“If the US were to withdraw from the UPU, it would lose access to global processing and coding systems that make international mail possible, and it would have to negotiate bilateral postal agreements with every individual country.” - Universal Postal Union (UPU) Director General Bishar Hussein.
The UPU is the UN agency that oversees and coordinates international postal exchange among its 192 member nations and their territories. Beyond payments for international mail, the UPU members set documentation requirements, rules, and standards for mail classes and labels, what’s allowed in the mail internationally, and many other items.
In October, 2018, the US delivered a letter to the UPU notifying it of the US intention to withdraw in a year unless some changes were made in the way countries paid each other for incoming international mail. While what countries pay each other for transport or final delivery of mail are not postage rates, they do effect postage rates. If the exchange payments are high, postage will be higher.
The potential withdrawal of the US from the UPU creates two separate issues for senders and recipients of international mail: (1) international payment agreements between countries and its effect on postal rates and (2) how mail can go to and from the US.
Under each of the possible resolutions to the situation between the US and the UPU, international postage rates will increase, possibly by a substantial amount. Clearly, if a country pays more to another country for the delivery of mail there, the postage rate paid by mailers in that country will most likely be higher. Since the US is seeking higher remuneration for handling mail coming from other countries and other countries will likely want commensurate increases in compensation for their handling of incoming mail, a worldwide increase in international postage is very likely. Each country will make its own decision on its postage rates, but increased costs lead to increased prices.
Resolution within the UPU, requiring a vote of the member countries, would be based on a proposal that has not yet been fully formulated. The way in which those rates are determined would need to be applicable to all 192 countries that are UPU members. One option for a UPU proposal would base compensation on a proportion of domestic postage for a mail product equivalent to the incoming international item. The other option for possible resolutions is based on modification of the current terminal dues system. This second option, based on the current system, does not meet the US requirements, which would only be clearly satisfied by a change to UPU rules allowing each country to set their own terminal dues rates.
Canada, the US, and some Latin American countries support the first proposal. Many European countries and China support the second option. Many countries appear to be taking a wait-and see attitude. The final proposal submitted to the UPU member countries will not be completed until late March, and many countries will likely wait until the details in potential proposals become clearer, weighing in on items as they are raised in line with their own interests. Currently, it appears support is about evenly split between the two possible proposals.
The comment and voting periods for any proposal are each 45 days. (The US-imposed deadline is mid-October.) The number of countries needed to pass a proposal depends on the number of those eligible to vote and the number who do vote, out of the total membership. (In general, the US would need to secure two-thirds of the votes cast in an election in which at least one-half the membership with the right to vote participated.)
If resolution within the UPU is not possible or does not meet the deadline set by the US government, the President says the United States will independently set self-declared rates for mail from other countries. The USPS Board of Governors will take up the inbound rates at its April meeting, according to Postmaster General Megan Brennan. Self-declared rates are rates for incoming international mail set by the recipient country. While it remains unclear what the exact basis for these rates would be, they are likely to be based on some proportion of the postage for existing mail categories defined by USPS. This will likely be met with increases imposed by other countries.
Review and approval of any new USPS postage rates for international products will need approval by the Postal Regulatory Commission (PRC). This process has in some past cases been lengthy, with court cases following lengthy comment and response periods after a PRC decision. In the jigsaw of pieces in the modification of the international country-to-country payment system, it adds another point of uncertainty and potential disruption for international mailers using the USPS.
If the US does withdraw from the UPU, it could lose use of, and access to, the international postal network. As Director General Hussein pointed out, this may require negotiating separate agreements with each of the other 191 members of the UPU — between whenever they start these negotiations and October of this year. Such agreements would sanction the exchange of mail between the US and the other country signing the agreement, but would not grant the US access to the full international postal network. Negotiating a large number of complex agreements within what might be less than six months would be a difficult task under any circumstances.
Additionally, the US could reach some agreement with the UPU to allow use of the UPU network—the forms, labels, standards and processes — by the USPS in exchange for some fee, while remaining outside the remuneration system. Such a fee would likely be substantial, but would allow for the continued exchange of international mail with the USPS if the US comes to agreements on payments for mail transit and delivery with other countries.
International mailers and mail recipients need to prepare for higher international postage rates worldwide. Since international mail through the USPS may be disrupted, mailers also need to look at alternative delivery options, such as remail and direct entry.
Merry Law, President of