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Hello,

I've been thinking about this recently (Brexit and everything...). What if Napoleon's continental system instead of being a blocus of all British goods was instead a customs union modeled on an early Zollverein?

The first Zollverein treaty was signed in 1833 while the Berlin decree establishing the Blockade was signed in 1806. We're not too far off and the wikipedia page on the Zollverein indicates that the Confederation of the Rhine countries tried to implement something like that before Napoleon forced them to implement the blocus.

Let's imagine that in 1806, somebody with a bit of economic expertise convince Napoleon to slightly modify his original idea (who was behind it by the way?). Maybe Hans von Bülow who became Finance minister of Westphalia in 1808 and had a part in the early steps leading to the Zollverein somehow gets the ear of Napoleon or close advisors?
Instead, an early European Free Trade Area with common external tariffs (as in the 1833 Zollverein) is implemented with:
- France
- Batavian Republic or Kingdom of Holland (not sure if the switch was made yet)
- Confederation of the Rhine, including allies like Saxony, Baden, Bavaria, Württemberg and client states like Westphalia and Berg.
- Kingdom of Italy
- Swiss Confederation.

After the creation of the Duchy of Warsaw, the country will most likely join this customs union. Spain will likely too, after a bit of strong-arming.
Prussia and Austria will probably be forced to join after a military defeat (Tilsit for Prussia, 5th coalition for Austria).
Denmark-Norway might, as they originally joined the Continental System. Bernadotte's Sweden might as well, after a pounding by Russia organised during Tilsit.

Russia will be left out, as it would be a bit much to ask them to agree to a common customs policy.
Basically, you have approximately the same area as the current EU (post Brexit, sorry), minus Portugal and the Baltic states under Russia.

My questions are then:
1. Will this still hurt the British economy, as British goods will be allowed but under strong tariffs thus making European goods more attractive to import?

2. Will this create an economic bonus for the countries involved, probably mostly France at first which will likely be able to take advantage of the Free Trade area to jump start its industry?

3. Will this be resented less than the OTL Continental System, as countries will still be able to trade goods with Britain that they want/need, albeit at an higher cost (due to tariffs)? Also, I expect they should have a (very theoritical) say in how the tariffs levels are set up.
3.b Side-question: Will this anger less the Spanish so much so that they won't annoy Nappy that much that he decided to invade them?

4. In the long run, can this strategy lead to Great-Britain suing for peace (probably pairing that with no Spanish Ulcer or Russian debacle, or ideally neither)?
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