number of projects per thousand of population) coming into Belfast was higher than that going into each of the four UK cities- Manchester, Glasgow, Birmingham and Edinburgh- which performed best outside of London during 2020-24 on average. See Table 1:

Table 1: The EY data on number of FDI projects coming into Belfast compared to the four best performing UK cities (outside London), 2020-24

Note: No.: Number of new FDI projects in that year.

Rate: Number of FDI projects per 1000 of population. City populations relate to the narrow city limits rather than wider conurbations and were based on estimates for 2024, linked to the 2021 Population Census results, made by Core Cities. The population sizes were: Belfast 352,000; Manchester 590,000; Glasgow 650,000; Birmingham 1182,000 and Edinburgh 531,000. (The figure for Birmingham “looks” relatively high but note that this would introduce a bias in favour of Belfast in terms of the comparisons).

Source: https://www.ey.com/content/dam/ey-unified-site/ey-com/en-uk/newsroom/2025/06/ey-uk-attractiveness-survey-06-2025.pdf

By 2024, four years into the operation of the Protocol/Windsor Framework, Belfast’s relative position had declined. Its rate of FDI projects was roughly equal to that of Birmingham but now far behind the 3 other GB cities. In fact, the absolute number of FDI projects coming into Belfast had fallen during 2020-24 from 25 to 7. Precisely the opposite of what might have been predicted if dual market access was having a significant impact.

Let us look at the second claim made about DMA: a double dividend for Northern Ireland, booming sales to GB and also to the EU. The best official data source for this is probably Northern Ireland Statistics and Research Agency’s (NISRA) data series the Northern Ireland Economic Trade Statistics 2023 (NIETS) https://www.nisra.gov.uk/statistics/business/ni-economic-trade [Note 1]. This data covers the 2020-23 period: the first three years of the Protocol.

Comparing 2020 with 2023 Northern Ireland’s total sales of goods (going to anywhere in the world including Northern Ireland) grew by 46.1%. Growth of sales to GB was rather better at 67.6% and sales to the Republic of Ireland boomed by 107.2%. Celebrants of dual market access might be inclined to point to these two figures suggesting booming sales both North-South and West-East.

At the same time, the NISRA data also show that the value of Northern Ireland sales to the EU other than the Republic of Ireland actually fell during 2020-23. That result is very hard to square with DMA having any substantial impact.

Using an alternative and possibly less reliable source, HMRC’s Regional Trade Statistics based on VAT figures https://www.uktradeinfo.com/trade-data/regional/2025/uk-regional-trade-in-goods-statistics-first-quarter-2025/ [Note 2], Northern Ireland’s sales of goods to the EU did grow relatively rapidly during start 2021 to start 2025 [Note 3] by 44.1% compared to the UK’s growth of such sales by only 26.6%. That might seem to indicate the benefits of DMA but is notable that Northern Ireland sales of goods to non– EU markets grew even more rapidly: by 51.1%, that happened without any DMA advantages.

To conclude, when we look at the actual data on numbers of investment projects coming to Northern Ireland or the growth of trade, the evidence for DMA in practice appears rather thin. Either the DMA advantages hardly exist at all or they are in practice quite small or, if they are present, they are being masked by other more significant determinants of Northern Ireland’s economic performance.

To the extent that the last scenario is true then there is a real threat that some of the attention being given to DMA is actually a dangerous diversion. If politicians, business representatives and other policy makers want to improve the growth performance of the Northern Ireland economy there are at least three areas which should be a much higher priority than DMA:

• cut the price industry pays for electricity (currently Northern Ireland prices are amongst the highest in the Western world)https://www.bbc.co.uk/news/uk-northern-ireland-67474522#:~:text=Small%20businesses%20in%20NI%20were,(31.8%20p%2FkWh). ,
• set the funding of the water and sewerage system on a sustainable basis so that capacity constraints no longer block business investment https://www.northernirelandchamber.com/ni-chamber-news/northern-irelands-wastewater-crisis-is-strangling-growth-stalling-homes-and-failing-communities/,
• and reform the planning system so that it can make critical decisions without endless delay (e.g. after 8 years the US owned Dalradian gold and rare earth minerals’ planning application to mine in County Tyrone is still awaiting a decision and this is causing reputational damage in terms of international investors https://www.thurrockgazette.co.uk/news/national/25635775.delays-gold-mine-project-harming-nis-reputation-us-ambassador-warns/). ”

Dr Birnie is Senior Economist Ulster University Business School

Note

1. NIETS is normally published in December of each year providing data for the previous calendar. Unfortunately, the data for 2024 will not be available until March 2026. So, the 2023 data remains the most up-to-date available from this Northern Ireland official data source.
2. HMRC 2025, UK Regional Trade in Goods Statistics: First Quarter 2025. The HMRC data source is based on a different method of data collection/estimation as compared to the NISRA NIETS data. The HMRC data at the regional level probably involves a substantial element of proportioning out sales figures from multi-regional firms in proportion to the employment of their various regional branches.
3. Quarter 1 2021 to Quarter 1 2025.