Trump withdraws from postal treaty in new front against China

By MATTHEW CHOI
10/17/2018 10:40 AM EDT
Updated 10/17/2018 11:01 AM EDT

The Trump administration announced Wednesday it will withdraw from a 144-year-old postal treaty, claiming the treaty gives countries like China and Singapore an unfair advantage and floods U.S. markets with cheaper e-commerce packages.

The withdrawal echoes President Donald Trump's history of accusatory rhetoric against China for manipulating trade by subsidizing its manufacturers. Trump volleyed billions of dollars in tariffs with China over the summer, raising concerns of higher domestic manufacturing costs. A senior administration official said Wednesday that the withdrawal from the postal agreement is not related to the tariffs, but the move is aimed at protecting U.S. manufacturers and the U.S. postal system.

The Universal Postal Union, a body of the United Nations, allows developing countries to pay cheaper rates when shipping packages internationally, often leaving some of the cost of delivering packages on the postal services of wealthier countries. The policy was initially intended to spur economic growth in poorer countries by connecting them with global markets.

But now that some of those countries have become exporting giants, the administration hopes to use its withdrawal as leverage to negotiate more favorable terms for historically wealthy countries like the United States. A senior administration official said the administration would prefer to stay within the union and that a full withdrawal takes a year to implement, and he hopes the U.S. can negotiate more favorable terms within that time frame.

“Terminal dues,” or the rates charged by countries receiving packages to finish deliveries within their borders, is not a new issue for the postal service. A 2015 USPS report argued having internationally determined terminal dues that do not match the actual cost of shipping packages causes the USPS to front much of the cost. The report advocated for the United States to set its own rates for shipping incoming packages once on U.S. soil.

A senior White House official said Wednesday that the administration is working in “Trump time” to expediently implement rates that fully cover the cost of shipping for international packages once in the United States. He said the U.S. could be setting its own rates as soon as six months from now.

Sen. Bill Cassidy (R-La.) introduced legislation in April that would have ended the internationally determined differences in terminal dues and praised the Trump administration's Wednesday action. His bill, bluntly called the Ending Needless Delivery Subsidies Act, never made it past the Senate Committee on Foreign Relations, but he said he has been working with the administration for months on the issue.

“President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates,” Cassidy said in a statement.

https://www.politico.com/story/2018/...-treaty-910675