Addressing the potential US withdrawal from the UPU
September 1, 2019
At Access Worldwide, we’d like to keep you updated on events that have been taking place which could have an impact on the movement of cross-border mail and parcels. These events include the possible US withdrawal from the Universal Postal Union (UPU), and the preparatory actions we are taking.
The Trump administration has been engaged in an ongoing effort to address an economic distortion affecting e-commerce shipments into the US from China. Decades ago, the UPU established the rate structure that the US Postal Service currently abides by. That system provides Chinese shippers with unacceptably low rates for packages shipped into the USA. In an attempt to resolve this rate disparity, President Trump announced on October 17, 2018 that the United States will withdraw from the Universal Postal Union effective October 17, 2019.
In July 2019 the member nations of the UPU voted to convene an extraordinary congress to vote on various proposals that have been put forward. If an agreement can be reached which meets the requirements of the US administration, it is possible that the US will remain in the UPU. It is still too early to know what the outcome of the UPU meetings will be. However, we want to assure all our customers that, no matter the outcome, Access Worldwide will continue to provide you with the same reliable global shipping and mailing solutions that you’ve come to expect of us.
A Brief Overview
- The Universal Postal Union (UPU) uses a system called Terminal Dues to determine the rate countries pay each other for mail delivery, taking into account each country’s economic situation. Naturally, this results in the US and other developed member countries paying more in Terminal Dues than developing countries.
- On August 23, 2018, a Presidential Memorandum issued by the White House sought to reform the Terminal Dues system in order to promote fair and unbiased rates that would create even competition between UPU member states. It also addressed a second issue concerning the lack of electronic customs data from foreign postal operators.
- In September 2018, an extraordinary session of the UPU Congress took place, but the US officials’ efforts to overhaul the Terminal Dues system and customs data concerns were unsuccessful. Soon after, in October 2018, President Trump announced plans for withdrawal from the UPU by October 2019.
As it stands, there are three proposals before the UPU. A Special Congress will be held on September 24-25 during which member countries will vote on the following proposals:
Option A maintains the current situation – this involves implementing changes to the Terminal Dues system that were agreed upon at the 2016 Istanbul Congress.
Option B allows countries to charge a self-declared rate on inbound packages, while not exceeding domestic retail rates. This is the preferred option of the US Government, ideally implemented by January 2020.
Option C is a compromise that would see countries charge a self-declared rate, while mitigating its impact by introducing a phase-in period, and ensuring rates do not exceed 70% of domestic tariffs.
No matter the outcome of the vote, the US might still proceed with withdrawal from the UPU. It is expected that the member countries will continue to negotiate in hopes of reaching a unifying agreement. Regardless of the outcome, Access Worldwide will continue to work to ensure service quality in the event of the US withdrawal.
How will this affect you?
We know that unanswered questions can leave customers uneasy. With this in mind, we would like to ask you to count on us as we continue to meet your expectations of service. Since our founding over 20 years ago, Access Worldwide has built strong relationships with over 60 different private delivery partners and postal administrations around the world. With our expertise and leverage on your side, rest assured that all of your shipping needs will be met.
Should you like more information, please refer to this UPU Report, which summarizes the potential impact of the proposed US withdrawal. For more information on the specific proposals being considered by the UPU, we encourage you to reach out to us with any further questions you might have. Our team is well-versed on the situation and available to help you out in whatever way you need.
We thank you for your continued trust, and looking forward to meeting all of your global shipping needs!