UPS to make case v. Canada Post
Nearly five years after launching its dispute,
U.S.-based United Parcel Service Inc. will finally get to air its
complaint this week that Canada Post is unfairly trying to use its
postal monopoly to keep the courier rival at bay.
UPS will make its case before a North American Free Trade Agreement
panel that Canada Post and Ottawa’s Canada Border Services Agency
have discriminated against the Canadian subsidiary of UPS to give
Canada Post an edge in the lucrative courier business.
UPS launched the complaint under the controversial “investor
rights” Chapter 11 of NAFTA, a part of the trade pact that attempts
to protect the interest of foreign companies operating in Canada,
Mexico and the United States. UPS is seeking up to $185-million in
damages.
UPS has claimed its investment in Canada through UPS Canada is
being limited by Canada’s Post’s network of mailboxes and post
offices and, as a result, Canada Post has an unfair advantage when
delivering parcel, express and courier services that are in
competition with private courier services.
“If UPS wins, Canada Post may opt to get out of the courier
business, which would spell disaster for the longer-term financially
viability of Canada Post. The corporation needs the profits it gets
from the courier business to provide universal service,” said
Deborah Bourque, president of the Canadian Union of Postal Workers.
Canadian postal and trade officials, however, said yesterday they
believe there is little chance UPS will ultimately win. The NAFTA
panel hearings stretch out all week, although a decision is not
expected for months.
“We are pretty confident,” said John Caines, a spokesman for Canada
Post.
Much of the UPS case has been tossed out, including accusations
that Canada Post illegally cross-subsidized its services, that it
indulges in predatory pricing and that it lacked government
supervision.
“We are vigorously defending our interest in this case,” said
Andrew Hannon, a spokesman with International Trade Canada.
Copyright National Post Financial Post 2005
