Trump's plans to withdraw from UPU could cause "postal chaos"

Trump moves to exit 144-year-old postal pact over cheap China mail

Trump to exit global postal treaty in another shot at China

It was also adopted against the backdrop of escalating trade disputes between Beijing and Washington that led to the imposition of US duties on imports from China at a cost of approximately $ 250 billion, to which Beijing responded with similar tariffs on American goods worth $ 110 billion.

Reports stated that the US withdrew on the grounds that global mailing rates set by the UPU, in the view of the USA, give an unfair advantage in particular to China.

On AliExpress, Internet giant Alibaba's e-commerce portal for worldwide buyers, shipping is free if a pair of $10.29 yoga trousers are transported via ePacket, the name of the subsidized service by the US Postal Service.

"It creates huge costs to the US 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.

National Association of Manufacturers President and CEO Jay Timmons said President Trump "deserves tremendous credit for the administration's focus on eliminating the anti-U.S. manufacturer subsidy China receives from the U.S. Postal Service".

The United States plans to withdraw from the United Nations' Universal Postal Union, which facilitates low-priced distribution of foreign packages throughout the country, as it continues to wage war on Chinese exports. Poor and developing nations are assessed lower rates than wealthier countries, a benefit to Chinese companies. While the agreement is meant to give Asian and African countries incentives to develop their economies, China has used the discounted rates so effectively that it now accounts for 60 percent of the packages sent to the U.S.

'China has always defended and supported multilateralism and the work done by the Universal Postal Union.

Yet the US should be able to solve the problem without withdrawing from the Universal Postal Union entirely, as the Trump administration has now said it will do unless it can renegotiate the global treaty before January 2020.

According to the union's rules, members will have a year to negotiate new terms before the withdrawal becomes permanent.

But the provision also allows Chinese producers to ship items to the United States at significantly low rates even compared to some United States domestic shipping rates. But unlike the president's obsession with tariffs-which increase costs for both consumers and American industries that depend on foreign trade, foreign supplies of raw materials, or even domestic supply of materials subject to price increases as foreign supplies are hit with tariffs-withdrawing from the UPU at least contains a discernible logic.

Trump does not need congressional approval to withdraw because the last version of the treaty was never put up to a vote, administration officials said. USA shoppers could see higher bills for foreign goods ordered online.

If the United States can resolve the rate issue within a year, it can easily rescind that notification, a White House official said. But so far, the administration has passed up four opportunities to do so in a report that the administration is required by law to deliver to Congress every six months. "It is, therefore, regrettable that the U.S. has taken this step", the UPU official noted. The U.S. would prefer to stay within the UPU because it provides benefits, he said.

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