CROSS-BORDER MAIL DEBATE HEATS UP

CROSS-BORDER MAIL DEBATE HEATS UP

Debate over the shape of European Community cross-border mail and package delivery services after 1992 in fast approaching the boiling point.

The key issue is whether planned harmonization, in line with the concept of the single market, will lead to the development of an integrated European postal organization with an even stronger monopoly than now enjoyed by individual national post offices.The European Commission is preparing a Green Paper on the subject. Details of the report were originally due to be published soon, but apparently will not now appear until this fall at the earliest.

Initially, DG13, the commission directorate in charge of telecommunications and postal policy, appeared to lean toward the idea of designating "reserved services" in many areas of mail and package delivery. Essentially, that means there would be an extension of existing postal authority monopolies for letters and small packages.

More recently, however, DG4, the EC body that deals with competition matters, has made its influence felt, and the entire subject now is attracting increasing public and political attention.

The latest debate on the subject came at a recent one-day conference in London organized by the Adam Smith Institute, a U.K.-based economic think tank, and the European Express Organization, an international express industry body.

Commenting on the subject "More Monopoly or More Competition?" Gordon Barton, chairman of the International Express Carriers Conference, said general awareness of the possible repercussions of harmonizing European postal activities was still "deplorably low."

Fortunately, he said, the DG4 directorate was doing its job well and voicing the concept of competition regarding the issue of postal monopolies after 1992.

"The issue to be determined is whether the distribution in Europe of commercial material such as catalogs, samples, orders and checks should be controlled or exclusively undertaken by national postal monopolies, or whether there should be fair competition and choice," he said.

"If the latter is the course decided, it may be politically necessary for those undertaking competitive activities to pay a tax sufficient to equalize the cost of deliveries to remote areas. In effect, this already happens within the postal system by way of concealed cross subsidization," he added.

Earlier, Douglas Mason, a speaker from the Adam Smith Institute, had told the conference that Treaty of Rome competition rules should be enforced to

break current postal authority monopolies on mail and small package deliveries within the EC.

Under the Treaty of Rome, he claimed, monopolies should only be allowed for "imperative reasons." Considerations associated with postal monopolies did not come under that category.

The rules also should be used to block any moves to develop an integrated European postal organization with a potentially even stronger monopoly on such activities. He suggested a number of possible developments that could be used to counter such a threat.

One such move would be to break up the current U.K. postal office monopoly, perhaps creating a duopoly. Such a move would make it much harder for the EC to develop an integrated European postal organization and monopoly.

An alternative would be to allow existing post offices to deliver in other countries where that was considered economically viable.