GENEVA, Switzerland, Sept 24 – Diplomats opened an emergency meeting of the UN agency that sets international postal rates on Tuesday, with the US threatening to quit the global body as early as next month.
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 dramatic reform.
But the State Department had stressed that “if negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU.”
This week’s three-day meeting marks only the third extraordinary congress to be held in the UPU’s 145-year-history.
The parties are “working to ensure that the US stays as a member,” spokesman David Dodge told reporters in Geneva last week.
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.
Some other countries have also voiced concerns about the reimbursement, or so-called terminal dues, 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.
Trump’s hardline trade advisor Peter Navarro maintains 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.
“The disparity in the cost of shipping a foreign versus domestic package is … shocking,” he wrote in a Financial Times editorial last year.
Navarro, who is the lead US negotiator in Geneva this week, has argued that the US postal service should be allowed to charge similar rates for delivering packages from abroad to those it charges for domestic mailers.
But it is unclear what impact a US withdrawal from the UPU would have.
eBay at least appears concerned, with its grassroots network recently cautioning that such a move could lead to “increased costs and service disruptions, and global mail delivery could even come to a halt.”
The UPU is not the only multilateral organisation that has rubbed the Trump administration the wrong way.
Trump has also threatened to quit the World Trade Organization and has repeatedly criticised it for allowing China to maintain its developing nation status.
As with the UPU, developing country status provides preferential treatment at the WTO.
It allows governments longer timelines for implementing free trade commitments, as well as the ability to protect some domestic industry and maintain subsidies, which the Trump administration has complained is unfair.