Trump launches the process of resignation from a 144-year-old postal treaty

Copyright of the image
Getty Images

The United States has announced its intention to withdraw from a 144-year-old postal treaty, which, according to the White House, would allow China to ship goods at unjustly low prices.

The UN treaty sets lower international rates for parcels in some countries, a measure initially designed to help the poorest countries.

But the US says the rebates are hurting US companies.

Officials said they hoped the withdrawal notice would pave the way for a better deal.

"We are looking for a fair system," a senior administration official told reporters.

"We hope that we will eventually end up with a negotiated outcome."

The treaty sets limits on packages of less than 2 kg (4.4 lb.), but the US wants to change it to allow countries to set their own rates for these smaller packages, as they can parcels exceeding this limit, said officials.

The surge in international online shopping has resulted in an increase in the number of small parcels sent via the postal system. US companies say it can now cost more to send an article to the United States than to send a similar article from Shanghai to the United States. .

Post Office Strain

The attempt to revise the treaty is part of the "America-first" combative approach of US President Donald Trump, which has led to tariffs on billions of dollars worth of goods, to attacks on existing trade treaties and criticism of multilateral agreements.

He has often distinguished China, which exports billions of products each year to the United States.

Officials said the rebates weighed on the finances of the US postal service, facilitated the shipping of counterfeit products and distorted prices in the US, leading to higher fees for domestic companies.

Because of lower rates, foreign packages cost about US $ 300 million a year in the United States, according to estimates by the administration.

Copyright of the image
Getty Images

The rates for international shipments are governed by the Universal Postal Union, a United Nations unit dating back to the 1870s.

The United States is worried about how the organization sets the rates that postal operators in different countries charge each other for the processing of foreign mail.

The lowest rates are designed to help the poorest countries manage costs.

But the White House said China – a major global exporter – was now the main beneficiary of the system.

The withdrawal of the postal treaty does not take effect for at least one year, which opens the way for discussions that could renegotiate its terms.

The price is increasing

In addition, the United States will begin a process of national postal rate review, which could enter into force in six months, officials said.

This change is expected to increase the cost of shipping parcels from China by 40% to 70%, officials said.

While this may increase shipping costs for consumers buying products from China, officials said these costs were outweighed by the benefits of ending the "economic distortion."

US postal services and companies such as Amazon and FedEx have complained of discounts offered to foreign shippers – officially called terminal dues – for many years.

The Universal Postal Union had already begun to change the rates, which are set every four years, in response to the concerns expressed. "All countries, with the exception of the least developed countries", should face the same rates by 2021, according to a 2017 US government report on the issue.