Editing Universal Postal Union (section)

== Terminal dues ==

=== Origin ===

The 1874 treaty provided for the originating country to keep all of the postage revenue, without compensating the destination country for delivery. The idea was that each letter would generate a reply, so the postal flows would be in balance.<ref name="adams1990"/><ref name="morris2017"/> However, other classes of mail had imbalanced flows. In 1906, the [[Poste italiane|Italian postal service]] was delivering 325,000 periodicals mailed from other countries to Italy, while Italian publishers were mailing no periodicals to other countries.<ref name="morris2017"/> The system also encouraged countries to remail through another country, forcing the intermediate postal service to bear the costs of transport to the final destination.<ref name="campbell2019">{{cite conference |last=Campbell |first=James I Jr. |title=A Brief Overview of the History of the UPU Terminal Dues System |url=http://www.upu.int/uploads/tx_sbdownloader/paperABriefOverviewOfTheHistoryOfTheUpuTerminalDuesSystemEn_01.pdf |date=9 April 2019 |conference=UPU Remuneration Systems - New Frontiers for an Old World? |location=Bern, Switzerland |access-date=25 September 2019 |archive-date=25 September 2019 |archive-url=https://web.archive.org/web/20190925162453/http://www.upu.int/uploads/tx_sbdownloader/paperABriefOverviewOfTheHistoryOfTheUpuTerminalDuesSystemEn_01.pdf |url-status=dead }}</ref>

Remailing was banned in 1924, but the UPU took no action on imbalanced flows until 1969. The problem of imbalanced flows became acute after [[decolonization]], as dozens of former European colonies entered the UPU as independent states. The [[Developing country|developing countries]] received more mail than they sent, so they wanted to be paid for delivery.<ref name="morris2017">{{cite news |last1=Morris |first1=David Z. |title=The International Postal System Is Profoundly Broken -- And Nobody is Paying Attention |url=https://psmag.com/economics/the-international-postal-system-is-profoundly-brokenand-nobody-is-paying-attention |work=Pacific Standard |date=14 June 2017 |access-date=12 July 2018 |archive-date=6 February 2023 |archive-url=https://web.archive.org/web/20230206051645/https://psmag.com/economics/the-international-postal-system-is-profoundly-brokenand-nobody-is-paying-attention |url-status=live }}</ref>

In 1969, the UPU introduced a system of terminal dues. When two countries had imbalanced mail flows, the country that sent more mail would have to pay a fee to the country that received more mail. The amount was based on the difference in the weight of mail sent and received.<ref name="morris2017"/> Since the Executive Council had been unable to come up with a cost-based compensation scheme after five years of study, terminal dues were set arbitrarily at half a [[gold franc]] (0.163 [[Special drawing rights|SDR]]) per kilogram.<ref name="campbell2019"/> Also since 1969, it announces the annual best postal services on 9 October, the [[World Post Day]].<ref>{{Cite web |last=Keystone-SDA/dos |title=Swiss Post tops international ranking |url=https://www.swissinfo.ch/eng/business/swiss-post-tops-international-ranking/47012784 |access-date=1 February 2022 |website=SWI swissinfo.ch |date=8 October 2021 |language=en |archive-date=9 October 2024 |archive-url=https://web.archive.org/web/20241009055124/https://www.swissinfo.ch/eng/business/swiss-post-tops-international-ranking/47012784 |url-status=live }}</ref> 

=== Modifications ===

Once terminal dues had been established, they became a topic of discussion at every future Postal Union Congress. The 1974 Congress tripled the terminal dues to 1.5 gold francs, and the 1979 Congress tripled them again to 4.5 gold francs. The 1984 Congress increased terminal dues by another 45%.<ref name="campbell2019"/>

The system of terminal dues also created new winners and losers. Since the terminal dues were fixed, low-cost countries that were net recipients would turn a profit on delivering international mail. Developing countries were low-cost recipients, but so were developed countries like the United States and the United Kingdom.<ref name="morris2017"/> Since the dues were payable based on weight, periodicals would be assessed much higher terminal dues than letters.<ref name="adams1990"/>

