US demands dramatic reform of global postal union to avoid pullout

GENEVA: The United States said Tuesday that it was prepared to reconsider its decision to exit the UN agency that sets international postal rates, but only if it undergoes dramatic reform.

President Donald Trump’s administration announced last October that it planned to withdraw from the Universal Postal Union, charging that the current system sets postal rates that unfairly penalise the United States while benefiting carriers in countries like China. Washington, which made its announcement as trade tensions soared with China, said it would leave the UPU in a year unless the agency underwent radical changes.

Speaking before an emergency meeting of the UPU in Geneva, Trump’s hardline trade advisor Peter Navarro said that he had spent the past 11 months “preparing for a possible seamless exit”. But he stressed that he had also worked closely with UPU chief Bishar Hussein and a range of countries in a bid to fix the so-called terminal dues system “that everyone in this room knows is broken.

The agency, which is based in Bern and comprises 192 member countries, sets lower prices for bulky letters and small parcels coming from emerging and developing countries, a group that still includes China. This week’s three-day meeting marks only the third extraordinary congress to be held in the UPU’s 145-year-history. The US and a number of other countries have voiced concerns about the reimbursement received by their postal services for ensuring that such packages sent from abroad are delivered to their final destination, especially in an era of growing e-commerce. Navarro has maintained that under the current system it costs more to send a package from Los Angeles to New York than from Beijing to New York, putting US small businesses and manufacturers at an unfair disadvantage. According to Washington, it costs the US $300-500 million annually under the current system.

That is “very, very real money”, Navarro told several journalists Monday evening. Navarro told Tuesday’s meeting that “there are only two acceptable outcomes” of the talks. Both options involve the US postal service immediately being allowed to charge similar rates for delivering packages from abroad to those it charges for domestic mailers. The US would prefer a system in which all members of the UPU be allowed to “immediately self-declare rates”, he said, but added that Washington was willing to accept a “multi-speed option”, under which other countries could move over to self-declared rates gradually over a five-year period. A number of other countries also spoke out in favour of serious reform Tuesday.