Compromise Plan Keeps Universal Postal Union Intact; Approved By Unanimous Acclamation
GENEVA, SWITZERLAND — September 25, 2019 — The Universal Postal Congress, meeting in extraordinary session, hammered out a compromise plan that allows for self-declared rates for small commercial packets and saves the unified international mail system.
The compromise was approved by unanimous acclamation.
In a passionate address to the Congress, UPU Secretary General Bishar Hussein announced a compromise that was negotiated by proponents of the various plans. The new compromise that came out of those talks Hussein termed the “Victory Option.”
It will be a “victory for all those citizens” he told the Congress and “we have it very close at hand if this assembly agrees with what we have come up with.”
“I call on all of you in the name of this historical Union to find the courage to choose the right path not just for yourselves, but for the entire industry,” Hussein told the Congress.
The proposal “Option V” garnered widespread support, including from developing countries opposed to self-declared rates. The United States expressed its support, as did other developed countries who pushed for full self-declared rates as expressed in “Option B” which was rejected yesterday.
The decision, which took place during the second day of the Geneva meeting, will see the UPU accelerate rate increases to the system used to remunerate the delivery of inbound international bulky letters and small packets, phasing in self-declared rates starting as soon as 2020.
Under the agreed solution, member countries that meet certain requirements – including inbound letter-post volumes in excess of 75,000 metric tons based on 2018 data – would be able to opt-in to self-declare their rates starting 1 July 2020.
The decision also includes thresholds to protect low-volume, developing countries from the impact of the swift reform.
Hussein said that if the USA proposal known as “Option B” was adopted yesterday, half the UPU members would have left disappointed and upset. He said numerous parties spent the night crafting an acceptable compromise.
The stakes were great: the Universal Postal Union, the oldest multi-lateral institution in the world celebrating its 145th year of existence, would have been broken up with the withdrawl of the United States.
One year ago, the United States put the UPU on notice: change the terminal dues remuneration system or it would leave the union.
“We got immediate self-declared rates,” said Peter Navarro, Director of the Office of Trade and Manufacturing Policy in a press conference following adjournment of the Congress today.
Navarro said self-declared rates for inbound packets will begin in June 2020.
Navarro said the U.S. “had achieved the President’s goal”, noting that the terminal dues issue goes back to President Ronald Reagan and up to now has not been rectified.
Navarro said that intense negotiations were conducted with over 30 countries spanning two days. “The beauty of that process was it allowed us to understand the individual issues at stake. Two of them were the transition speed and an escalator clause which allows countries like the US to raise their rates. That process allowed us as a group of nations to try and come up with a proposal that was not a compromise but a synthesis,” he said.
Tuesday night meetings went well into the night, Navarro said, with UPU Director General acting as intermediary between the United States and China and other countries. Those meetings ended around 3am local time and resumed at 6am local time.
“It was quite an extraordinary experience,” Navarro said.
One key to the success of the negotiations was the South Africa Amendment, in which developing countries were provided exemptions based on tonnage, Navarro said. He also said providing for UPU charges so as to upgrade electronic data among member nations was necessary.
According to sources, the United States will pay CHF40 million to the UPU on a one-time basis, with CHF16 million for postal security known Advanced Electronic Data (AED) products and CHF24 million for long-term liabilities. That translates to $40.30 million in U.S. dollars.
Navarro said, “It is a small amount to pay relative to the amount of money we are saving.”
Tuesday, September 24 Report:
UPU REJECTS USA DEMAND FOR SELF DECLARED RATES
Peter Navarro Praises UPU Director Hussein In Remarks Before UPU Extraordinary Congress
GENEVA, Switzerland — September 24, 2019 — United States representative Peter Navarro told the UPU Congress meeting here that the U.S. strongly prefers Option B be approved by the congress, but that the “multispeed option” would also be acceptable.
The UPU Congress, however, voted down Option B on Tuesday leaving two options remaining for vote on Wednesday.
UPDATE: UPU Director General “Very Optimistic” Solution Will Be Found
In line with UPU Congress rules of procedure, countries first reviewed the proposal furthest from the status quo, known as “Option B”, which would allow countries to self-declare their rates from 2020. They rejected the proposal in a vote by secret ballot, with 78 countries voting against the proposal, 57 voting in favor and 9 abstaining. More than 150 countries were represented at the opening day’s plenary session.
