Competition in International Postal Markets: Should the Universal Postal Union's Anti-Remail Provisions Be Repealed?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 is attempting 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 the UPU to repeal some 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 the anti-ABA remail provisions could potentially have a significant impact on public postal operators' costs and revenues in the domestic market and undermine the universal service obligation.

Keywords: Postal markets, Terminal dues, Remail, Universal Postal Union, Universal Service Obligation, Cream-skimming, International Trade

JEL Classification: L50, L32, K20, K00, F10