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Study on the External Dimension of the EU Postal Acquis WIK-Consult Final Report Study for the European Commission, Directorate General for Internal Market and Services Study on the External Dimension of the EU Postal Acquis by James I. Campbell Jr Alex Kalevi Dieke Dr. Martin Zauner Associate contributor: Dr. David Luff The views and opinions expressed in this study are those of the authors and do not necessarily reflect the position of the European Commission. Bad Honnef, November 2010 Study on the External Dimension of the EU Postal Acquis I Contents Tables V Figures VI Executive Summary i 1 Introduction 1 2 EU Postal Acquis and External Relations 3 2.1 Five pillars of the EU postal acquis 3 2.1.1 First pillar: high quality universal postal service 4 2.1.2 Second pillar: customer choice through regulated market opening 6 2.1.3 Third pillar: improved protection of users 7 2.1.4 Fourth pillar: fair and impartial regulation 7 2.1.5 Fifth pillar: fair market conditions ensured by NRA 8 2.2 External relations: four principal legal frameworks 9 2.2.1 International trade law: global and bilateral agreements 9 2.2.2 Acts of the Universal Postal Union 10 2.2.3 Customs law: global agreements and EU provisions 11 2.2.4 International aviation law: multimodal operations 16 2.2.5 Summary of external relations relating to postal services 18 3 International Postal Markets 19 3.1 International letter post 19 3.2 International parcels and express services 22 3.3 Presence of EU postal operators and suppliers in foreign markets 25 3.4 Conclusions on the relevance of international postal markets to the EU 31 4 Regulation of Foreign Postal Markets 33 4.1 Postal regulation in foreign markets and in the EU 33 4.2 Country profiles 39 4.2.1 Australia (AU) 39 4.2.2 Brazil (BR) 42 4.2.3 Canada (CA) 45 4.2.4 China (CN) 48 II Study on the External Dimension of the EU Postal Acquis 4.2.5 India (IN) 51 4.2.6 Japan (JP) 54 4.2.7 Russia (RU) 57 4.2.8 Switzerland (CH) 60 4.2.9 Turkey (TR) 63 4.2.10 United States of America (US) 66 5 Trade Agreements and International Postal Services 69 5.1 Classification of international postal submarkets 69 5.1.1 Universal Postal Union 69 5.1.2 EU Postal Directive 71 5.1.3 Trade law 72 5.1.4 Observations on classification of postal services 77 5.2 GATT and postal services 78 5.3 GATS and postal services 80 5.3.1 General and specific obligations 81 5.3.2 Modes of supply 81 5.3.3 Additional obligations with specific commitments 84 5.3.4 Current commitments with respect to postal services 88 5.4 Doha Round and implications for postal services 88 5.5 Preferential trade agreements and postal services 91 5.5.1 EU-Chile agreement (2005) 92 5.5.2 EU-Cariforum agreement (2008) 94 5.5.3 EU-South Korea agreement (final approval pending) 96 5.5.4 PTAs in negotiation 97 5.5.5 Other negotiations and understandings 97 5.5.6 Summary of PTAs and other negotiations 100 6 Universal Postal Union and International Postal Services 103 6.1 Overview of the UPU 103 6.2 Legal measures of the UPU 106 6.3 Administration of the UPU 108 6.3.1 Congress 108 Study on the External Dimension of the EU Postal Acquis III 6.3.2 Council of Administration 110 6.3.3 Postal Operations Council 114 6.3.4 International Bureau 116 6.3.5 Other UPU entities 117 6.3.6 Budget of the UPU 118 6.4 Terminal dues 120 6.4.1 Development of terminal dues 120 6.4.2 Distortions created by UPU terminal dues 127 6.4.3 Economic model to assess effects of different terminal dues rules 131 6.5 Controlling bypass: remail, ETOEs, and IMPC codes 137 6.5.1 Remail 138 6.5.2 Extraterritorial offices of exchange and IMPC codes 143 7 Coordination of the Positions of Member States at the UPU 147 7.1 Coordination of EU Member States at prior UPU congresses 147 7.1.1 Origin of the common declaration of EU Member States 147 7.1.2 Coordination of positions of Member States at the 2004 Bucharest Congress 149 7.1.3 Coordination of positions of Member States at the 2008 Geneva Congress 152 7.2 Legal framework for coordination of positions of Member States 153 7.2.1 Duty of coordination 154 7.2.2 Common Commercial Policy 155 7.2.3 AETR doctrine 157 7.3 Scope of coordination: governmental/regulatory versus operational/commercial functions 163 7.3.1 Criteria for distinguishing governmental/regulatory and operational/ commercial issues 163 7.3.2 Governmental or regulatory issues in the UPU Convention 167 7.4 Positions of Member States at the 2012 Doha Congress and after 170 7.4.1 Positions on governmental or regulatory issues at Doha 170 7.4.2 Positions on operational or commercial issues at Doha 174 7.4.3 Positions in the POC and CA after Doha 177 IV Study on the External Dimension of the EU Postal Acquis 8 Conclusions and Recommendations 179 8.1 NRAs should consider how to better enforce key provisions of the Postal Directive relating to intra-EU cross-border postal services 179 8.1.1 Postage rates for outbound international universal services 179 8.1.2 Terminal dues and inward land rates 180 8.1.3 Non-discriminatory access to universal services 182 8.1.4 Preparation for a multi-operator international environment 183 8.1.5 Designation and authorisation of postal operators 184 8.2 The EU and Member States should improve coordination in the development of international postal policies. 