GENEVA — For only a third time in its 144-year history the U.N. postal agency will hold an Extraordinary Congress but this time a potential U.S. withdrawal from the organization rides on the outcome, an agency spokesman said on Tuesday.
The Universal Postal Union’s gathering will be held in Geneva from September 24-26. Delegates will consider what to do in the face of the announcement last year by U.S. President Donald Trump’s administration to withdraw the United States from the 1874 treaty that is the basis for the UPU, a Swiss-based international organization that coordinates mail activities among its 192 member nations and territories.
“This third one has only one subject — it’s remuneration rates,” UPU spokesman David Dadge told a U.N. press briefing in Geneva.
The Trump administration’s position is based on complaints from U.S. businesses that inbound packages sent from China and other countries enjoy lower rates than what domestic shippers pay. The remuneration rates are the tariff or compensation paid by the “sending” country to the “receiving” country.
“In essence, it is for what’s called, in the terminology, bulky letters and small parcels. You may know it as something else. It’s the e-format; it’s e-commerce. It’s worth billions all over the world,” said Dadge. “The United States is possibly the biggest e-commerce market, and last year it wrote to us and said it would be leaving this year unless we changed our process in terms of remuneration rates.”
The UPU said the methodology for calculating remuneration rates for the delivery of inbound international letters and small packages is typically reviewed and improved during each quadrennial Congress. The next Congress is scheduled for August 2020, and the remuneration rates that are decided there will come into effect in January 2022.
“Bearing in mind cost-coverage and market distortion concerns raised by several countries during its October 2018 session — including the United States, which cited the remuneration of small packets as a driving factor in its intent to withdraw from the UPU treaties in October 2019 — the UPU Council of Administration decided to fast-track potential changes to the remuneration system,” UPU said in a ‘fact sheet’ on the Extraordinary Congress.
Dadge told reporters a large U.S. delegation is expected to arrive in Geneva next week, led by a top White House trade adviser, Peter Navarro, and the Americans expect UPU to sponsor “a serious discussion on this issue” among 800 participants from more than 100 countries.
“And hopefully by the end of those three days, we will have a resolution to the issue,” Dadge said. “In essence, there are three possible solutions.” Those, he said, include sticking with the status quo while “increasing the pace of delivering the change”; turning to “self-declared rates,” which let U.S. officials set how much other countries pay to deliver their mail to American customers; or a combination of the two.
“It is, in reality, a trade negotiation,” he added. But for the UPU, the response to the U.S. withdrawal threat has broader consequences.
“This decision underscores the importance member countries attach to keeping the UPU intact and responsive to the needs of all,” said UPU’s director general, Bishar Hussein. “I am confident that, as always, the UPU will be guided by the spirit of dialogue and cooperation to find the required solutions in Geneva.”
The #UPU_UN’s #postal network comprises 192 countries with more than 668,000 post offices spanning the globe. Multilateral agreements administered through the #UPU ensure post can reach everyone, everywhere. #postaltogether @PostEurop @BisharAmb @ClivazPascal @PTTCorporate @UN pic.twitter.com/qVxtTWPpbL
— UniversalPostalUnion (@UPU_UN) September 16, 2019
History in the making
UPU, based in the Swiss capital Bern, is one of the two earliest international organizations that became United Nations-affiliated agencies in the late 1940s. It was created out of the 1874 Treaty of Bern that resulted from a Swiss-hosted international conference to regulate mail delivery among nations.
The first-ever Extraordinary Congress in 1900 celebrated the 25th anniversary of the UPU in Bern. The second was convened in 2018 at Addis Ababa, Ethiopia, to discuss pressing topics related to the sustainability of UPU and the postal sector.
Among the biggest modern pressures on the organization is the e-commerce boom in package deliveries. Because of UPU’s international postal rates, known as “terminal dues,” it now costs 50 percent or less to send a package from China to the United States than it does to send the same package within the United States.
The Trump administration favors letting the United States and other countries declare their own rates. China has proposed paying more to the United States, but continuing to pay less to other nations.
Peter Yeo, president of Better World Campaign and senior vice president at United Nations Foundation, said in an op-ed article published on Tuesday in the Hill that the UPU meeting in Geneva may affect “every American business that ships small packages overseas, every American living abroad, and anyone with a stake in stopping the illicit opioid trade.”
That is because, he said, the effects of withdrawing from UPU “could spark a very visible chaos that turns ordinary business transactions into ordeals, and shreds the bottom line of small business owners and entrepreneurs across the country.”
Yeo said the Trump administration is right to address this issue, but the question is how. If the U.S. leaves the UPU, Yeo said, it would occur just a few months before the 2020 presidential primaries, potentially affecting the ability of both American service personnel and civilians living overseas to vote by absentee ballot.
But perhaps the most surprising consequence of a U.S. withdrawal from the UPU, he said, may be its weakening of America’s ability to stem the flow of illicit opioids into the country. More than US$800 million in opioids were shipped from China to the U.S. over two years, according to a 2018 report from the U.S. Senate Homeland Security Committee.
U.S. authorities have been leveraging UPU membership to institute an exchange of advance electronic data among 80 nations by 2020 that will let customs authorities improve monitoring and screening of high risk packages. A new U.S. law requires applying such data to all incoming packages by 2021, but withdrawing from the UPU would deny U.S. authorities the use of the data.
“Give U.S. businesses the predictability they need without the fear of a looming postal war. Let Americans living overseas mail their ballots cheaply and with ease,” Yeo advised. “Let Congress’ efforts to battle the illicit opioid market continue. Level the playing field — don’t abandon it.”