EU's Dilemma: Keeping the UK in Customs Union for Regulatory Control

The European Union (EU) has expressed a keen interest in maintaining the United Kingdom (UK) within the EU Customs Union. This is not merely a matter of economic or trade benefits but is driven by a deep-seated strategic imperative to maintain regulatory oversight over Britain.

The Strategic Motivations Behind the EU's Stance

The primary reason for EU's insistence on the UK remaining within the Customs Union is the control over a significant economic entity and the strategic implications of this control. Historically, the UK has been a large services exporter, whereas Germany, France, and Italy heavily rely on exports of goods and agriculture. This disparity makes it challenging to accommodate all interests in trade negotiations. By keeping the UK within the Customs Union, the EU aims to strengthen its market position and influence.

The Controversial Issue of Northern Ireland

The EU's approach is further complicated by the case of Northern Ireland. The underlying motive involves the use of Northern Ireland as a potential lever to keep the remainder of the UK aligned with EU regulations. The EU utilized the threat of sectarian violence by Catholic terrorists in Northern Ireland, to which non-Catholic 'loyalists' would likely respond with more violence. This strategy was couched in what the EU framed as a morally justifiable and legitimate justification, but the true purpose was evident.

The Evolution of EU Attitude

Initially, the EU's position was inflexible and firm. However, as it became clear that this approach would not succeed, the EU's stance softened. The original demands would have severely impacted Northern Ireland, whereas the current arrangements offer significant medium-term benefits. This shift demonstrates the EU's willingness to be more flexible when it perceives its objectives cannot be achieved with an originally rigid stance.

The Economic and Political Implications

For the EU, keeping the UK within the Customs Union is optimal for economic reasons. It retains the economic weight of the UK while excluding it from trade negotiation mandates. The UK is a vital services exporter, while Germany, France, and Italy heavily rely on goods and agriculture. This difference often makes it challenging to accommodate everyone's interests in trade deals. The UK's departure from negotiations means the EU can move more quickly towards closer union without the UK's often obstructive stance.

The UK's position in the EU's regulatory framework also means it will have to follow EU rules without a say in them. This shift should simplify the process of passing new rules and moving towards further integration, as the UK was a consistent obstacle and defender of different approaches to regulation.

The Broader Context and Criticism

Some critics argue that the EU's primary motivation is financial. The assumption is that the UK is a wealthy nation and therefore a priority in terms of regulatory control. The EU is less concerned about the UK's contributions and more about its regulatory influence over a significant market.

There is a suggestion that instead of maintaining the current complex arrangements, the EU could simply impose requirements on Northern Ireland and the Republic of Ireland to ensure compliance with EU regulations. This approach would eliminate the need for the Northern Ireland Protocol, leading to a simpler and more straightforward solution.

The Ongoing Debate and UK's Response

The UK, after its misguided attempt to implement an overly simple solution, has realized the complexity of the situation. The EU's demand for alignment with the Irish border and Good Friday Agreement (GFA) rules presents a significant challenge to the UK's autonomy. The UK has now rushed into implementing a decision without thorough preparation, leading to unforeseen complications.

The situation remains a source of debate and tension between the UK and the EU. The UK's request to be removed from trade negotiation mandates and the EU's desire to maintain regulatory control over a significant market highlight the complex dynamics at play.