RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/180
23 November 2000
(00-5003)
Council for Trade in Services
PROPOSAL FOR  MEMORANDUM OF UNDERSTANDING ON COOPERATION
BETWEEN THE WTO AND THE UNIVERSAL POSTAL UNION
Note by the Secretariat
At its meeting of 25 February 2000, the Council was informed of the proposal by the
Universal Postal Union that a cooperation agreement in the form of a memorandum of understanding
should be established between the UPU and the WTO.  A communication to this effect from the UPU
was circulated as Job No. 865, dated 16 February 2000.
The Secretariat has now received from the secretariat of the UPU the attached draft of a
"Memorandum of understanding on cooperation between the Universal Postal Union and the World
Trade Organization", which was approved by the UPU Council of Administration on 19 October 2000
(Annex 1).  Also attached is an explanatory note by the UPU describing its functions and setting outreasons why a cooperation agreement would be beneficial (Annex 2).  These documents are now
circulated for discussion at the meeting of the Council for Trade in Services on 1 December.S/C/W/180
Page 2
ANNEX 1
- Draft -
Memorandum of Understanding on Cooperation
between the Universal Postal Union and
the World Trade Organization
THE UNIVERSAL POSTAL UNION AND THE WORLD TRADE ORGANIZATION
(hereinafter referred to as the "Parties")
Considering
the growing interaction between trade and post al policies pursued by individual countries
arising from the globalization of markets,
Recognizing
the increasing linkages between the various aspects of postal and trade policy-making that fall
within the respective mandates of the Universal Postal Union ("UPU") and the World Trade
Organization ("WTO"),
Recognizing
the increasing interaction between the UPU and the WTO, and the desirability of achieving
closer cooperation between them,
In the light of
"Resolution C 9/ 1999 - International law in the field of trade in services.  WTO-UPU
Memorandum of Understanding on Cooperation" adopted by the 1999 Beijing Congress of the UPU,
which specifies inter alia - that the Congress is convinced of the need for the UPU to participate from
the outset of the current round of trade negotiations,
Having regard to
- ARTICLE V of the Agreement Establishing the World Trade Organization, and
ARTICLE XXVI of the General Agreement on Trade in Services (GATS) concerning
consultations and cooperation between the WTO and specialized agencies of the
United Nations;
- ARTICLE 10 - "Relations with International Organizations" of the Constitution of the
Universal Postal Union,S/C/W/180
Page 3
Have reached the following understandings:
1. Purpose of the Memorandum of Understanding
The purpose of this Memorandum of Understanding is to encourage cooperation between the
parties in the discharge of their respective mandates in accordance with the provisions of this
Memorandum of Understanding.
In this regard, the UPU and the WTO shall iden tify areas of common interest within their
respective mandates, with particular emphasis on commercial, technical, regulatory and development
matters, in which cooperation may foster the purposes of both organizations.  The WTO Secretariat
and the UPU International Bureau shall endeavour to cooperate on matters so identified.
2. UPU observers at WTO meetings.
The WTO shall invite designated UPU representatives to observe at meetings of the
Ministerial Conference and the Council for Trade in Services.  UPU representatives shall also beinvited to observe at meetings of other releva nt NVTO bodies (excluding the Committee on Budget,
Finance and Administration, the Dispute Settlement Body, the Appellate Body and dispute settlement
panels) where matters of common interest to both organizations are under discussion.
3. WTO observers at UPU meetings
The UPU shall invite designated WTO representatives to observe at the Universal Postal
Congress, Council of Administration or Postal Opera tions Council, as well as meetings of subsidiary
bodies of these UPU bodies (other than those dealing with the budget, finance or administration),
where matters of common interest to both organizations are under discussion.
4. Exchange of relevant UPU and WTO meeting agendas
The WTO Secretariat shall make available to the UPU International Bureau the agenda of any
WTO meeting (other than those of the Committee on Budget, Finance and Administration, the
Dispute Settlement Body, the Appellate Body and dispute settlement panels) at the time of its
circulation in the WTO, if the agenda includes a postal-related matter that may be of interest to the
UPU, or any other matter that may directly or indirectly affect the postal sector.
The UPU International Bureau shall make available to the NVTO Secretariat the agenda of
any Congress, Council meeting, or meeting of subs idiary bodies of these UPU organs (other than
those on budget, finance and administration), at the time of its circulation in the UPU, if the agenda
includes a postal-related matter that may be of interest to the WTO, or any other matter that may
directly or indirectly affect trade negotiations carried out in the ambit of WTO.  The UPU and the
WTO Secretariats shall make available to each other in advance the relevant documents for the
meetings to which they are invited pursuant to the terms of this Memorandum of Understanding.
