BERN, Switzerland — The Universal Postal Union said it has begun taking steps to fix the shipping policies that U.S. President Donald Trump’s administration asserted undercut American businesses.
The action came within days of the Trump administration giving notice it intends to withdraw next year from the 144-year-old international organization based in the Swiss capital that underpins the global postal system.
Trump objected to the “terminal dues” that postal services pay around the world to reimburse countries for international mail deliveries. He said the dues, based on rates set by the UPU, provide an unfair advantage to China and developing nations.
The U.S. plan to withdraw is “a matter that many members are also talking about as it is unprecedented and sensitive,” the UPU’s Director-General Bishar A. Hussein said in a speech to its 41-nation administrative council meeting in Bern this past week.
He said it “came to us as a surprise and I have been engaging the U.S. delegation over the matter.” He also wrote the U.S. government, he said, seeking “an audience” and further discussions.
Trump’s announcement was hardly surprising. He announced in an August memo that he wanted the UPU to raise prices on shipping costs for small parcels sent from China and developing nations, and warned that he would “consider taking any appropriate actions” if the UPU did not comply.
Wealthier nations pay more than developing countries on such fees under the UPU’s rules. The fees are an important source of revenue for many of the UPU’s 192 member countries. But they are yet another feature to be challenged by the Trump administration with its “America First” agenda.
Given Trump’s proclivity for upending the order of international organizations and treaties, it stood to reason he might threaten to order a U.S. withdrawal from the UPU to try to strike a better deal.
— Universal Postal Union (@UPU_UN) October 25, 2018
Little action so far
Trump’s memo came little more than a week before the UPU’s “Extraordinary Congress,” only the second such gathering in its history. The Congress drew 1,000 participants who were seeking ways of adapting to the 21st century world of email, text messages, online shopping and private delivery.
The special meeting decided not to make any changes in the terminal dues but to return to the issue at its next regular Congress in 2020.
The U.S. Postal Service collects terminal dues, or below-cost payments, on deliveries of small packages weighing less than 4.4 pounds sent from international shippers. Manufacturers complain Chinese counterfeiters take advantage of the payments by using online shopping to promote and deliver cheap goods to Americans. Previous U.S. administrations have raised similar concerns.
“The anticompetitive nature of the Universal Postal Union has concerned the U.S. government since the Reagan administration,” said Robert Taub, head the U.S. Postal Regulatory Commission. “The increasingly competitive and commercial nature of the market has exacerbated these long-standing distortions. Yet, little has changed at the UPU.”
Taub’s statement in August, issued a day after Trump’s memo, asserted the UPU-determined rates and agreements “require posts to undercharge for delivery of inbound mail, to insulate postal shipments from full application of national customs laws, and to promote a different legal regime for postal operators and competing private carriers.”
Shortly after the UPU received the U.S. notice of withdrawal, the organization’s deputy director-general, Pascal Clivaz, said the United States, one of UPU’s founding members, has made “a tremendous positive contribution” to the international organization since its establishment in 1874. The UPU became part of the United Nations system in 1948.
“It is therefore regrettable that the U.S. has taken this step,” he said. “We, however, respect the decision because we believe it was taken [out] of a careful consideration and reflection.”
The way forward
At the UPU’s administrative council meeting last week, Hussein said the organization was doing everything possible to overhaul the rates. He said members agreed to fast-track consideration of a new proposal so that it could be put to a vote at a spring gathering.
Hussein intended to meet with the U.S. delegation and discuss the Trump administration’s decision to withdraw from the UPU, which would become effective in the fall of 2019, a year from October 17, the day the international organization received the administration’s notice of intent.
The UPU now hopes to reach a negotiated agreement among its member nations by April 2019 that “will help mitigate the situation” with the Trump administration, Hussein said, but that also will depend on how China and other countries might benefit.
“I would urge the U.S. and all members to exercise flexibility while discussing this matter,” he said.