American e-commerce business has been put at a disadvantage for subsidizing shippers from developing countries like China, by the Universal Postal Union, a postal treaty where witnesses as well as legislators state, has created a rough playing field for international e-commerce, which is up for renegotiation in 2016.
A hearing was held on June 16th, by the Government Operations subcommittee of the House Oversight Committee that the committee Chairman, Mark Meadows considered as the start of a push for U.S reform strategy. Reported earlier by Fortune, the Universal Postal Union is considered a treaty organization which tends to set international postal standards, comprises of the terminal dues agreements between post-office.
Congressman Meadows, in his opening statements, branded the terminal dues system as `trade distortion’ that had left thousands of the small businesses of Americans at a disadvantage. This was due to the system favouring shippers from countries that included China, which is considered as `developing’ country.Meadows suggested a question for the committee on how the situation could be improved wherein some were offered by the witnesses, which represented the Amazon, FedEx, State Department and USPS.
Negotiating Rights Taken from U.S. Postal Services
SinceCongress took the negotiating rights away from the U.S. Postal Service and gave the lead to the State Department in 2006, U.S reform efforts have made little progress. Presently the State lead negotiator at the UPU, Robert Faucher, defended the progress that was made while at the same time clarified that the UPU is a very slow moving organization and dependent on an extensive one-country, one-vote Congress, which is held once in every four years.
Head of regulatory affairs for FedEx, Nancy Sparks, claimed that lethargy seems to be the source of the UPU’s deteriorating discrepancies. She stated that the tradition of the UPU is that the haves tend to pay the have-nots and what brings this problem up is that the have-nots suddenly have a lot.
Sparks further pointed that time seems to be short for U.S. game plan ahead of next year’s UPU Congress where the rules could be amended. `September 2016, in UPU time, is a heartbeat away’
Specific Goal – 2016 UPU Congress – Establish UPU Task Force
Faucher refrained from offering a timetable for meaningful terminal dues reform when he was compelledby representative Meadows. He stated that the `State Department’s most specific goal at the 2016 UPU Congress would be to establish a UPU task force to explore fundamental reforms’.
Proposals similar to these had been put forward by the U.S. at earlier congresses though were not successful.Essential approaches were also offered by Paul Misener, Amazon representative who called for the U.S. in making postal rates part of larger diplomatic negotiations with China. He further added that the UPU seems to be an imbalance which makes no sense to Amazon and that they are on the look-out for the whole ecosystem.
Insignificance of the problem could make it difficult to meet that type of political stress and most of the committee members commented that before the hearing they were ignorant of the facts. However, as per Congressman Meadows, this seemed to be just the beginning who commented that this would not be the last hearing, since they were going to look for real results.