5. Cooperation in technical assistance for developing countries and in regulatory matters
The UPU International Bureau and the WTO Secretariat shall endeavour to cooperate in
technical assistance and cooperation activities, within their respective mandates, for developing
countries.  They shall provide information on regulatory matters relevant to trade in postal services, so
as to maximize the usefulness of those activities to their Members and ensure their mutually
supportive nature.S/C/W/180
Page 4
For this purpose, the UPU International Bureau and the WTO Secretariat shall keep in regular
contact and shall inform each other of relevant technical cooperation that each of the Parties is called
upon to provide.
6. Cooperation between UPU and WTO staff
For the purpose of this Memorandum of Understanding, the Director-General of the UPU's
International Bureau and the Director-General of the WTO shall ensure cooperation between the staffs
of the two institutions and, to that end, shall agree on appropriate procedures for collaboration, and
regular exchanges of information on commercial, technical, regulatory and policy issues.
7. Mutual exchange of information
Subject to such limitations as may be necessary  for the safeguarding of confidential material,
the UPU and the WTO shall arrange the timely exchange of information, reports and other documents
of mutual interest, including access to databases,  and shall ensure that any information communicated
under this Memorandum of Understanding shall be used  only within the limits specified by the other.
8. Implementation of the Memorandum of Understanding
The Director-General of the UPU's International Bureau and the Director-General of the
WTO shall be responsible for the implementation of this Memorandum of Understanding and, to that
end, shall make such practical arrangements as they deem appropriate and shall inform theirrespective Members and consult with them regularly as to matters relating to the implementation of
this Memorandum of Understanding.
9. Review of the Memorandum of Understanding
This Memorandum of Understanding shall be reviewed upon the request of either the UPU or
the WTO and may be amended at any time with the written agreement of the Parties.
10. Termination of the Memorandum of Understanding
This Memorandum of Understanding may be terminated by either the UPU or the WTO by
written notice to the other and, unless the Parties otherwise mutually agree, shall terminate six months
after receipt of such notice.
11. Commencement of the Memorandum of Understanding
Following approval by the Council Administrati on of the UPU and the General Council of the
WTO, this Memorandum of Understanding shall come into effect on the date of its signature.
For the Universal Postal Union: For the World Trade Organization:
Thomas E LEAVEY Michael MOORE
Director-General Director-General
Date: Date:S/C/W/180
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ANNEX 2
What is the UPU?
The Universal Postal Union (UPU), with headquarters in Bern, Switzerland, is a specialized
institution of the United Nations that secures the organization and improvement of postal services and
promotes development of postal services among 189 member countries.  As an intergovernmental
organization, it is composed of governments and postal regulators, but universal postal service
providers also play an important role within the organization.
The UPU is an essential tool to fulfill the right of peoples to communication.  The Union
constitutes a single postal territory with freedom of transit guaranteed, whereby members agree to
carry letter post items tendered by other members by the quickest means and most secure routes usedfor the carriage of domestic items.  Member governments pledge to provide everyone with basic
postal services.  In fact, Article 1 of the Universal Postal Convention adopted at the Beijing Congress,
to be effective on January 1, 2001, states that postal users have the right to a universal postal service
involving the provision at all times of quality basic postal services everywhere at affordable prices.
Thus, member countries have an obligation to ensure that postal services meeting their qualitystandards will be made available by the operators responsible for providing the universal postal
service.
The postal services of the UPU's 189 member countries form the largest physical distribution
network in the world.  Some 6.2 million postal employees working in over 700,000 post offices all
over the world handle an annual total of 430 billion letters, printed matter and parcels in the domesticservice, and approximately 10 billion letters, printed matter and parcels exchanged internationally.
The universal postal service providers fulfill the public service obligations mandated by their
governments.  Their role in the development of communications is vital, not only as a means of
exchanging information, but also as a way of maintaining and promoting social cohesion.  Thus, by
virtue of its basic mission to promote and develop communication between the people of the world,the UPU is called upon to play an important leadership role in promoting the continued revitalization
of postal services.
The UPU was founded in 1874 and became a specialized agency of the United Nations in
1948.  Since then, its relations and active cooperation with other international bodies have grown and
intensified.  The UPU maintains particularly close ties with United Nations programs such as UNDP
(UN Development Programme), UNIDCP (UN Inte rnational Drug Control Programme) and UNEP
(UN Environment Programme), but there are also close ties with specialized agencies andintergovernmental organizations, including IT U (International Telecommunication Union), ICAO
(International Civil Aviation Organization), W HO (World Health Organization).  UNESCO (UN
Educational, Scientific and Cultural Organization) the World Bank, WCO (World Customs
Organization), and INTERPOL.  The UPU also has close links with such non-governmental
international organizations as IATA (International Air Transport Association) and ISO (International
Organization for Standardization).
