Competition in International Postal Markets: Should the Universal Postal Union's Anti-Remail Provisions Be Repealed?

Abstract

The Universal Postal Union (UPU) is the governing body that provides the framework for agreements in international postal markets. The UPU Congress in 1999 and 2004 will attempt to reform some key international agreements related to remail and terminal dues. The private postal carriers argue that UPU's anti-remail provisions are anti-competitive and deny consumers the benefit of higher quality services. With an expanding private sector, there is increasing pressure on UPU to repeal some of its anti-remail Articles. These changes can have a significant impact on private and public postal carriers, and businesses and individual consumers of mail services. This paper provides an analysis of the issues related to remail and terminal dues, and demonstrates that in many instances remail opportunities arise primarily due to distortions in the global terminal dues structure. We argue that, at this juncture, repealing some of the anti-remail Articles could potentially have a significant impact on the U.S. Postal Service's costs and revenues in the domestic market and undermine its ability to provide universal service. international trade