The continuing fiscal imbalances required repeated changes to the system of terminal dues. In 1988 a per-item charge was included in terminal dues to drive up the cost of remailing, an old scourge that had returned.<ref name="campbell2019"/> To resolve the problem with periodicals, the UPU adopted a "threshold" system in 1991 that set separate letter and periodical rates for countries which receive at least 150 tonnes of mail annually.<ref name="adams1990">{{cite web |title=Why Does the US Deliver Foreign Mail When We Don't Get Any Money for the Stamps? |first=Cecil |last=Adams |url=http://www.straightdope.com/columns/read/903/why-does-the-u-s-deliver-foreign-mail-when-we-dont-get-any-money-for-the-stamps |publisher=The Straight Dope |date=12 December 1990 |access-date=16 December 2010 |archive-date=14 June 2011 |archive-url=https://web.archive.org/web/20110614230122/http://www.straightdope.com/columns/read/903/why-does-the-u-s-deliver-foreign-mail-when-we-dont-get-any-money-for-the-stamps |url-status=live }}</ref> The 1999 Postal Congress established "country-specific" terminal dues for industrialized countries, offering a lower rate to developing countries.<ref name="campbell2019"/>

=== Shifting balances and the United States ===

In 2010, the United States was a net sender because it was mailing goods to other countries. That year, the [[United States Postal Service]] made a $275 million surplus on international mail.<ref name="planetmoney2018">{{cite news |title=The Postal Illuminati |url=https://www.npr.org/templates/transcript/transcript.php?storyId=634732388 |work=Planet Money |agency=National Public Radio |issue=857 |date=1 August 2018 |access-date=25 September 2019 |archive-date=26 July 2019 |archive-url=https://web.archive.org/web/20190726002742/https://www.npr.org/templates/transcript/transcript.php?storyId=634732388 |url-status=live }}</ref> In addition, the UPU system was only available to state-run postal services. Low terminal dues gave the United States Postal Service an advantage over private postal services such as [[DHL]] and [[FedEx]]. To protect its profits on sending international mail, the United States voted with the developing countries to keep terminal dues low. They were opposed by the [[Deutsche Post|German Post]] and the [[Posten Norge|Norwegian Post]], which wanted to increase terminal dues.<ref name="morris2017"/>

However, the low terminal dues backfired on the United States due to shifts in mail flows. With the growth of [[e-commerce]], the United States began to import more goods through the mail. In 2015, the United States Postal Service made a net deficit on international mail for the first time. The deficits increased to $80 million in 2017.<ref name="planetmoney2018"/> The UPU established a new remuneration system in 2016,<ref>{{cite web |url=http://news.upu.int/no_cache/nd/member-countries-adopt-new-terminal-dues-system/ |title=Member countries adopt new terminal dues system |website=news.upu.int |access-date=29 September 2017 |archive-date=23 April 2017 |archive-url=https://web.archive.org/web/20170423063300/http://news.upu.int/no_cache/nd/member-countries-adopt-new-terminal-dues-system/ |url-status=dead }}</ref> a move that the [[United States Department of State]] said would "dramatically improv[e] USPS's cost coverage for the delivery of ... packets from China and other developing countries." However, the Chairman of the [[Postal Regulatory Commission]] disagreed.<ref name="gao2017"/>

=== 2019 Extraordinary Congress ===

With the outbreak of the [[China–United States trade war]] in 2018, the issue of terminal dues was pushed into the forefront. Americans complained that mailing a package from China to the United States cost less than mailing the same package within the United States. At the time, the UPU's [[Postal Development Indicator]] scale was used to classify countries into four groups from richest to poorest. The United States was a Group I country, while China was a Group III country, alongside countries like Mexico and Turkey that had similar [[GDP per capita]]. As a result, China paid lower terminal dues than the United States.<ref name="gao2017">{{cite web |author1=United States Government Accountability Office |title=GAO-18-112, Information on Changes and Alternatives to the Terminal Dues System |url=https://www.gao.gov/assets/690/687725.pdf |date=October 2017 |access-date=25 September 2019 |archive-url=https://web.archive.org/web/20190929033230/https://www.gao.gov/assets/690/687725.pdf |archive-date=29 September 2019 |url-status=dead }}</ref>{{rp|38}} The [[First presidency of Donald Trump|Presidency of Donald Trump]] complained that it was "being forced to heavily subsidize small parcels coming into our country."<ref>{{cite news |title=Pexit? US prepares to pull out of Universal Postal Union |url=https://www.dw.com/en/pexit-us-prepares-to-pull-out-of-universal-postal-union/a-50569818 |work=Deutsche Welle |date=24 September 2019 |access-date=25 September 2019 |archive-date=25 September 2019 |archive-url=https://web.archive.org/web/20190925040046/https://www.dw.com/en/pexit-us-prepares-to-pull-out-of-universal-postal-union/a-50569818 |url-status=live }}</ref> On 17 October 2018, the United States announced that it would withdraw from the UPU in one year and self-declare the rates it charged to other postal services.<ref name=ecb>{{cite news |url=https://www.ecommercebytes.com/2019/04/10/universal-postal-union-reviews-three-options-for-renumeration/ |title=Universal Postal Union Reviews Three Options for Remuneration |date=10 April 2019 |agency=E-Commerce Bytes |publisher=Steiner Associates, LLC |access-date=13 May 2019 |archive-date=13 May 2019 |archive-url=https://web.archive.org/web/20190513212358/https://www.ecommercebytes.com/2019/04/10/universal-postal-union-reviews-three-options-for-renumeration/ |url-status=live }}</ref>

