The EU is reportedly demanding guarantees that the UK will compensate the bloc if a future government reneges on the Brexit "reset" agreement being negotiated by Sir Keir Starmer. According to the Financial Times, a draft text on agriculture trade includes a termination clause requiring either party to cover the cost of reinstating border and infrastructure controls if they pull out.
The clause has been nicknamed the "Farage clause" by EU diplomats, reflecting concern that Reform leader Nigel Farage could cancel any UK-EU sanitary and phytosanitary agreement if he wins a general election. However, UK sources dismissed the notion, saying the clause is routine in international deals and works both ways, meaning the EU would also have to compensate the UK if it withdrew.
A Labour source said: "Exit provisions are a basic staple of any international trade agreement. Pretending these routine legal contingencies constitute a democratic outrage [is] frankly exhausting." Negotiations on the SPS deal have not yet started but are due to begin this month, and may take months to complete.
The SPS agreement is among the most complicated parts of the reset package, which also includes a return to the Erasmus programme, agreed before Christmas, and a deal on carbon dioxide emissions for goods exported to the EU. Anand Menon, director of UK in a Changing Europe, said: "We shouldn't be surprised that the EU is playing hardball. After all, they have decided that we need these agreements more than they do."
The FT reports that compensation would include costs of setting up infrastructure, equipment, recruitment and training for border controls, which could run to billions of pounds. The EU's €5.4bn adjustment reserve set up in 2020 allocated €920m to Ireland and over €800m to the Netherlands, with France receiving €672m and spending at least €200m on controls at ports including Calais and the Channel tunnel.
