Issue Briefs

The Universal Postal Union: Why Its Upcoming Extraordinary Congress Is A Big Deal

The Universal Postal Union: Why Its Upcoming Extraordinary Congress Is A Big Deal

September 25, 2019

By Paul Steidler

The Universal Postal Union sets the rates and regulatory requirements governing the shipment of packages internationally. The Lexington Institute’s Paul Steidler spoke with postal expert Jim Campbell about the organization’s September 24-26 Extraordinary Congress at which the U.S. is pushing for major reforms and threatening to leave the organization if these reforms are not enacted. Mr. Campbell has been an observer at Universal Postal Union meetings for decades. The U.S. delegation to the upcoming Extraordinary Congress will be led by Peter Navarro, Assistant to the President and Director of Trade and Manufacturing Policy.

In short, what is the Universal Postal Union and why is the U.S. threatening to leave it?

The Universal Postal Union (UPU) is an intergovernmental organization founded in 1875 to govern the exchange of mail between countries. Among other things, the UPU Convention defines fees, called terminal dues, that post offices pay each other for delivery of inbound documents and small packets (merchandise) mail weighing up to two kilograms (4.4 pounds).

In industrialized countries like the U.S. terminal dues for delivery of small packets are far below domestic postage rates for similar services. As the volume of international e-commerce imports has risen this situation has become increasingly unfair to American merchants. On October 17, 2018, the U.S. Secretary of State announced to the UPU that we would withdraw in one year unless the UPU amends its Convention to permit countries to “self-declare” rates for delivery of inbound small packets that eliminate this preference for foreign merchants.

If the U.S. withdraws from the UPU, will that be the end of international postal services?

No. The United States Postal Service (USPS) has been negotiating contracts with foreign posts to ensure the continuation of international postal services. While USPS has provided little public information, there is no reason to believe that USPS will be unable to make satisfactory alternative arrangements. Long before the threat of withdrawal loomed, USPS had concluded more than five hundred such international contracts.

The views and opinions expressed in this issue brief are those of the author.

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Paul Steidler is a Senior Fellow of the Lexington Institute, who researches, studies, and discusses energy and logistics issues. Steidler has 15 years’ experience in the research, analysis, and public commentary on energy generation and transmission issues. His work and views have appeared in such outlets as The New York Times, Associated Press, Reuters, Bloomberg, Investor’s Business Daily and numerous other news outlets. Mr. Steidler is a magna cum laude graduate from Villanova University with a B.A. in Political Science and Honors. He resides in Reston, Virginia.