The major changes resulting from the 1998 Act that related to the UPU included (1) transferring primary responsibility for U.S. policy regarding the UPU from USPS to the Department of State and (2) requiring the Department of State and USPS to consult with private providers and users of international postal services, the general public, and such federal agencies and other persons that each considers appropriate in carrying out its respective international postal responsibilities. These requirements for consultation are new in that USPS was not subject to similar requirements prior to enactment of the law. Under the new law, the Department of State may, with the consent of the president, negotiate and conclude postal treaties, conventions, and amendments within the framework of UPU agreements that are binding on the United States and other UPU member countries. USPS can also, with the consent of the president, negotiate and conclude certain postal treaties and conventions, subject to the requirements of the new law, which specifies that USPS actions shall be consistent with the policies of the Department of State. Further, under the new law, USPS continues to have authority to set international postal rates with the consent of the President. In addition, the new law specified that, starting in fiscal year 1999, USPS would allocate to State such sums as may be reasonable, documented, and auditable for State to carry out its UPU-related responsibilities under 39 U.S.C. 407. To fulfill this requirement, the Department of State and USPS signed an interagency agreement that specified that USPS would provide $160,000 to the Department of State as reimbursement for its UPU-related activities in fiscal year 1999. The congressional intent behind the new law was to ensure that the development of U.S. policies for UPU-related matters was fair, evenhanded, and open to all interested parties. A “Sense of Congress” resolution included in the legislation stated that: “It is the sense of Congress that any treaty, convention, or amendment entered into under the authority of section 407 of title 39 of the United States Code, as amended by this section, should not grant any undue or unreasonable preference to the Postal Service, a private provider of postal services, or any other person.” In 1998, we reported that private delivery companies had made allegations that USPS had gained unfair competitive advantages through its past role as the U.S. representative in the UPU. These concerns involved USPS’ dual role as the U.S. negotiator in international agreements that set the rules for the exchange of international mail and parcels by national postal administrations as well as competitor for the delivery of outbound international items, including documents and parcels. Shortly after enactment of the new law, the Chairman of the House Subcommittee on the Postal Service called on the Department of State to develop a U.S. policy position toward the 1999 UPU Congress that would “…serve the interests of all American participants in the postal and delivery sector, whether public or private.” To accomplish our objective, we reviewed applicable laws and the legislative history and obtained documentation from the Department of State regarding its activities concerning the UPU. We also obtained correspondence and documentation from USPS and other federal agencies and stakeholders involved in State consultations regarding U.S. policy on UPU matters. Further, we attended public meetings held by State to brief interested persons on UPU issues and U.S. participation in the UPU, as well as a 1-day conference convened by State to discuss UPU issues and developments in the international postal sector. In addition, we interviewed officials from organizations in the U.S. delegation to the 1999 UPU Congress to obtain their views on the strengths of State’s performance to date and opportunities for improvement. Specifically, we interviewed officials of the Department of State, USPS, the Department of Commerce, and the Postal Rate Commission (PRC), who represented their agencies at meetings on UPU matters, as well as representatives of the Air Courier Conference of America (ACCA) and the Direct Marketing Association (DMA). We also interviewed the officials who represented the Office of the U.S. Trade Representative (USTR) and the Department of Justice at meetings on UPU matters. We conducted our review from November 1998 through January 2000 in accordance with generally accepted government auditing standards. The Department of State made progress in implementing its UPU responsibilities by taking steps to consult with private providers of international postal services, postal users, other federal agencies, and the general public. In addition, State clearly signaled changes in U.S. policy on issues related to UPU reform. However, State has the opportunity to improve its implementation in several respects, as described in the next section of this report. The Department of State took steps to consult with interested parties and to coordinate with USPS, other federal agencies, and nongovernmental stakeholders that were involved in UPU matters through their inclusion in the U.S. delegation to the UPU Congress. Specifically, State held public meetings where interested parties could offer input, interagency meetings to discuss U.S. policy on UPU issues, and meetings and communications with individual stakeholders that included coordination meetings with USPS and other stakeholders in the U.S. delegation to the UPU Congress. The Department of State also took steps to increase access to UPU documents and to UPU meetings by making U.S. proposals to the UPU Congress accessible on a new Internet home page devoted to UPU matters and by giving access to UPU documents upon request. Further, State included representatives of the Department of Commerce and PRC and private sector organizations in the U.S. delegation to the 1999 UPU Congress. This was reportedly the first time that representatives of private-sector organizations had been included in the U.S. delegation to a UPU Congress. These actions represented progress in providing stakeholders and the public with relevant information and giving them an opportunity to offer input. Several stakeholders recognized the Department of State’s progress in this area. For example, USPS officials said that they considered State’s consultations with stakeholders and the public were handled in an evenhanded way and gave all participants an opportunity to become informed and to have their interests considered. A Federal Express Corporation (FedEx) representative said that the State official who headed the U.S. delegation to the UPU Congress tried to be fair and open in obtaining input. A USTR official said that State used an evenhanded approach in dealing with the conflicting interests of USPS and its competitors on UPU matters. Further, PRC officials said that State was open and receptive to all views. The Department of State gave interested parties an opportunity to offer input at three public meetings and held several interagency meetings to discuss U.S. policy on UPU matters (see table 1). State reported that it was “committed to a fair and open process” and that “as an initial step in this open, transparent process, State held its first formal public meeting on U.S. policies in the UPU” on January 26, 1999. State held two subsequent public meetings on April 15 and July 9, 1999. Each public meeting was advertised in the Federal Register and featured briefings on UPU matters and State’s UPU-related actions. Attendees were given an opportunity to ask questions and offer input. State officials said after the UPU Congress that they were satisfied with the outcome of their efforts to reach out to stakeholders, raise and discuss issues, and develop policies. In addition to the public and interagency meetings, the Department of State held several meetings with stakeholders relating to the UPU. State also sponsored a 1-day conference to discuss the future of the UPU and of the international mail system. Invited participants included representatives of federal agencies, private providers and users of international mail services, consultants, and academics, as well as representatives of the World Bank and two European postal administrations. Conferences on UPU-related topics may be a useful option for focusing on particular topics and promoting dialogue among stakeholders. The Department of State made efforts to increase access to UPU documents by making U.S. proposals to the UPU available on a new Internet home page devoted to international postal policy and the UPU, and by making access to documents on the UPU’s Internet site available upon request. Inaugurated in April 1999, this home page contained links to U.S. proposals to the UPU Congress; to State’s February 11, 1999, statement on its UPU responsibilities; and to the UPU Internet site. A State official informed interested parties in a March 1999 memo and announced at the April 15 public meeting that, based on an agreement with the UPU Secretariat, State would make the password to UPU documents on the UPU Internet site available upon request. These actions made U.S. proposals to the UPU available to the general public for the first time and also gave interested parties access to UPU documents on the UPU’s Internet site for the first time. A State official said that these actions were taken to address concerns about access to UPU-related documents that had predated State’s role as the lead agency responsible for U.S. policy relating to the UPU. The Department of State included representatives of USPS, USTR, PRC, ACCA, and DMA in the U.S. delegation to the UPU Congress. These representatives obtained access to some UPU-related information, such as U.S. position papers on the more than 500 proposals before the UPU Congress. State held daily meetings of the U.S. delegation to coordinate activities and discuss issues and plans. State officials reportedly also obtained input from representatives of other organizations. “Worldwide, the postal sector is opening up to competition. In many countries, including the United States, it can no longer be said that the universal service operator fully represents the interest of all stakeholders in setting postal policy.