March 20, 2012

FedEx would like to take this opportunity to support the document that Jim Campbell has presented to the Advisory Group, which he sent out in July and, beyond this, to urge the State Department to take steps now in the direction outlined in the document by submitting a pro-competitive comment in answer to the UPU’s survey regarding the Doha Postal Strategy (DPS). Generally, our view is that the Doha Congress provides an excellent opportunity for the U.S. government to urge the UPU to follow through with reforms initiated by the U.S. and other countries at the 1999 Beijing Congress. In particular, the UPU needs to do more in terms of separation of government and commercial functions and refocusing its efforts on the “basics” – the assurance of a global network providing basic international postal services.

Jim’s paper does not require extensive comment. The bottom line is that all five proposed amendments to the Universal Postal Convention set out in this paper are grounded in the pro-competition, non-discrimination mandates for U.S. international postal policy set forth in the PAEA. All five are laudable as proposals that should be included in the U.S. policy goals at the Doha Congress pursuant to these mandates.

FedEx would like to emphasize particularly the importance for international parcel and express services of the second proposal regarding parity of customs treatment. Congress specifically decreed the policy embodied in this proposal in Section 407 of the PAEA, instructing the Secretary of State to encourage other countries “to make available to the Postal Service and private companies a range of non-discriminatory custom procedures that will fully meet the needs of all types of American shippers” (emphasis added). We view the UPU as one of the most appropriate fora for this mission and urge the State Department to include a proposal like the one propounded by Jim as a vehicle for advancing this goal.

On the fourth proposal, relating to market access for competitive services, we strongly support Jim’s idea of ensuring that provisions of the Convention are fully consistent with the principles of liberal market access enshrined in the GATS. However, we have some concerns about whether the proposal as drafted is wholly compatible with the most-favored-nation principle of the GATS. We encourage further consideration in this respect.

The five proposals advanced by Jim are reasonable in content and limited in nature. In addition to supporting these proposals at the Doha Congress in 2012, the U.S. should give effect to the U.S. international postal policy mandated by PAEA by taking appropriate positions on policy-related items now being prepared for the agenda of the Doha Congress. Like other private operators and, indeed, private companies from other sectors (such as financial services), we have become increasingly concerned that the UPU may intend to champion the competitive products of designated operators over those of private companies. The Adrenale Report proposed, for example, a new “light weight parcel product” for designated operators. While we have no objection to postal operators developing new products which can be exchanged among themselves (in the context of the commercial side of a functionally-separated UPU), we would strongly object to an intergovernmental agency establishing or promoting special rights and privileges for such new products. The U.S. should be particularly on guard against supporting such initiatives, if they create privileges not available to competitors of the national operators.

In this respect, we believe that the U.S. response to the survey on the draft Doha Postal Strategy (DPS) provides an excellent opportunity to emphasize a pro-competitive, non-discriminatory approach to the UPU. As Jim points out at the end of his paper, while the process of separating government and commercial functions will be a complex one, U.S. policy should be aimed at getting started toward this goal. The U.S. comment on the DPS survey is good place to begin. To explain more specifically, the following appendix repeats key questions from this survey and offer some thoughts on the appropriate U.S. response.

Thank you for your consideration of our views.

Nancy S. Sparks
Managing Director, Regulatory Affairs
FedEx Express
1700 Pennsylvania Avenue, NW
Suite 950
Washington DC 20006