US global postal rate deal will have limited impact on Chinese exporters, observers say

The United States will be allowed to set its own rates for inbound international letters and small packages starting in June 2020

But observers say the new rates will have less impact on China than Washington had envisioned

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The United States will be able to rise prices for letters and small parcels from July next year after reaching a compromise on Wednesday with members of the Switzerland-based Universal Postal Union. Photo: Kyodo

Published: 5:43pm, 26 Sep 2019Updated: 3:18pm, 27 Sep 2019

A deal struck between the United States and a global postal union that will allow Washington to set its own postal rates for parcels from abroad will have less impact on China than the Trump administration hoped for, observers said.

The US will be able to raise prices for letters and small parcels from July next year after reaching a compromise on Wednesday with members of the Switzerland-based Universal Postal Union (UPU), which represents 192 member countries and is responsible for setting international postal fees.

The White House had threatened to pull out of the union unless it reformed its fee structure, which Washington claimed gave countries like China an advantage and threatened US jobs.

Under the union’s “terminal dues” system, developing countries – including China – pay less for the international delivery of packages under 4.4 pounds than developed nations.

Chinese exporters are not affected at all because this has no impact on regular ocean freight or air freight, only on individual parcel shipments

Fredrik Gronkvist

Wednesday’s agreement will allow the US to set their own fees - or “self declare” in UPU parlance - from July 2020. Other countries that receive more than 75,000 metric tonnes of mail annually can begin phasing in higher rates in January 2021.