The issue before the vote is what amendments, if any, will be placed on the multispeed option. If none and it is approved, the US will remain in the UPU, an outcome some onlookers believe likely.
But others are more pessimistic and believe the US will even fail in having the third option approved without amendment.
“America’s strong preference is for the measure known as Option B. With this option, all members of the UPU would be allowed to immediately self-declare rates. While this option might cause some very short-term disruptions, it is the clearest, cleanest, fairest and quickest path to a reform that is long overdue. We strongly urge its passage today,” Navarro told the UPU Extraordinary Congress.
“The second acceptable path is the multispeed option. It would allow the United States to immediately self-declare rates while other countries would achieve that goal over a five-year period,” he said. “The most important thing that I can tell you about this option is that it already represents a very significant compromise of the United States.”
The Extraordinary Congress will meet and vote on one of three options for terminal dues: 1) To accelerate rate increases already approved by the UPU; 2) To allow member countries to self-declare postal rates; and, 3) A convergence option that also adopts self-declared rates as its basis, but with elements aimed at mitigating undue price impacts.
MAIL reported two weeks ago “the third option could be enough, depending on the details”. Navarro has now made this the official U.S. position.
The Extraordinary Congress of the Universal Postal Union is being held September 24-25 in Geneva. One of the three options will be approved at this gathering.
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Remarks of Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy, before the Universal Postal Union Third Extraordinary Congress:
September 24, 2019
We are here today because of the leadership of two individuals: My boss President Donald J. Trump and Director General, Ambassador Bishar Hussein.
I have no doubt that President Trump will go down as one of the greatest presidents in American history, and one of the many reasons is that he is a common sense president. When he found out the United States is being forced to heavily subsidize the import of small parcels in a way that costs our Postal Service hundreds of millions of dollars a year and costs our economy tens of thousands of jobs, he called me into the Oval Office and simply said “fix it.”
So almost a year ago, the United States filed its intention to leave the Universal Postal Union and I have spent the better part of the last eleven months working with a top-level team preparing for a possible seamless exit.
The only reason we are here today is because of the leadership of Ambassador Hussein. Over the past year, through countless meetings — including a visit to the White House — we have relentlessly sought to fix a terminal dues system that everyone in this room knows is broken.
Our success to date is illustrated by the very fact that we are gathered here together at what is only the third Extraordinary Congress in the UPU’s long history.
The fact we are here tells me that a majority of the countries assembled do indeed want to keep the United States in the UPU. And for that, I thank each and every country that supported the calling of this Congress.
What we must do now is focus like a laser beam on the mission before us; and there are only two acceptable outcomes.
America’s strong preference is for the measure known as Option B. With this option, all members of the UPU would be allowed to immediately self-declare rates. While this option might cause some very short-term disruptions, it is the clearest, cleanest, fairest and quickest path to a reform that is long overdue. We strongly urge its passage today.
The second acceptable path is the multispeed option. It would allow the United States to immediately self-declare rates while other countries would achieve that goal over a five-year period.
The most important thing that I can tell you about this option is that it already represents a very significant compromise of the United States.
I must underscore this point because in my short time here in Geneva, I have already had enough conversations to know that are at least a few among you that appear to think that our position can somehow be weakened. I can only say to you in all candor that this represents a severe miscalculation and a very poor reading of our intentions.
My final observation as we move to the urgent business at hand is this: While most of you assembled here today focus narrowly on postal issues, I am actively involved in the Trump administration with many of your countries in a much broader economic and strategic context.
For example, I have participated in trade negotiations with countries like Australia, Canada, Mexico, South Korea, Japan, and Great Britain.
I have assisted in strategic initiatives to promote the defense of allies and friends ranging from Bahrain, the Emirates, and Saudi Arabia to Bosnia, Morocco, and Slovakia.
And there are a host of issues now before us with the European Union ranging from the removal of trade barriers and reform of the World Trade Organization just down the street from us to the fair share financing of the NATO alliance.
From this broader perspective, I am personally asking you to support the United States position. I make this ask because in times like these, where no reasonable person could support the terminal dues system, this is what friends and allies do for each other.
In closing, let me offer this quotation from another contemporary world leader: “Remember the original intentions. Focus on the mission.”
The original intention of the Universal Postal Union was to create a mutually beneficial system that would distribute international mail around the world in a fair and equitable way. The mission here today is to retool this system for the brave new world of e-commerce. As we say in America: You know what to do.
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