USA announces withdrawal from UN's Universal Postal Union

USA announces withdrawal from UN's Universal Postal Union

In August, a White House memorandum to the Secretary of State and other top officials said that under the UPU, the USA is often "not fully reimbursed by the foreign postal operator" for delivering foreign-origin items "which can result in substantial preferences for foreign mailers relative to domestic mailers".

During the one-year process of withdrawing from the UPU, the Department of State "will seek to negotiate bilateral and multilateral agreements" that resolve "problems" described in the August 23 presidential memorandum signed by President Donald J. Trump titled "Modernizing the Monetary Reimbursement Model for the Delivery of Goods Through the International Postal System and Enhancing the Security and Safety of International Mail". The White House, in a statement, said "sufficient progress has not been made on reforming terms" of the postal treaty and that it would begin the withdrawal process while seeking to "negotiate bilateral and multilateral agreements that resolve the problems".

The United States formally moved on Wednesday to withdraw from one of the oldest global organizations in a bid to lower rates for foreign postal deliveries of small packages in the United States.

Current shipping rates will continue in force as it takes a year for a country to withdraw from the agreement.

The move will most likely inflame tensions with China, which the administration has accused of unfair trade practices and punished with tariffs on $250 billion worth of Chinese goods, investment restrictions and other measures.

President Donald Trump plans to withdraw the USA from a 192-nation treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, another escalation of his economic confrontation of Beijing.

The action by the White House has been attributed by many sources as a response to UPU rates favoring other countries, with China singled out most frequently.

"China Post gets a larger discount on deliveries of inbound packages than Singapore or industrialised countries, so it is easy to use China as an example to stand for the whole problem".

More news: Are the Houston Astros doing baseball version of SpyGate?

While the US dollar has strengthened along with the entire domestic economy - which grew at a rate of 3.2 percent over the first half of 2018 - China's renminbi, also known as the yuan, has continued to fall in value.

Trump administration officials say the leg up, granted under a 1969 provision, was meant to promote growth in poor countries.

Officials stressed that the goal is not to leave the UPU, even as they announced Trump's intention to withdraw from the treaty. A 1-pound package that costs the USPS about $10 to deliver can be mailed from China for just $2.50, per White House numbers.

The "system creates winners and losers", the report's author's concluded, especially China's national postal service and "Chinese online retailers in the lightweight, low-value package segment at the expense of the U.S. Postal Service and American retailers".

Giving an example, the official said a one-pound package costs domestically about $10 to $13 for a U.S. business or manufacturer to send, whereas the Chinese mailer, for the last mile, and same distance, one would reimburse about $2.50.

"Threats to withdraw may in fact be counterproductive", she said, "as US allies may prefer a more consensus-seeking approach".

The president argues the USA loses as much as $800 billion in cash going to China every year as a result of the trade imbalance between the two countries.

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