US battles China at Universal Postal Union, threatens to quit

The Universal Postal Union (UPU) is starting crisis talks in Geneva today after the U.S. said it would withdraw its membership from the 145 year-old body unless the rules are changed to counter China’s preferential treatment.

This latest chapter in the trade spat between the world’s two biggest economies centres on China’s classification as a developing country in the global postage system.

The UPU regulates postage rates. Countries that mail is sent from pay transport fees to destination countries, but developing countries pay significantly lower rates than industrialised ones.

In light of the booming business of Chinese online vendors, who ship to Western customers, Washington argues that the U.S. Postal Service is effectively subsidising traders in China.

The U.S., therefore, demands that it be allowed to set its own rates for the fees it charges other countries.

If no compromise is found in the talks among the 192 UPU member countries until Thursday, Washington plans to pull out from the 145-year-old organisation.

Trump’s complaint centres on the reimbursement that the U.S. Postal Service receives for providing final deliveries of bulky letters and small parcels sent from abroad — usually ones not weighing more than 2 kilograms (about 4½ pounds). Such mail can include high-value items like mobile phones, memory sticks or pharmaceuticals.

“For consumers, the issue has largely been overlooked”, reported AP.

“Whatever happens, prices to ship via the postal network … It’s going to cost more,” said Kate Muth, executive director of the International Mailers Advisory Group, which counts companies like eBay, DHL, Amazon AMZN, USPS or their affiliates as members.

“The rates are going to go up,” he said.

Under President Donald Trump, the U.S. has already withdrawn from the UN Educational, Scientific and Cultural Organisation (UNESCO) and the UN Human Rights Council.

The U.S. is also threatening to leave the World Trade Organisation (WTO).