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Deutsche Post 2006: An Updated Critique of Domestic Monopoly Fueling Global Growth, by Robert Cohen, reviews Deutsche Post's expansion since the 2004 Economic Strategy Institute study that analyzed the firm's privatization. In that study, we concluded: "The potential threat is that U.S. firms will face competitors from Europe or other nations that will use their monopoly positions in domestic markets to cross-subsidize their operations in the United States and around the globe."

This examination only reinforces our original analysis that Deutsche Post, and its wholly-owned subsidiary DHL, will exploit its domestic monopoly to compete unfairly with U.S. and other international express delivery firms that have obeyed the rules of competitive markets.

We continue to believe that Deutsche Post's success in transforming itself from a state-owned monopoly into a formidable private corporation should raise concerns among policymakers. After benefiting from extensive state subsidies and special treatment, Deutsche Post's growth into a major logistics and express delivery firm is serving as an example for other monopolies that are being privatized, such as Japan Post. We continue to be concerned that the unregulated privatization of former state-owned monopolies in the postal and express delivery industries could have significant consequences for the development of a fair playing field for an industry that is so critical to the global economy.

ESI continues to believe that it is important for the U.S. International Trade Commission to examine the potential impact of Deutsche Post's domestic monopoly on its international operations, including its efforts to expand its presence in the United States. ESI also continues to hope that the U.S. Trade Representative will press for international protocols and changes in the General Agreement on Trade in Services (GATS) to address trade and competition issues raised by the liberalization of monopoly markets.