w t i a d v i s o r s sadc postal & courier services sector forum supported by the sadc/giz...
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SADC Postal & Courier Services Sector ForumSupported by the SADC/GIZ Project on Trade in Services
POSTAL REFORM, TRADE IN SERVICES AND EFFECTIVE ACCESS: CONSIDERING POLICY OPTIONS FOR MUTUAL REINFORCEMENT
SESSION 2: MAPPING THE ISSUES
Swakopmund, 19 April 2013
Hannes Schloemann, Director, WTI Advisors
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“The Post”: Infrastructural Role(s) Recalled
• Central element of societies’ communications infrastructure– Letters and parcels as physical means of communication– Central role of the National Post over the past 1-2 centuries
• UPU system as extension of national “postal territory”– Traditionally state run, state owned (but not always,
everywhere) Postal service as responsibility of the state– Traditionally combining postal and telecoms
• Multiple other infrastructural roles of “the Post (Office)”– Financial services (incl. social services)– Transportation– Supply/distributionEtc…
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Postal Services and Courier Services
• Traditional coexistience• In principle identical services ( courier part of infrastructure)• Traditional difference in roles
– State/national post: Normal, comprehensive, universally available, secure, state-guaranteed, big (and international UPU)
– Private: Ad hoc, as and when needed, complementary, partial coverage, at user’s risk (and usually local)
• Perhaps key difference: Overall responsibility– The private provider goes where/when he wants/can– The Post goes everywhere, all the time
Does this dichotomy still apply? How much?
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“Postal Reform” – Why, what, how?
• Differentiating two challenges – related but not identical:– Securing supply of & access to services which people & businesses
need– Reforming the existing postal operator to make it “fit” for present and
future challenges• Four avenues:
– Re-organizing the DPO (e.g. corporatization, privatization, financing)– Re-organizing the postal/courier sector (e.g. competition, trade)– Re-organizing state administration (e.g. regulator & its activities)– Re-organizing wider infrastructural aspects (e.g. addressing,
administration of social services)
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Universal Service – Idea & Scope
• Idea: Securing effective infrastructure with a pan-societal perspective – for people, economy, state
• UPU definition of “universal postal service” : “[T]he permanent provision of quality basic postal services at all points in a member country’s territory, for all customers, at affordable prices.” (Art. 1 UPC)
Six Elements – Minimum services coverage (“basic postal services”)– Minimum quality (“quality”)– Minimum time coverage (“permanent”)– Ubiquity (“at all points in a member country’s territory”)– Maximum personal coverage (”all customers”)– Affordability (“at affordable prices”)
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Universal Service – The Economic/Business Challenge
• Ubiquity, time coverage and affordability for all may (but not always has to) make commercial service provision non-viable
• Depending e.g. on – geography– population density– population structure (poverty)– economic structure– transportation infrastructure
Universal service may need additional financing to be viable (requires analysis of additional costs not covered by fees collected for)
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Universal Service – Financing Mechanisms
• 4 main avenues:1. Postal monopoly/reserved services (internal/external cross-
subsidization from monopoly rents)
2. Universal Service Fund (external subsidization from within sector)
3. Direct subsidies/other support (external subsidization from taxes)
4. Other business (internal cross-subsidization from profits elsewhere) All four are subsidies: someone else pays (other than beneficiary) In view of financing (1-3) it may be attractive to provide US
• Sometimes no financing needed at all (e.g. UK) – universal service finances itself – how?– Original endowment of DPO with assets (arguably an initial subsidy)– Or geographical etc. factors simply make US good business
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Postal Monopoly / Reserved Services
• Coverage not to be confused with universal service scope • Financing mechanism for a societal cause (universal service),
not natural attribute of The Post• Advantages – inter alia less risk of corruption• Disadvantages – i.a. costs hidden, risk of inefficiencies
Risk of a paradox outcome: If reserved services are within universal services, the inefficiencies may affect precisely those services which the monopoly is meant to promote
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Competition & Trade
• Main factor: The postal monopolyMain dividing line: DOP v. other providers (competition)(Apparently) less of an issue: Domestic v. foreign (trade)
• Main technical challenge: Defining exactly the coverage of the monopoly– Differentiating clearly and explicitly reserved and non-
reserved (competitive) services (ideally positive definition)– Related/overlapping: Differentiating categories of services
the “classification issue” (or “classification debate”) in GATS and elsewhere
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Competition & Trade: The “Classification Issue”
• Traditional distinction between postal & courier relies on who provides service (“postal administration” or other) Outdated and technically odd (for purposes of trade regulation)Effect: Excludes from coverage of “courier” everything the National
Post does (even if not reserved or USO)Also: Does not account for complexity of express delivery services
• WTO debate about solutions – proposals:– Merge postal/courier, define services, exclude explicitly reserved
services (EU, Switzerland, New Zealand)– Separate category “express delivery services” (US)
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Trade in Postal/Courier Services: Other Issues
• Main Trade Barriers include:
– (Monopoly/ies)
– Local incorporation requirements/nationality requirements
– Customs regulations
• Main Regulatory issues include:
– Anti-competitive practices of powerful incumbents
– Unclear and/or burdensome USOs
– Independence of regulator from postal operator not complete/effective
– Burdensome licensing
• Taxes & fees
