Drawing an analogy to the role of immigration policy in processes of state formation, this article argues that the development of common asylum/immigration policies is indicative of the normative tensions implied in the EU's transition from a regulatory polity towards a political Union. Based on an analysis of key legislative texts from the emergence of common immigration policies until today, it is shown that policy developments are torn between three competing and conflicting political identities. The EU's traditional ‘market power' identity anchored in a regulatory approach focused on economic priorities has given way to an uneasy competition between aspirations at ‘normative power' identity based on universal liberal values and a politically predominant ‘statist' identity that addresses asylum/immigration policies as a corollary of and challenge to internal community-building and security. While these tensions are characteristic of the ‘liberal paradox' of democratic states' immigration policies, they are particularly challenging in the context of an increasingly contested European integration project.