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Diplomacy in Action

FedEx Comment on Doha Congress Resolutions and Future Work of the UPU CA and POC

March 15, 2013


C 2. Designation of member countries prepared to assume the vice-chairmanships of Congress and the chairmanships and vice-chairmanships of the committees and/or to sit on the restricted committees

What committees is the U.S. trying to get on or intending to participate in regularly? I notice that the U.S. has very few leadership positions on the list.

C 6. Continuation of the study on extraterritorial offices of exchange, international mail processing centres, and issues surrounding the designation of multiple operators in a single country

What is the U.S. position on ETOEs? Access to IMPC codes by non-DO’s. What is the U.S. position on "allowing access to specific products and services to external stakeholders" and "develop[ing] the governance principles and rules applicable to each product or service the UPU wishes to make available to wider postal sector players"?

C 9.Postal markets development

We would like to be able to give input to our government as it participates in the studies (key drivers, emerging technologies, government challenges)? For example, we can help identify some of the foreign governmental challenges (or trade barriers). This is something we do regularly with USTR, so that they can address such challenges in trade agreements – the U.S. Government should follow this approach here as well. This is definitely an item in which we support the involvement of the Consultative Committee. We would also expect access to the resultant analyses in a timely manner.

C 11. Postal market development –Worldwide postal trade facilitation for micro, small and medium enterprises (MSMEs)

Customs and security procedures for SME’s should not be exclusive (I don’t even know what "common principles" means). The idea of "simplified export and import procedures" sounds like a great idea for U.S. shippers – many of whom have offices throughout the world – but turning those into a "UPU integrated and global postal network solution" sounds very discriminatory and anti-competitive, from our point of view. We would be glad to provide experts in customs and security to work on this issue, either directly to the UPU on behalf of the global express carriers, or through the Consultative Committee. We could also have such experts involved in working on the U.S. positions.

Additionally, under this resolution, we would expect the U.S. to advocate that that "simplified export and important processes" developed in this context benefit all delivery services equally, since we are all chasing the same SME exporters and importers. Any "integrated and global network solution" should not be developed merely for public postal operators, but should be available to any delivery service that U.S. exporters and importers (the intended beneficiaries of such solutions) want to use.

C 12.Postal economics

We are fully supportive of the idea of sharing the postal economics research work with relevant stakeholders, and are assuming that could be accomplished through the Consultative Committee. This kind of work funded by the UPU should be open to all.

C 13.Conference on postal regulation

I would just like to note that we have attended these conferences on postal regulation in the past and found them to be useful. However, if they are left to the restricted unions to run, the private sector actors might be excluded – the unions did exclude everyone except DOs from their meetings in the run-up to Doha. Postal regulation is an issue of critical importance to us, both as the beneficiary of appropriate regulation (if the designated operator might otherwise take advantage of market distortions) and as the possible subject of anti-competitive regulation (e.g., USO funds, extensions of monopolies).

C14. Restricted unions – Further strengthening of cooperation between the UPU and restricted unions

We would be interested in knowing what the U.S. vision of its role in these restricted union meetings will be – see comment above. 

C 16.Support costs for user-funded subsidiary body activities

What is the U.S. position on the idea of extra-budgetary groups not needing to repay a certain amount of their expenses? What principles would the U.S. be putting forward on "fair reimbursement"? One user-funded subsidiary is the EMS Cooperative, an entity specifically created to compete with FedEx and other global integrators. What is the U.S. position on the EMS Cooperative receiving the benefit from such additional funding or support from the UPU?

C 18.Structure and management of the work of the Council of Administration

We would ask that the U.S. continue to support the involvement of the Consultative Committee in the reform of the Union activities. We would also like to know what the U.S. government sees as important reform goals for this group.

C 26.Management of the work of the Union – Further reform of the UPU

We would like to know what specifically the U.S. planning is to do in the context of this study "to promote and encourage a clear distinction between governmental and operational responsibilities" and bring about the long overdue structural reforms of the UPU?

C 29.Continuation of UPU activities in the area of the universal postal service

We would like to know what the U.S. position is on universal postal service, especially as that term may be defined by the UPU. We see that concept (the UPU defining it) as an intrusion on national sovereignty and something that the institution should be allowed to undertake with great caution. It is our view that the UPU’s UPS should not be expanded, because that imposes extra costs on post offices (which they then may seek to have their competitors reimburse them for). This is especially important if post offices seek to expand their UPS into areas where there are already competitive services. If the UPU supports a broadened mandatory UPS, we would ask that the U.S. oppose that. Inadequate cross-border services might be better address by the Quality of Service efforts.