As an example of its relations with international financial institutions, the UPU has
collaborated with the World Bank on an important study of postal sector reform, which contains key
strategies for governments and postal administrations to consider when embarking on postal reform
movements.
The highest body of the UPU is the Universal Postal Congress, which meets every 5 years.
Each Congress unites the plenipotentiaries of the Governments of the member countries.  Between
Congresses, the UPU conducts business through three permanent bodies: the Council ofS/C/W/180
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Administration, the Postal Operations Council, and the International Bureau.  The Council of
Administration consists of 41 members.  One of its functions is the supervision of the activities of the
Union between Congresses.  The Council of Administ ration is mainly composed of representatives of
governments and postal regulators.  The other body elected by Congress, the Postal Operations
Council, consists of 40 members.  It conducts st udies of operational, commercial, technical and
economic nature and coordinates practical measures for the development and improvement of
international postal services.  It also revises the Regulations that complement the Universal Postal
Convention and the Postal Payment Services Agreement adopted by Congress.  The member
countries' representatives in the Postal Operations Council are often postal operators responsible for
providing universal postal services.
The International Bureau is located in Berne, Switzerland, and provides secretariat and
support facilities for the UPU's bodies.  It serves as an organ of liaison, information, and consultation,and promotes technical cooperation among Union members.  The International Bureau is responsible
for ensuring the representation of the Union in its external relations, notably with international
organizations.  It also acts as a clearing-house for the settlement of accounts between postal
administrations for inter-administration charges related to the exchange of postal items and
international reply coupons.
Reasons why a cooperation agreement between the WTO and the UPU will be beneficial
The Universal Postal Congress in Beijing in August-September 1999 recognized that
developments in the field of trade in services within the WTO could substantially affect provisions for
the exchange of international mail.
The Congress was also aware of the possibility that its new terminal system, which
remunerates the country of destination for internal transportation and delivery of mail from abroad,
might possibly not be fully conform with the most favored nation clause of the General Agreement on
Trade in Services (GATS), since the system can be considered to be more advantageous to developing
countries than to industrialized countries.  Nonetheless, realizing that developing countries had
insufficient knowledge of their costs to be part of the cost based system applicable betweenindustrialized countries, Congress adopted the provisions proposed by the Postal Operations Council.
However, the new system is of a transitional nature and the aim is to move to a cost based system for
all countries.  The UPU is now trying to help its member countries to ascertain the costs of their postal
services in order to help the transition towards a uniform system.  In that way the UPU is also
rendering assistance to meet WTO objectives.
Governments would no doubt like international intergovernmental organizations to work
towards the same objectives and in any case not counteract each other.  It goes without saying thatpotential conflict between the mandatory provisions of the UPU Acts and those of the WTO should be
avoided, since conflict between international treaties causes difficulties for governments having
signed them.  Through a close cooperation between the two organizations it will be possible to detect,
at an early stage, areas of possible conflict between the Acts or draft Acts of the two organizations and
to advice member states on solutions to problems that may arise.
There is, of course, an information flow at national level between the different parts of the
government.  However, practice shows that this information flow is insufficient in some member
countries of two organizations and that it needs to be supplemented by an information exchange
between the organizations.
The UPU will also be able to give assistance to the WTO regarding the postal sector, e.g.
furnish information of a technical nature.S/C/W/180
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The UPU has a vast experience in giving assistance to developing countries.  It may be
possible to include information also about WTO requirements in courses prepared for developing
countries.  Furthermore, the International Bureau of the UPU tries through circular letters to spread
information about the WTO and its requirements to postal administrations in developing as well as
industrialized countries.  However, to be able to disseminate valid information, the UPU must havesolid and updated knowledge about the WTO.
In light of the multiple common interests mentioned above, the UPU Congress approved
Resolution C 9/1999, which instructs the Council of Administration, in conjunction with the
International Bureau, to:
- monitor developments in the field of inte rnational law concerning trade in services
and ensure that postal interests are taken into account;
- extend cooperation between the two organizations through the establishment of a
memorandum of understanding, in the interest of member countries;
- ensure that this memorandum respects the functions and objectives proper to each
organization;
- keep UPU member countries informed of developments in this field.
The Council of Administration immediately set up a Project Team, chaired by Australia, that
would be responsible for the relations with the WTO.  The Team drafted a Memorandum of
Understanding for consideration by responsible bodies within the WTO.  This draft Memorandum
was on the UPU side approved by the Council of Administration on 19 October 2000.
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