US plans exit from UN postal treaty, citing illicit trade

The Trump Administration has started the process of withdrawing the US from a United Nations treaty that it says leaves the country vulnerable to counterfeit goods and other illicit trade.

Pulling out of the Universal Postal Union (UPU), which provides for low rates for postal deliveries of small packages, will also remove what it says is a competitive advantage to Chinese manufacturers that undermines American companies and hurts the US Postal Service, says the White House.

It’s set a one-year timeframe for withdrawing fully from the treaty and in the meantime will use that time to see if it can negotiate better terms. Officials said the subsidies – which they estimate could be as much as 40% to 70% on small packages from China compared to domestic shipments – have made it easier for counterfeits and illicit drugs such as fentanyl reaching the US market.

The deputy director general of Berne, Switzerland-based UPU, Pascal Clivaz said the US’s decision was “regrettable” and that he hoped the US would meet with the organisation and “resolve this issue to everyone’s satisfaction.”

Established in 1874, the UPU encourages cooperation between postal services around the world, setting rules for international mail exchanges and determining the rates its 192 member countries charge to deliver mail and small parcels from foreign carriers.

Companies such as Amazon have long argued that it gives Chinese companies shipping clothing, electronics and other consumer goods an advantage over their US counterparts.

National Association of Manufacturers (NAM) President and CEO Jay Timmons released the following statement on the White House’s announcement:

“President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-US manufacturer subsidy China receives from the US Postal Service.

“This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China. Manufacturers and manufacturing workers in the US will greatly benefit from a modernized and far more fair arrangement with China.”