The
following is from a paper presented by Michael Regan, International Affairs,
U.S. Postal Service before the Triangle Mail
and Express Conference held in Rome, Italy on May 15, 2003.
The views expressed are the author's and do not necessarily reflect the official
views of either the U.S. Postal Service or the Association for Postal Commerce.
What
kind of regulatory framework should apply to delivery services at a global level
and where should the authority for developing this framework reside?
Delivery operators, public and private, have been probing these questions
in a variety of venues and treaty arrangements, including:
the Universal Postal Union, the World Trade Organization, the World
Customs Organization, the European Union, and various Free Trade Agreements such
as the North American Free Trade Agreement, or NAFTA. In this paper, I focus my
remarks on the Universal Postal Union (UPU).
To
frame developments in the UPU, I would like to suggest two or three visions
competing for attention:
- One
view projects the UPU as a kind of global regulator promoting the opening up of
national and international markets for delivery services to all operators,
public and private, on equal terms;
- Another
view projects the UPU as continuing its role as the forum for intergovernmental
cooperation in assuring a basic set of universal services at affordable prices
on a global level;
- A
third view, put forward by Paul Jackson at the October 2002 UPU Strategy
Conference in Geneva, calls for the UPU to abandon its status as a United
Nations Specialized Agency and as an intergovernmental organization and to
become instead an all operators association like IATA.
The
first two views might be summarized as the traditional UPU role in supporting a
single postal territory worldwide vs. a new role in supporting a global market
in delivery services.
The
first two views are not necessarily contradictory, at least allowing for
developments over time. Even this third view could be accommodated in a UPU
further separating governmental and operational roles.
A
key to understanding developments in the UPU is to recognize that its role with
respect to global delivery services is largely a function of two factors: first,
the role of governments with respect to delivery services at the national level;
and second, the limitations that national sovereignty imposes on exercising
authority at a global level.
At
the national level:
- Most
UPU member countries mandate some form of universal service and none of them
leaves the provision of universal service exclusively to the marketplace;
- In
most UPU member countries, the operator responsible for universal service is
government owned;
- For
many UPU member countries, the governments are dealing with issues of
competition between government owned postal operators and private operators
offering services in a wide and more profitable market;
- In Europe, we are seeing the emergence of a framework in which the boundary between
universal service providers and commercial operators is beginning to erode and
in which governments attempt to maintain universal service commitments through
licensing and eventually, perhaps between 2006 and 2009, without the support of
a reserved area.
The
UPU itself is in a state of transition as it seeks to assimilate these
developments occurring at the national level and at the European regional level.
The UPU is likely to continue, probably for the next ten years or so, to
have a role to assure interoperability among nationally based universal service
providers and to promote quality and efficiency as long as this remains the
dominant model at the national level, although developments in Europe will
continue to influence changes in this model.
The
governmental policy role of the UPU is also changing and it is becoming a forum
to:
- first,
address private sector concerns ranging from service quality and affordability
to market access and trade facilitation;
- second,
to educate participants on World Trade Organization and World Customs
Organization developments and their implications for delivery services;
- third,
to liaise with the World Customs Organization on customs clearance issues;
- fourth,
to track and benchmark regulatory practices at the national level;
- fifth,
to promote postal reform and modernization, particularly among developing
countries;
- sixth,
to continue efforts toward a common, cost-based
terminal does system that takes account of developing country needs and
network access issues; and
- seventh,
to continue to help the UPU adapt to changing conditions among members at the
national level, including distinguishing more clearly between governmental and
operational responsibilities.
The
government of the United States, along with European governments, has played a
leading role in promoting reform in the UPU and in opening up the UPU to wider
participation by the private sector. The
1999 Beijing Congress of the UPU called for the formation of a High Level Group
(HLG) to pursue this matter. After
two years of debate, the HLG recommended the creation of a Consultative
Committee to provide a forum for private sector involvement in the UPU and also
recommended that private sector members of the Consultative Committee have
observer status in the meetings of two of the principal bodies of the UPU, the
Council of Administration, responsible for the matters of government policy, and
the Postal Operations Council, responsible for the operational aspects of
implementing services mandated under the UPU Acts.
While
the UPU Council of Administration approved the implementation of these
recommendations on an interim basis, it will be up to the next Congress of the
UPU in Burcharest in 2004 to formally adopt these recommendations.
Private
sector organizations representing both customers and private operators will have
a significant opportunity, through the new Consultative Committee, to bring
their interests and concerns, from service quality and affordability to trade
facilitation, to the attention of government representatives in the UPU.
While
the U.S. and Europe will support and encourage dialogue with the private sector,
the U.S. and European views on some issues are likely to diverge at least in the
near term.
In
Europe, governments have taken major steps to separate themselves from operating
postal services and to give postal operators a commercial status and ability to
compete in the market place.
In
the United States, the USPS has not been given commercial status and is very
limited in terms of how its services may compete in the market.
While a Presidential Commission is due to make recommendations by the end
of July on the future status of the USPS, substantial change would likely
require further action by the US Congress.
As
a universal service provider under an obligation to operate on a break-even
basis, the USPS supports a regulatory framework based upon clear distinctions
between universal services and services operated on a commercial basis.
For this reason, the USPS believes it is essential for the UPU to
maintain a distinction between the activities of its members based upon
reciprocal obligations under the UPU Acts and the activities of the UPU members
based upon commercial objectives, such as the activities of Extra-Territorial
Offices of Exchange, or ETOEs.
ETOES
are an issue in the UPU. The issue, from a USPS perspective, is not whether or
not they reflect a natural evolution of the market or serve a useful purpose in
meeting customs needs. Rather the
issue is whether they should operate within the framework of UPU rules
supporting universal service commitments, such as rules on terminal dues, postal
documentation, and postal customs clearance, or whether they should stand on
their own like any other commercial service.
In
closing, I believe we can count upon private sector participants in the UPU to
inject new issues and concerns and to press for support from government
representatives for efforts to improve service quality, control costs,
strengthen service in developing countries, to take account of commercial
developments as well as universal service commitments, and to move toward
promoting the interests of all operators in the global market for delivery
services.
Developments
with respect to the government role at the national and regional levels will
influence the pace of developments at the UPU level. It is unlikely, however, that the UPU or any other
institution will, in the near future, play a role at the global level that the
European Commission and European Union authorities play at the European regional
level with respect to regulating cross-border services or harmonizing national
regulations. The national sovereignty principle is too high a hurdle and will
inhibit the exercise of that kind of authority. Never-the-less, the UPU will
serve as a platform for promoting measured liberalization and reducing barriers
to trade-in-services. Developments in Europe could have a positive influence on
the UPU.