The Universal Postal Union’s member nations agreed Sept. 25 to improve its payment system for the international exchange of Letter Post Packets.
The international organization, also known as the UPU, has established a system that determines the amount a country will be paid for delivering international Letter Post products that originate in another country. This system is known as “terminal dues.”
This week in Geneva, UPU members held a special meeting — known as an Extraordinary Congress — to discuss the current terminal dues system as it applies to Letter Post small packets that contain goods.
The meeting provided an opportunity for UPU members to collaborate and develop solutions to move away from terminal dues for small packets and to end the distortionary effects associated with excessively low rates established under the terminal dues system, as compared to domestic postage rates.
The Postal Service has been working with the Trump administration, the U.S. State Department, the Postal Regulatory Commission and others to instead allow countries to declare their own rates for delivering international small packets, in order to provide a more balanced and fair remuneration system for small packets containing goods.
A compromise agreement was reached at the Extraordinary Congress that will essentially eliminate the economic distortions that result from the current payment system for the international exchange of small packets.
The agreement will also enable the United States to remain in the UPU, with the Postal Service as its designated operator.
In response to this agreement, Postmaster General Megan J. Brennan issued the following statement:
The Postal Service would like to thank President Trump for his leadership in helping us to negotiate the resolution of an intractable problem with the payment system for the international exchange of small packets that has persisted over many years, and that has been extremely difficult to resolve. We are very pleased that the member countries of the Universal Postal Union have reached an agreement that accommodates the concerns of the United States and other countries with that payment system.
The United States and other countries’ concerns have been addressed by allowing the Postal Service to self-declare its rates beginning in July 2020, while operators from other countries will transition to self-declared rates at phased levels over the next six years. The proposal adopted by the Universal Postal Union is aimed at eliminating economic distortions for the distribution of goods, by establishing parity with comparable domestic services for inbound packet volumes.
The outcome of the UPU negotiations will also enable the Postal Service to support infrastructure development abroad that builds capacity for advance electronic customs data transmission and improvements in postal security.
The safety, sanctity and security of the mail are of paramount importance to the Postal Service, so we appreciate that the agreement reached today includes concrete steps to ensure that the world’s posts will be better positioned to provide data from their customers that will help to reduce the use of the international mail system to transport dangerous contraband and counterfeit goods into the United States.
We are also grateful for the laser focus and concerted efforts of the Trump administration team, led by Dr. Peter Navarro, on these important issues. Through our collective efforts, and the spirit of cooperation and compromise that was demonstrated by the International Bureau and the participating nations at the Extraordinary Congress, we believe that the global network for the international transportation and delivery of mail will work more effectively, and in a fashion which is fundamentally more fair to all participants in the system.