The Universal Postal Union (UPU), a postal treaty that subsidizes shippers from “developing” countries, such as China, is up for renegotiation in 2016. Critics of the UPU say that the plan puts American e-commerce businesses at a disadvantage by subsidizing shippers from countries thought to be developing.
According to Fortune, the Government Operations subcommittee of the House Oversight Committee held a hearing on June 16, beginning what chairman Mark Meadows called a “broader push for a U.S. reform strategy.”
The UPU sets international postal standards, including terminal dues agreements between post offices. Meadows called the dues “trade distortion,” and claimed that they left American businesses at a disadvantage by favoring shippers from developing countries. David C. Williams, Inspector General of the USPS, said that the dues left USPS with little bargaining power for fairer postal agreements.
The debate now, according to the article, is what can be done to fix the issue. Witnesses representing major shipping companies such as FedEx, USPS, Amazon, as well as the State Department, voiced their opinions.
“The tradition of the UPU is that the haves pay the have nots,” said Nancy Sparks, head of regulatory affairs for FedEx, in the article. “What’s brought this problem to a head is that the have nots suddenly have a lot.”
Amazon representative Paul Misener said that the U.S. should make postal rates part of diplomatic discussions with China, adding that the UPU was “an imbalance that makes no sense to [Amazon].”
There is currently no timetable for terminal dues reform, but these rules can be amended at the next UPU Congress in September 2016. Robert Faucher, the State Department’s lead negotiator at the UPU, said that the goal for the UPU Congress would be to establish a task force to explore reform.
