August 9, 2019 Meeting
Governor Duncan, Postmaster General Brennan, Governors Williams and Stroman, thank you for this opportunity. I will be addressing the Universal Postal Union situation.
For decades US businesses have faced a significant competitive disadvantage to China, and a handful of other countries, because of how the Universal Postal Union has structured the international mail system. Under the UPU, it costs 60 percent or less to send a small package from Beijing to the US than to send that same package within the US.
For nearly a year, the Trump Administration has been negotiating with the UPU to obtain “fair and nondiscriminatory rates.” The Administration has also given notice that we will withdraw from the organization on October 17 without such basic provisions.
The current system hurts US manufacturers, retailers and e-commerce companies. It means billions of dollars in lost US sales, lost jobs and lost tax revenue. It is also a kick in the teeth, especially to entrepreneurs. As Jayme Smaldone, founder of a consumer products company put it, “What kind of statement does it send when the US government allows a Chinese competitor to ship goods to my neighbor cheaper than I can?”
The Trump Administration’s UPU position is widely supported by many including the US Chamber of Commerce, National Association of Manufacturers, the Small Business & Entrepreneurial Council and even the editorial pages of The Washington Post and Bloomberg News.
While it would be ideal for the United States to reach an acceptable agreement and stay in the UPU, the Board should place a high priority on making sure the Postal Service has contingency plans to leave the UPU. The Postal Service should fully help the State Department negotiate and execute bilateral and multi-lateral agreements with other countries to ensure a smooth transition from the UPU.
Finally, let me add that I have spoken with numerous businesses, especially entrepreneurs, who have been severely impacted by the current UPU system. They are not seeking a handout or special treatment in the tax code. All that they want is for their competitors in China to pay the same to the Postal Service as they do. It is a reasonable and compelling request.
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