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Online traders from non-EU countries – Question 3 of 4

Question écrite de M. Maximilian KRAH - Commission européenne

Question de M. Maximilian KRAH,

Diffusée le 19 mars 2024

Subject: Online traders from non-EU countries – Question 3 of 4

Temu and other Asian e-commerce companies can ship their products from China to the EU without paying postage. This is because the Universal Postal Convention ensures that companies from countries which have or have had a lower level of economic development can send letters and parcels at domestic rates. Since Chinese suppliers often do not even appear to pay domestic postal charges, we can presume that the latter is being subsidised by the state in some way. This clearly favours Chinese suppliers over suppliers from EU Member States, who always at least have to pay domestic postal charges. It is therefore cheaper to order a product from Shanghai than from the neighbouring village, even if the product itself is just as expensive.

1. How does the Commission plan on tackling this case of competition distortion?

2. How much economic damage does the Commission estimate has been caused so far?

Submitted:20.3.2024

Réponse - Commission européenne

Diffusée le 21 mai 2024

Answer given by Mr Breton on behalf of the European Commission

(22 May 2024)

1. When online traders from non-EU countries ship their product to the EU using postal services, they must pay postage fees for the service in their country of origin. This fee includes wholesale rates that the origin provider must pay to the destination provider for the delivery, based on an international agreement under the Universal Postal Union (UPU). The third UPU Extraordinary Congress, held in Geneva in 2019, adopted a comprehensive reform of the remuneration system for cross-border small packages that are mainly used by e-commerce companies. The reform set out a gradual process to allow Member States to apply self-declared rates, subject to certain limitations, notably that they should not exceed 70% of domestic rates. This new system replaces the previous one where wholesale remuneration rates for the exchange of international postal items between universal postal service providers privileged certain countries categorised as developing, including China. Although the reform will be fully in force only in 2025, it already resulted in a considerable increase in postage fees for senders in third countries. This resulted among other things in a steep fall of one third in the number of parcels entering the EU from abroad in the period 2018-2022.

2. The Commission does not dispose of analysis quantifying the economic impact of the change in the UPU pricing system that was endorsed by the Member States as part to the UPU Convention.

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