US exit from global post union could signal the end of cheap Chinese goods for American online shoppers
- Last year, the US said it would leave the Universal Postal Union (UPU) and set its own postal rates, claiming that the system is unfairly advantageous to China
- The Switzerland-based union represents 192 member countries and sets the fees that postal services can charge for delivering shipments from foreign countries
An exit by the United States from a 145 year-old international postal union could deny US-based customers access to cheap Chinese-made products as Washington continues to raise the stakes in its trade dispute with Beijing.
The Switzerland-based Universal Postal Union (UPU), which represents 192 member countries, is responsible for setting the fees that postal services can charge for delivering shipments from foreign countries.
But on Tuesday at its meeting in Geneva, UPU members rejected the US’s proposal to immediately start charging foreign shippers the same rate that domestic small and medium-sized shippers have to pay. Another US proposal to allow it to phase in rate increases will face a vote on Wednesday, and if it is also rejected, the United States Postal Service will leave the UPU.
Under the UPU’s “terminal dues” system, fees that post offices charge each other for the delivery of international letters and packages, developing countries – a group that includes China – pay less to foreign carriers for delivering their overseas mail than do their developed counterparts.
As China is considered a developing country, it gets much lower rates. So what the US is really challenging is this developing country classification of China
“Low costs in China is only one reason. Another major reason is the terminal dues system of the UPU, which fixes the postage rates artificially by classifying countries into different groups,” said Henry Gao, associate professor of law at Singapore Management University and a long time researcher on international trade pacts.