GENEVA — The United States said it will remain in the U.N. postal agency after delegates at an emergency meeting on Wednesday agreed to a compromise plan to change international delivery rates that will add consumer costs.
The Universal Postal Union was holding only the third Extraordinary Congress in its nearly 145-year history this week to consider a demand by U.S. President Donald Trump’s administration to overhaul the fees that countries sending packages must pay to countries receiving packages.
“With this new agreement, the United States will remain a member of the UPU,” U.S. White House trade adviser Peter Navarro, head of the American delegation, said in a statement.
UPU’s secretary general, Bishar Hussein told reporters after the vote that its Congress’ consensus vote to adopt the compromise plan represented “an historical moment, where we have averted the possible exit of one of our member countries and, of course, many other disappointed countries.”
The postal remuneration system applies to the costs of handling, transporting and delivering bulky letters and small packets across borders. UPU, which coordinates mail among 192 member nations and territories, has long tried to make the system fairer, according to Hussein. But the issue has taken on added importance in the era of e-commerce.
The agency said the decision, approved by acclamation on the second day of the three-day Geneva meeting, will accelerate rate increases for paying the costs of delivering inbound, international bulky letters and small packets, by phasing in “self-declared rates.”
Under the compromise plan, known as “Option V,” nations that import a high volume of mail and packages can begin imposing self-declared rates for distributing foreign mail starting on January 1, 2021, and phase in the new fees over five years.
Member nations that meet certain requirements, such as those with inbound letter-post volumes in excess of 75,000 metric tons based on 2018 data, would be able to impose their self-declare rates starting on July 1, 2020. That notably includes the United States.
The changes will effectively raise the costs for Americans and other global consumers of parcel deliveries imported from China and developing economies. UPU said the decision, however, includes some limits to protect low-volume, developing economies from the impacts of the swift reform.
Just a day earlier, the Bern, Switzerland-based UPU narrowly voted in a secret ballot to reject the Trump administration’s preferred “Option B” that would have allowed all UPU member nations to immediately self-declare rates.
Very significant for the future of e-commerce that the UPU has reached a compromise that keeps the US in the system. This keeps the multilateral postal system intact and helps update it for the digital age. pic.twitter.com/tiCHR1mZOt
— Julian Braithwaite (@JulianWTO_UN) September 25, 2019
Overshadowing UPU’s Congress was the Trump administration’s threat last year that without a compromise plan, the United States would withdraw from the October 9, 1874 treaty that is the basis for the international organization. That threat has now ended, according to Navarro.
Ironically, it was a U.S. politician and lawyer from Maryland, Montgomery Blair, who first called for an 1863 Paris conference to form an international postal agreement. Blair was serving as the U.S. postmaster general in the Lincoln administration during America’s Civil War. The Paris agreement led, just over a decade later, to the Swiss-brokered Treaty of Bern, which called for creating UPU.
“Instead of leaving the UPU, as we were more than prepared to do, we will leave Geneva having demonstrated a new brand of Trumpian diplomacy,” Navarro said. “That diplomacy is based on one simple principle: international organizations like the UPU must respect the rights of the United States and serve their members rather than be used as piggy banks for bad actor countries that seek to bend their rules.”
He was referring to the widespread complaint among U.S. businesses that inbound packages from China and other countries enjoy lower remuneration rates than what domestic shippers pay. The U.S. Postal Service, he said, has been spending US$300 million to US$500 million to subsidize deliveries imported from China.
The new compromise plan “provides the United States with the ability to immediately self-declare its postal rates and thereby cover its costs — the linchpin of President Trump’s objectives,” said Navarro.
It also will “transform an antiquated, discriminatory system into a modern and resilient one far more prepared to meet the new demands of e-commerce and the increasing challenges of counterfeit goods and drugs such as fentanyl now moving like poison through the international mail system,” he said.
Peter Yeo, a senior vice president at the United Nations Foundation, said in an op-ed article last week that the UPU-administered system affects “every American business that ships small packages overseas, every American living abroad, and anyone with a stake in stopping the illicit opioid trade.”
A U.S. withdrawal from the UPU would have weakened America’s ability to stem the flow of illicit opioids into the country, according to Yeo. More than US$800 million in opioids were shipped from China to the U.S. over two years, according to the U.S. Senate Homeland Security Committee.
U.S. authorities have been leveraging UPU to exchange electronic data among 80 nations, so customs authorities can better monitor and screen high-risk packages. A new U.S. law requires applying such data to all incoming packages by 2021, but that would not have been possible if the U.S. had left UPU.