The impact of the new Northern Ireland protocol: can Northern Ireland enjoy the best of both worlds?

From the 1 January 2021 new Protocol on Northern Ireland (NI) regulates NI’s trade with European Union (EU) and Great Britain (GB). These rules imply divergence between arrangements in NI GB creating an unprecedented situation where frictions arise two regions of same country. In this paper we use a multi-sector economic model to capture impact that potential non-tariff barriers tariffs will have NI. Simulation results demonstrate weaker relation EU greater negative economy. However, may be reduced by ability firms substitute intermediate inputs from for imports.