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It's easy to find that e.g. the EEA does not include the Common Fisheries Policy because Iceland and Norway didn't want to have their fish stocks shared/managed in common with the EU. (Aside: seemingly as a result of these exclusions, Norway has to export most of their fish raw to Poland where it is processed, since imports of processed fish are taxed higher by the EU.)

But why is the customs union (EUCU) excluded form the EEA? Which countries oppose[d] a customs union extending to the EEA and why?

(I could find out that Norway taxes alcohol more heavily and imposes quotas on imports from the EU even for personal use, but that seems like a marginal issue. Norway conducts some 10% of its trade under FTAs agreed outside the EEA, which Norway can do because it's not bound by a common trade policy with EU; but I'm also not sure this was a substantial reason for EEA not having a customs union.)

I suppose a generic answer may be the (maximal) avoidance of political integration, which would indeed also cover foreign policy in general (also excluded from the EEA) and a common foreign trade policy in particular:

During the negotiations on the EEA Agreement, the search for an institutional framework proved to be one of the greatest challenges. The EFTA states tried to avoid any political integration that would pool national sovereignty in common institutions.

But can anything more specific than this be said about why the EEA not having a customs union?

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    Alcohol imports was in fact one major concern when Sweden decided to join the EU. It was far from a marginal issue to politicians or the public. Alcohol policies are a big deal here.
    – user141592
    Dec 29, 2020 at 18:16
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    @Johanna: interesting; it looks like Sweden actually tried to keep their import restrictions even after joining, but was slammed by the CJEU. So maybe some individuals foresaw this outcome, but it looks the Swedish government might not have...
    – Fizz
    Dec 29, 2020 at 18:18
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    Doesn't being out of the CFP and CAP make a full customs union impossible?
    – Relaxed
    Dec 29, 2020 at 21:30
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    @Relaxed: I'm not sure. Other countries in the EU have or had some CAP derogations.
    – Fizz
    Dec 30, 2020 at 6:54
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    Isn't alcohol given special treatment because of excise duty?
    – phoog
    Dec 30, 2020 at 14:46

1 Answer 1

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At least in the case of Norway there's quite a few things we prefer having our own customs on, separate from the EEA, for a couple of different reasons:

Health

We tax some products extra in an effort to keep consumption low. This is primarily true for alcohol and tobacco. These are heavily taxed in part for health reasons. For example the cheapest 40% vodka you can buy in Norway at the moment costs NOK 412,- pr liter. (about €40) Meanwhile in Germany you can get equivalent products for €12/liter.

Farming

Norwegian farm are mostly small and hilly, and labour costs are high. As a result with the possible exception of fish, it'd not be possible to produce food profitably in Norway without tariffs putting a brake on imports. It's been seen as politically desirable for several different reasons to preserve Norwegian food production though, and for that to work out, we do need our own customs and higher tariffs on some products than the EU has. (this is also one of the main reasons why food is somewhat more expensive in Norway than it is in EU countries)

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  • Excise taxes on alcohol and cigarettes are not set by the EU. They vary from one EU country to another. Therefore, the example of alcohol does not support the point about health. As to farming, there are lots of farm subsidies in many EU countries. I don't know much about the mechanics, but it's certainly plausible that they would allow Norwegian farmers to continue to produce food profitably. Accordingly, a more detailed analysis is necessary to support the assertion that joining the EU customs union would hurt Norwegian agriculture.
    – phoog
    Mar 26, 2021 at 17:24
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    Certainly it'd be possible to subsidise farms sufficiently to make them competitive, instead of putting tariffs on imported foods to make them less competitive, and which solution is preferable is a political question. Norwegians have this far preferred a combination.
    – Agrajag
    Mar 27, 2021 at 14:09

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