The Universal Postal Union responded in May 2019 by calling, for only the third time in its history, an [[Postal Union Congress#Extraordinary Congresses|Extraordinary Congress]] for 24–26 September 2019.<ref name=upu3>{{cite news |title=Frequently Asked Questions: Third Extraordinary Congress |url=https://www.upu.int/en/News/2019/9/Frequently-Asked-Questions-Third-Extraordinary-Congress |work=Universal Postal Union |date=25 September 2019 |access-date=25 August 2022 |archive-date=21 May 2022 |archive-url=https://web.archive.org/web/20220521013949/https://www.upu.int/en/News/2019/9/Frequently-Asked-Questions-Third-Extraordinary-Congress |url-status=live }}</ref> The members voted down a proposal submitted by the United States and Canada,<ref>{{cite news |first=Jamey |last=Keaten |title=World Postal Union Rejects Trump's Favored Reform Plan |url=https://apnews.com/30d73d7eb31241709ea3aee64afb23bb |work=AP News |date=24 September 2019 |access-date=25 August 2022 |archive-date=17 August 2022 |archive-url=https://web.archive.org/web/20220817135007/https://apnews.com/30d73d7eb31241709ea3aee64afb23bb |url-status=live }}</ref> which would have allowed immediate self-declaration of terminal dues.<ref>{{cite news |title=UPU member countries narrow options on remuneration rates by rejecting Option B |url=https://www.upu.int/en/News/2019/9/UPU-member-countries-narrow-options-on-remuneration-rates-by-rejecting-Option-B |work=Universal Postal Union |date=24 September 2019 |access-date=25 August 2022 |archive-date=21 May 2022 |archive-url=https://web.archive.org/web/20220521014837/https://www.upu.int/en/News/2019/9/UPU-member-countries-narrow-options-on-remuneration-rates-by-rejecting-Option-B |url-status=live }}</ref> The UPU then unanimously passed a Franco-German compromise to allow self-declared terminal dues of up to 70% of the domestic postage rate and increase the UPU terminal dues by 119–164%, phasing in both changes from 2021 to 2025. In addition, countries receiving more than 75,000 tonnes of mail—currently only the United States—could opt in to accelerated self-declared terminal dues on 1 July 2020 in return for an $8 million annual "contribution" to the UPU for five years.<ref name="cep">{{cite news |title=USA claims "total victory" in UPU compromise deal |url=https://www.cep-research.com/news/usa-claims-total-victory-in-upu-compromise-deal |work=CEP-Research |date=26 September 2019 |access-date=4 October 2020 |archive-date=29 September 2020 |archive-url=https://web.archive.org/web/20200929120652/https://www.cep-research.com/news/usa-claims-total-victory-in-upu-compromise-deal |url-status=live }}</ref> Trump adviser [[Peter Navarro]] declared that the agreement "more than achieved the President's goal,"<ref name=upupr/> but he denied that the United States was "buying" the deal with its "contribution".<ref name="cep"/> UPU Director Siva Somasundram hailed the agreement as "a landmark decision for multilateralism and the Union."<ref name=msf>{{cite news |last1=Solomon |first1=Mark |title=Proposal floated to allow USPS self-declaration of foreign postal shipments; keep US in UPU |url=https://www.freightwaves.com/news/proposal-floated-to-allow-usps-self-declaration-of-foreign-postal-shipments-keep-us-in-upu |work=FreightWaves |date=20 September 2019 |access-date=25 September 2019 |archive-date=24 September 2019 |archive-url=https://web.archive.org/web/20190924013842/https://www.freightwaves.com/news/proposal-floated-to-allow-usps-self-declaration-of-foreign-postal-shipments-keep-us-in-upu |url-status=live }}</ref><ref name=upupr>{{cite news |title=UPU member countries reach unanimous agreement on postal remuneration rates |url=https://www.upu.int/en/News/2019/9/UPU-member-countries-reach-unanimous-agreement-on-postal-remuneration-rates |work=Universal Postal Union |date=25 September 2019 |access-date=25 August 2022 |archive-date=21 May 2022 |archive-url=https://web.archive.org/web/20220521015509/https://www.upu.int/en/News/2019/9/UPU-member-countries-reach-unanimous-agreement-on-postal-remuneration-rates |url-status=live }}</ref>