Postal delegates urge compromise at crunch UPU Congress
The world’s postal system faces a “nightmare scenario” if the US leaves the UPU next month, postal chiefs and country delegates warned at today’s opening of a showdown UPU Congress on terminal dues amid numerous appeals for compromise and a mixed message from US trade supremo Peter Navarro.
US-bound packages could pile up in peak season while the US would have to urgently negotiate new bilateral commercial agreements with more than 190 countries, with much higher rates for final-mile deliveries in the US, if the country quit the UPU, several delegates warned.
Over the next two days, UPU member countries will vote on different options to reform the remuneration system for inbound international bulky letters and small packets.
The US and several allies (including Canada, Brazil, South Africa and New Zealand) want Option B, which would allow countries to set their own rates from 2020 onwards with ceilings to prevent sudden excessive rises. China and some other countries favour Option A, a reform to increase existing rates and move to a single rate system.
In response, a group of countries (including France, Germany and Japan) has come up with Option C, a compromise that would combine higher rates and a move towards a single rate system from 2020 while allowing optional self-declared rates between 2021 and 2025 with country-specific ceilings based on domestic tariffs to prevent excessively high rates.
At the Congress opening session, UPU Director General Bishar Hussein made an impassioned plea for member countries to reach a consensus: “I call on all of you in the name of this historical Union to find the courage to choose the right path not just for yourselves, but for the entire industry.”
He warned at a post-opening press briefing, attended by CEP-Research, that a departure of the USA would cause a dramatic impact on the world postal system, forcing all countries worldwide to negotiate bilateral commercial agreements with the USA, covering not only rates but also topics such as customs clearance, security issues and returns.
“The moment a country walks away, all the rules no longer apply,” he made clear. “We would no longer officially exchange any packages with the US Postal Service. Their stamps would be invalid (internationally),” he noted. “It’s a nightmare scenario”.
But Hussein emphasized he was “very optimistic” that member countries would reach a compromise. He noted that Option C was fairly balanced, “bridged the extremes” and could get “a lot of support from a lot of countries”.
Similarly, Kenan Bozgeyik, Chair of the Extraordinary Congress (and Director General of the Turkish Post), warned that a US exit meant costs would increase and impact on consumers. “The solution is not the withdrawal of a country, the solution is the optimization of costs.”
During the opening session, the US position was clearly stated by Peter Navarro, Assistant to the President of the United States for Trade and Manufacturing Policy, who declared: “Everyone knows the system is broken.” But he underlined: “It is a success that we are here… the fact we are here tells me that a majority of countries want to keep the US in the UPU.”
Navarro said the USA has a “strong preference” for Option B as this would be the “clearest and fairest” path towards higher rates allowing the US to cover the costs of delivering imported packets. But he added that Option C would be “acceptable” to the USA, emphasising that “this second option is already a significant concession by the USA”.
“I’m asking you to support the US position. Now is the time to retool the system for the new world of e-commerce,” he declared.
Sally Mansfield, Australia’s ambassador to the UN in Geneva, declared that the terminal dues system for small packets “is not working for many countries” as it creates “winners and losers”. Australia Post, for example, “loses tens of millions of dollars” delivering imported e-commerce packages. She urged: “We must find a viable and sustainable way of resolving the problems… Now is the time to create real change. Let’s not waste this opportunity.”
Julian Braithwaite, the UK’s ambassador to the UN in Geneva, underlined that the country “remains committed” to the UPU vision and UPU reform and said the UK was concerned that sudden rises in rates could put up costs. “We are keen to find a solution that will keep the US in the UPU,” he made clear.
