The United States formally moved on Wednesday to withdraw from one of the oldest international organizations in a bid to lower rates for foreign postal deliveries of small packages in the United States.
The formal notification, known as a letter of denunciation, to withdraw from the Universal Postal Union (UPU) is being sent by the State Department in response to what the administration of President Donald Trump views as an unfair advantage primarily for China, but also for such other countries as France and Germany, in online commerce.
The existing international postal system makes it cheaper to ship a package from China to America than from one side of the United States to the other.
"It creates huge costs to the U.S. postal system," which has to charge higher rates to American companies in a cross-subsidy, "so that costs jobs," according to a senior Trump administration official, speaking to reporters on a background briefing call.
The unfair international postal rates, according to the official, also are being used by China to ship counterfeit goods and narcotics, such as fentanyl, to the United States.
From now on, the United States will have "self-declared rates" for packages under 2 kilograms (4.4 pounds) to correct what U.S. officials call a "major economic distortion."
Renegotiation effort
While the yearlong withdrawal from the 144-year-old Swiss-based organization is underway, the United States will seek to renegotiate rules for parcel rates.
"If negotiations are successful the administration is prepared to rescind the notice of withdrawal and remain in the UPU," according to a statement from White House press secretary Sarah Sanders.
"Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China," said National Association of Manufacturers President Jay Timmons.
The manufacturers association boss had sent a letter in April to U.S. Treasury Secretary Steve Mnuchin complaining that the UPU system allows China to receive increasing subsidies from the U.S. Postal Service, which it says cost the USPS $170 million last year.
"And that loss is growing at a roughly 40 percent rate annually" because of booming Chinese e-commerce sales to Americans, according to NAM.
The UPU acknowledged on Wednesday that it had received a letter the same day from the United States to withdraw from the union a year from now.
UPU Director General Bishar Hussein, according to the organization, "regrets the decision and will seek to meet representatives of the government of the United States of America to further discuss the matter."
Hussein, in a statement, said the UPU "remains committed to attainment of the noble aims of international collaboration by working with all its 192 member countries to ensure that the treaty best serves everyone."
The move to withdraw from the UPU, now a part of the U.N. family of organizations, is the latest one by Trump against the established international multilateral system of treaties and agreements the U.S. president blames for undermining American competitiveness. It also comes amid an escalating trade dispute between Beijing and Washington that has resulted in U.S. imposition of tariffs on about $250 billion worth of Chinese goods and the Chinese retaliating with similar punitive taxes on about $110 billion in American products.
