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Universal Postal Union official says US withdrawal serious, but can be resolved

22 October 2018

Contrary to Trump's claim, China has large stockpiles of ammunition to be used in the ongoing trade war. This is especially true since 2010, when the US Postal Service entered an agreement with eBay Greater China & Southeast Asia and the China Post Express & Logistics Corporation.

But the U.S. says the discounts put American businesses at a disadvantage.

The decision to withdraw was made at the urging of Peter Navarro, Trump's trade adviser, who sees the move as a way to thwart China and an opportunity to challenge the authority of global groups, like the World Trade Organization, that, in his view, fail to give the United States voting powers commensurate with the country's economic stature.

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Called the Universal Postal Union, the treaty - first developed in 1874 - allows some countries to ship their goods into the USA for a discount at the expense of the Postal Service - which has been bleeding red ink for years - and US manufacturers. "All parties should pay the same parcel delivery rates for the same services from the US Postal Service". Lower rates are created to help poorer countries manage the costs. According to another senior administration official, there are 40 to 70 per cent discounts on packages from China to the United States compared to what it would be to send them domestically. The withdrawal process would take a year. Last month, a United States interagency delegation travelled to Ethiopia, where the UN Universal Postal Union meeting was taking place and demanded revision in the system. The United States was one of the original treaty signatories and has been a member throughout the UPU's 144-year history.

According to UPU, the official notification on Wednesday, from US Secretary of State Mike Pompeo, said that the withdrawal "shall be effective one year after the day on which [the UPU receives] this notice". 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.

But the provision also allows Chinese producers to ship items to the USA at significantly low rates even compared to some U.S. domestic shipping rates.

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The Treasury Department report said the administration will closely monitor the recent depreciation of Beijing's currency, which it said will likely worsen America's trade deficit with China. While this strong activity proceeds on the worldwide stage, back home multiple agencies will be undertaking an intense effort to help the American innovators who have been displaced from online marketplaces by counterfeiters by adopting fair and nondiscriminatory rates for global shipments. Cunnane has been pushing for a reduction in the U.S. Customs de minimus, which now waives paperwork and duty collection on shipments valued under $800.

Clivaz acknowledged the USA concerns about China were at the root of the problem, but said agreements within the UPU since 2016 have moved toward "improving the issue with China".

Meanwhile, Zhao Quansheng, director of the Centre for Asian Studies at American University in Washington, said the US' decision might have nothing to do with China.

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Universal Postal Union official says US withdrawal serious, but can be resolved