Trump exits pact offering cheap foreign postal deliveries

US President Donald Trump is distancing the US from international multilateral organisations and accompanying policies that he says hurt US interests. PHOTO: REUTERS

WASHINGTON • The Trump administration will begin withdrawing from a United Nations pact that offered low rates for foreign postal deliveries of small packages in the United States, the latest move to challenge practices it sees as unfairly advantageous to China.

White House officials said on Wednesday that the US would start the process of leaving the Universal Postal Union (UPU), a Switzerland-based organisation that connects postal services worldwide.

The White House said the UPU enables foreign postal services to take advantage of cheap shipments to the US, creating an unfair cost advantage over US companies that ship goods, and hurting the US Postal Service.

Shares of Internet-based mailing and shipping provider fell nearly 9 per cent after the announcement.

Online shoppers in the US have often benefited from the arrangement, gaining access to foreign goods at little cost.

US President Donald Trump is distancing the US from international multilateral organisations and accompanying policies that he says hurt US interests.

He has announced the US' withdrawal from the Paris Agreement to mitigate climate change and an international deal with Iran to curb Teheran's nuclear programme.

The White House will seek to renegotiate the terms of the UPU rules during the year-long withdrawal process, officials said.

"If negotiations are successful, the administration is prepared to rescind the notice of withdrawal and remain in the UPU," White House spokesman Sarah Sanders said in a statement.

China's Foreign Ministry spokesman Lu Kang said that China regretted the US decision to pull out of the UPU, adding that the pact has had a positive effect on trade and communications.

China's consistent position was to safeguard multilateralism and it would continue to participate in and support the work of the union, he told a regular news briefing.

UPU director-general Bishar Hussein said he would seek meetings with US officials to discuss the matter. "The UPU remains committed to attainment of the noble aims of international collaboration by working with all its 192 member countries to ensure that the treaty best serves everyone," he said in a statement.

One senior White House official said the treaty's "subsidy" had facilitated the transfer of a high level of counterfeit goods and the narcotic and fentanyl trade.

Another official said the system allowed for a 40 per cent to 70 per cent discount on small packages arriving in the US from China compared with what it would cost to send them domestically, costing US$300 million (S$413 million). The official described it as an economic distortion that the administration wanted to correct.

A change could benefit US merchants and shippers, including, which have called on US officials for years to address foreign postal services' access to low rates.


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A version of this article appeared in the print edition of The Straits Times on October 19, 2018, with the headline Trump exits pact offering cheap foreign postal deliveries. Subscribe