WASHINGTON, D.C.— Bills introduced in the United States Senate and House of Representatives are taking up the issue of international rates for small package delivery and subsidies supporting foreign merchants shipping to the U.S.
HOMEWORLD BUSINESS® explored the Universal Postal Union, the forum where international mail and small package shipping rates are determined, and related delivery issues in the March 5 issue, focusing on how those factors impact the housewares industry.
Both bills emerged in mid-April. In the House, Texas Congressman Kenny Marchant introduced H.R. 5524, a bill that directs the U.S. Secretary of State and U.S. Postal Service to address inequities between domestic and international shipping charges for small packages weighing less than 2 kilos, or 4.4 pounds, shipped to consumers in the U.S. Businesses in China generate most of the shipments the bill would cover. Rep. Ralph Abraham of Louisiana is an original co-sponsor of the legislation.
The Universal Postal Union determines rates for international mail delivery, which includes packages under 4.4 pounds, during meetings it holds every four years. The U.S. State Department represents the U.S. at the negotiations in cooperation with the Postal Service.
The bill would amend title 39 of the U.S. Code and require the Postal Service to establish rates for delivery of inbound international mail that create an equal playing ground between foreign and domestic small package shippers. The bill also calls for reviews of any subsidies foreign governments may provide merchants in their countries that support the shipment of e-commerce goods to the U.S. as well as laws and regulations affecting U.S. business conducting digital operations internationally.
The bill proposes that the U.S. Secretary of Commerce, in consultation with the Office of the U.S. Trade Representative and other relevant federal agencies, submit a report to the President and Congress reviewing subsidies and laws nations may administer that could provide businesses operating in those countries an unfair advantage in e-commerce trading or unfairly disadvantage U.S. merchants. The reviews would be a first step toward remedial action if the bill were adopted.
In announcing the bill’s introduction, Marchant said, “If you have ever bought stamps or shipped a package through the mail, you’re also footing part of the bill for inbound packages from China. Just this year, the USPS raised postal rates on my constituents and domestic customers throughout the country while leaving this subsidy on international shipments unchanged. This unfair policy of propping up foreign competitors benefits companies overseas and punishes main street businesses in our communities. H.R. 5524 requires the Postal Regulatory Commission to establish postal rates that ensures parity between domestic and international shippers and levels the playing field for American small businesses competing in this global economy.”
In a letter provided to HomeWorld Business by his office, Marchant asked Congressional colleagues to support his bill and help stop Americans from subsidizing shipments from China, level the playing field between international and U.S. small package shippers, and rationalize Postal Service finances.
The letter stated, in part: “The USPS lost $134.5 million on international letter post in fiscal year 2016. This was a stark increase from the $97.9 million in losses from 2015. Given the expected increases in e-commerce shipping, if unchecked, these losses will only continue to grow.”
Days before the House action, Louisiana Senator Bill Cassidy introduced legislation that would require the Secretary of State to negotiate the elimination of all foreign subsidies for international postal shipments to the U.S. The Senate bill calls for UPU-based negotiations, beginning no later than January 1, 2021, leading to the elimination of such subsidies.
In introducing his bill, Sen. Cassidy stated, “The current system costs American jobs at the expense of American taxpayers. American taxpayers should not be subsidizing Chinese companies mailing items to the U.S., competing with our businesses.”