The essence of the issues of both the Customs Union and, more broadly, the European Union itself can be summed up in a single sentence:
"It's not all about economics. It's all about politics."
At the very least, in may not literally all be about economics. However, it's certainly true that many people believe - and many Remainers pretend to believe – that it's all about economics.
In terms of detail, the former Conservative Chancellor, Lord Lawson, captures this when he recently said that Lord Patten advanced a "political argument dressed up as a trade argument". Lawson was specifically responding to Lord Patten's "wrecking amendment" in the House of Lords. Lawson developed his it's-all-about-politics argument by stating the following:
"I can see there are political reason for remaining in the EU, but I think the political reasons for leaving are much stronger. But what it is absolute nonsense to suggest is that there is an economic case for what is being proposed."
He added that the Custom Unions would leave the UK in a "quasi-colonial" status. Lawson said all this after some Conservatives (who'd joined with opposition parties) inflicted a defeat on the Government. This means that the issue will now have to return to the Commons. Needless to say, the Government doesn't have a majority in the Lords.
The problem with what's going on in the House of Lords is that many people may find themselves in a quandary. Personally, I've never been particular critical of the Lords in the past. So I can't suddenly claim to have a major problem with it simply because it's attempting to subvert Brexit. That's not to say that I didn't formerly have any problems with this institution. It's just that I never took a radical position against it.
This is similar to what happened with the Leave referendum itself. That is, if the result were inverted in every respect, then no Remainer would ever ask for a repeat referendum. Similarly, if the Lords had never subverted Brexit, then many Brexiteers would never have developed a big problem with this institution.
The issue of the Customs and the EU can of course be both economic and political in nature. However, depending on the audience and the context, economics or politics will often be stressed. To an audience full of Remainers, political factors and values will be stressed. In mixed audiences, Remainers will stress economics - the politics, projects and values of the EU will hardly be mentioned at all.
This difficulty of disentangling the economic from the political is best demonstrated when it comes to the EU's commitment to the “free movement of labour”. (This only applies to “labour” within the EU. It has nothing to do with the free movement of people outside the EU into the EU.)
Now is the EU's commitment to the free movement of labour an economic or a political commitment? Is it both? For businesses and many of those on the Right, the EU's Single Market (to be specific) was an economic commitment. For socialists and/or “progressives”, on the other hand, it's a political commitment. However, when the architects and creators of the Single Market spoke about their child, they tended to speak in entirely economic terms. For example, they talked about “increased competition”, “economies of scale”, the “allocation of resources” to the best places, “efficiency”, the “free movement of goods”, etc. And even with the “free movement of labour” (not “the free movement of people”), the emphasis was on competition. Despite saying that, here again there was still a political component. After all, the EU's Single Market is about integration; and (as stated) that can only be the result of political action and legislation.
The other thing that's worth stating is that it's the political climate that largely determines the economic realities anyway. So, in that sense, it's hard to split the two.
Put simply, the political and legal dreams of Remainers and the EU itself are driving all these references to economics, not the other way around. The political and legal agendas of the EU are fundamental and primary: almost everything else serves those goals. At least that's the case for most British Remainers and all pro-EU politicians.