187 8.2.1 Coordination of positions of the EU and Member States at the UPU 187 8.2.2 Coordination of positions towards international trade, international postal services, and customs control. 188 8.3 The EU should reconsider some aspects of its approach to trade agreements relating to postal services 188 8.3.1 A more ‘international vocabulary’ for external postal negotiations 189 8.3.2 Focus on commercial parcels and express services 191 8.3.3 More specific safeguards on authorisation procedures for postal services 192 8.4 The EU should encourage an international regulatory dialogue on the governance of international postal services. 193 Bibliography 195 Appendix A: Description and key parameters of the terminal dues model 199 Study on the External Dimension of the EU Postal Acquis V Tables Table 3-1 Cross-border letter post by world regions (2008) 20 Table 3-2 Cross-border express and parcel services by world regions (2008) 23 Table 4-1 Postal and financial indicators 34 Table 5-1 UN CPC classifications for postal and courier services 73 Table 5-2 GATS modes of supply 82 Table 6-1 Major acts and agreements of the UPU 106 Table 6-2 UPU regions 110 Table 6-3 EU 30 membership in UPU CA and POC, 1994-2008 112 Table 6-4 POC 4-term members (1994-2011) 115 Table 6-5 UPU terminal dues: basic rates for developing countries 121 Table 6-6 Summary of UPU terminal dues for industrialised countries 122 Table 6-7 A terminal dues example 129 Table 6-8 Price level and estimated domestic bulk rates for typical letter post item (all countries) 134 Table 7-1 Tentative list of governmental or regulatory functions in the UPU Convention 168 Table A 1 Model results: Estimated gains/losses for EU30 countries when moving from base case (domestic bulk rates) to alternative terminal dues rules (m SDR) 205 Table A 2 Countries included in the model 206 Table A 3 Estimated percentage of intra EU30 letter post flows 207 Table A 4 Distribution of intra EU30 cross-border letter post (m items) 208 Table A 5 Distribution of extra EU30 letter post – export (m items) 208 Table A 6 Distribution of extra EU30 letter post – import (m items) 208 Table A 7 Standard weight profile 209 Table A 8 Summary of alternative terminal dues rates (SDR) 210 Table A 9 Payments (in m SDR) for base case (Domestic bulk rate) 211 Table A 10 Payments (in m SDR) for alternative TD rule UPU 2008 terminal dues, and change compared to base case 212 Table A 11 Payments (in m SDR) for alternative TD rule UPU 2008 without cap or floor and change to base TD rule 213 Table A 12 Payments (in m SDR) for alternative TD rule REIMS II and change to base TD rule 214 VI Study on the External Dimension of the EU Postal Acquis Figures Figure 3-1 Global mail market and market shares by volume (2008) 19 Figure 3-2 Significance of EU30 in world cross-border letter post 21 Figure 3-3 Significance of intra-EU30 mail in the EU30’s total cross-border letter post 21 Figure 3-4 Global express and parcels markets by world region (2008) 22 Figure 3-5 Cross-border CEP-markets (2007) 24 Figure 3-6 Neopost Group: Sales by regions and by business segment (2009) 27 Figure 3-7 Francotyp Postalia Group: Sales by regions and by business segment (2009) 28 Figure 6-1 UPU members ranked by share of outbound international letter post, 2007 109 Figure 6-2 Organisation of Council of Administration, 2008-2011 113 Figure 6-3 Organisation of Postal Operations Council, 2008-2011 116 Figure 6-4 Funding of the UPU 118 Figure 6-5 UPU draft regular budget for 2011 119 Figure 6-6 UPU Terminal dues 2010 124 Figure 6-7 UPU target system 2010 versus 20 gram postage rate 126 Figure 6-8 UPU terminal dues compared to domestic bulk rates, 2008 133 Figure 6-9 Estimated gains or losses under UPU 2008 terminal dues, compared to domestic bulk rates 135 Figure 6-10 Estimated gains or losses under UPU 2008 terminal dues without cap or floor, compared to domestic bulk rates 136 Figure 6-11 Estimated gains or losses due to REIMS II terminal dues, compared to domestic bulk rates 136 Study on the External Dimension of the EU Postal Acquis i Executive Summary Executive Summary Since 1997, the European Union (EU) and its Member States have transformed the laws governing postal services.
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