C 31.Development of e-commerce

We would ask that the U.S. act to ensure that activities of the POC carried out pursuant to this resolution (such as the "elimination of barriers to growth of e-commerce") will benefit all shippers, not only customers of postal operators. As this resolution appears to authorize activities by the POC only (and not the CA), we would urge the U.S. to ensure that the results of this work do not have the force of international law, especially if they create a competitive gap between private and public operators. We particularly see customs and security as matter of national law and would expect that the U.S. fight anything that would seek to water down or control U.S. laws, even for the laudable goal of encouraging international e-commerce.We strongly support the involvement of the Consultative Committee in the POC’s e-commerce work. 

C32. Exploiting the postal opportunities offered by the growth of e-commerce through the remodelling and modernization of the UPU lightweight package services (small packets, lightweight parcels and EMS items)

We would urge the U.S. to insist on transparency with regard to the efforts of the POC in these matters, as it runs the risk of being a UPU program which uses the power of the intergovernmental organization for competitive distortion for one group of market participants. For example, the statement that "the UPU network is vulnerable to external threats" regarding new customs and security regulations – that is true for all operators. Again, as in the las comment, thispossibly represents an attempt by the UPU to intrude upon the U.S. control of its borders. We would expect the U.S. to oppose anti-competitive efforts to create advantages for postal operators collectively in the area of lightweight packages or to suppress competition among postal operators in a manner inconsistent with antitrust principles.

C 33.Promoting cross-border e-commerce

See the comments above. Customs processes and security provisions should not become a competitive advantage which is bestowed by a government or an intergovernmental organization on one class of international service providers to the detriment of competing service providers. We would ask that the matters delegated to the IB be shared transparently with all stakeholders.

C 36.Future work on inward land rates and other remunerations for parcel-post items

We would seek to know what the U.S. intends to do during the next cycle to ensure that inward land rates remain "cost based and affordable" without cross subsidization, "fair and equitable" in accordance with international principles of competition law. What is the U.S. position on cost coverage? We believe that this is a good opportunity for the U.S. to press the industrialized countries to operate in a transparent and procompetitive manner in the supervision of the international parcel services markets. At the same time, we would ask that the U.S. discourage – and at a minimum not join – any POC activities that "fix prices" or suppress competition in manner forbidden to private companies.

C37. Future work on letter post development and supplementary remuneration associated with quality performances, standards and targets

On the instruction to the POC "to place particular emphasis on the development and implementation of outbound delivery and inbound return logistics services in support of the major market opportunity in the e-commerce segment," see comment under C 32, above. If this is merely a program to allow the members to develop a new product for their commercial network, we have no objection, provided that new international laws and regulations are not created to favor such product over that offered by a private sector actor.

C 45.Future organization of UPU standardization activities

Industry standards are one of the engines driving the modern economy. Standard setting can increase innovation, efficiency, and consumer choice. At the same time, standard setting can be anticompetitive. We would ask, therefore, that the U.S. monitor the anticompetitive potential of UPU standard setting and do whatever it can to ensure UPU standard setting is free of anticompetitive objectives or effects.

C 53.Development of supply chain standards for the postal sector

We would ask what the U.S. position is on "minimum security standards and procedures" under this resolution.

C 55.Work relating to customs matters

We support the need "to further improve compliance with customs declarations" and the UPU’s determination to work closely with the World Customs Organization. We do not, however, accept that the UPU should promote special customs procedures available only to post offices. See comment on C 49, above. We also oppose efforts to promote the Revised Kyoto Convention Annex J2 on postal matters, in so far that that annex implies that customs procedures should apply differently to different international carriers.

C56. See also comment on C 49, above.

What is the position of the U.S. on the concept of "allowing compliance with international regulations while preserving features critical to mail operations? That sounds like a lowering of the bar on safety and security for mail only.

C 57.Future work on the terminal dues system for 2018–2021

What are the goals of the U.S. relating to the terminal dues system for the next cycle? Will the U.S. continue to press for cost-based, non-discriminatory access pricing of market-dominant postal services? This remains an issue of concern for us, since "packets" are part of the letter-mail system. Similarly, pricing activities of the UPU should not restrain competition either between private operators and post offices or among post offices. For private competitors like FedEx, U.S. and EU antitrust laws place sharp limits on our ability to coordinate pricing policies with competitors. See comment on C 36, above. We expect the U.S. to do everything it can to ensure that the same principles apply to price coordination by post offices.

C 60.EMS Cooperative

See comment on C 16, above.

C 66.Work on sustainable development

What is the U.S. position going forward on the "principles of the 1992 Rio Declaration," within the UPU? Since the general position of the U.S. is not to support these, will there be any public clarification of the U.S. position?

C 68.Study of the use and definitions of terms and expressions in the Acts of the Union

What is the U.S. position on expansions or changes in the definitions?

C 77. Classification of countries and territories for terminal dues and Quality of Service Fund (QSF) purposes

Debates about country classification should no longer be used as an excuse for further postponing the development of cost-based, non-discriminatory for terminal dues, at least on postal items exchanged among the industrialized countries and other rapidly developing countries. We believe the U.S. should take the lead in proposing solutions to the classification issues that will break this logjam.

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