Government affairs

Today in Geneva, Switzerland, delegates to a Special Congress of the Universal Postal Union (UPU) reached an agreement on reforms to the way postal operators pay each other for delivering international mail—the so-called “terminal dues” system. The UPU is the United Nations agency that regulates international mail and has more than 190 members.

The agreement (Option V) was worked out between the United States, China and a group of European countries, and then adopted after an internal amendment and consultation process involving some 30 countries. Thanks to the agreement, the United States announced that it would remain a member-state in the UPU.

The Special Congress was prompted by a 2018 threat by the Trump administration to leave the UPU unless the United States could declare its own rates on inbound international mail, a segment of which lost money because rates for developing countries like China were set below domestic rates.

The UPU approved a special “carve out” for the United States, which will be allowed to declare its own rates by July 2020 on a reciprocal basis—which means that other countries can also self-declare rates on mail from the United States. All other countries will transition to a new rate system over five years.

“NALC is pleased that the U.S. will remain in the UPU,” President Fred Rolando said, “but it is too early to comment on the new agreement. We will work with our global federation, UNI Post & Logistics, to analyze the new terminal dues system and report our findings.”

NALC opposed leaving the UPU because it threatened the Postal Service’s $2.6 billion in international mail revenues, which earn an overall profit of some $600 million—even though USPS lost money on a narrow segment of small packets (e-commerce merchandise).