Canadian Postal Services exposed to attack by US Multinationals at WTO

March 5, 2001

Ottawa--Multinational courier companies are attempting to impose postal policy reforms rejected by Parliament and the Canadian public through the back door of WTO trade negotiations and litigation, according to a new report from the Canadian Centre for Policy Alternatives.

"The recent $US 160 million NAFTA lawsuit against Canada by UPS, the world's largest courier company, should be a wake-up call." said Scott Sinclair, author of the study. "Unfortunately, Canada's WTO negotiators have exposed us to similar attacks under the GATS," he added.

The 60-page study, " The GATS and Canadian Postal Services," examines the implications of the General Agreement on Trade in Services (GATS) and the current negotiations to expand it for Canada Post and Canadian postal services.

US-based multinational courier companies are using the GATS negotiations to try to force Canada Post out of parcel delivery and other competitive services. "Restricting Canada Post to core letter-mail services would doom the Canadian public postal system to gradual erosion and decline," said Sinclair

Foreign multinationals are seeking GATS-enforceable rights to Canada Post's advantages without being encumbered by its public service obligations, according to the study.

The report's key findings include:

  • The GATS conflicts with existing multilateral rules that ensure the delivery of international mail--the Universal Postal Union rules.
  • The GATS prohibits minimum service requirements in Canada's rural areas and the north.
  • By covering courier services under the GATS, negotiators have exposed Canada Post to challenges under the GATS anti-monopoly rules.
  • A quirk of the United Nations system for classifying services may be all that protects Canada from an even more devastating national treatment challenge.
  • This vital protection however, is at risk in ongoing discussions in Geneva to reclassify postal and courier services.

The study urges that Canada's trade policy objectives and negotiating strategy be brought into line with the clear Parliamentary mandate given to Canada Post.

The report suggests immediate steps that Canada should take to protect public postal services under the GATS. "But the many threats posed by the GATS to the Canadian public postal system demonstrate that it is a deeply flawed agreement hostile to public services and to regulation in the public interest," Sinclair concludes.

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