China ‘regrets’ America’s departure from Universal Postal Union

Beijing will continue working ‘to make our contribution to the development of the global postal service’, says foreign ministry; White House says the system allows developing countries like China to ship goods around the world more cheaply and put American firms at a disadvantage

PUBLISHED : Thursday, 18 October, 2018, 10:31pm
UPDATED : Friday, 19 October, 2018, 2:57am

China has said it regrets the United States’ decision to withdraw from the Universal Postal Union (UPU), in a move some analysts said is further evidence of Washington trying to curtail Beijing’s power.

The White House said on Wednesday it planned to leave the 144-year old international postal alliance, which it described as a “flawed system” that allowed developing countries like China to ship goods around the world more cheaply and put American firms at a disadvantage.

“We regret the US’ decision to withdraw from the Universal Postal Union,” foreign ministry spokesman Lu Kang told a regular press briefing in Beijing on Thursday.

“China has been calling for and upholding multilateralism and actively supporting the UPU,” he said. “We will continue working with all sides to make our contribution to the development of the global postal service.”

Zhang Baohui, a professor of political science at Lingnan University in Hong Kong, said that America’s departure from the UPU was part of US President Donald Trump’s strategy for the “all-out containment” of China but its significance, in comparison to the damage caused by US tariffs on Chinese imports, would be limited.

US consumers are considerable buyers of cross-border e-commerce and they could face somewhat higher prices on goods imported via postal shipment
Bruno Basalisco, economist at Copenhagen Economics

“This won’t affect China’s e-commerce companies a lot because their principal business is domestic,” he said. “I don’t think it’s that important at all, but it shows that Trump is obsessed with China’s power and will do anything to limit it.”

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Bruno Basalisco, a specialist in digital and postal commerce at Danish consultancy Copenhagen Economics, disagreed, saying that any increase in postal rates would hit smaller Chinese e-retailers.

“US consumers are considerable buyers of cross-border e-commerce and they could face somewhat higher prices on goods imported via postal shipment,” he said.

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Meanwhile, Zhao Quansheng, director of the Centre for Asian Studies at American University in Washington, said the US’ decision might have nothing to do with China.

“Quitting this type of international group … is not necessarily targeted at China,” he said. “The aim is to change and revamp [global governance].”

Now under the control of the United Nations, the UPU is headquartered in Bern, Switzerland, and represents 192 member countries. Set up in 1874, it created the rules for international mail exchanges, including setting the fees that postal services can charge for delivering shipments from foreign carriers.

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While Washington’s motives for quitting the agency are uncertain, the US has already turned its back on other global organisations and agreements, including the Trans-Pacific Partnership and the Paris climate agreement, in the name of putting “America first”.

Under the UPU’s “terminal dues” system, developing countries – a group that includes China – pay less to foreign carriers for delivering their overseas mail than their “developed” counterparts.

As a result, it can cost more to send a small package – weighing less than 2kg (4.4lbs) – from one American state to another, than from China to the US.

The US Postal Service said that in 2016 it lost more than US$135 million handling foreign mail.

Washington said that on its departure from the UPU it would introduce its own rates for the handling of international shipments by “no later than January 1, 2020”. The withdrawal process is expected to take a year, it said.

Jim Campbell, a lawyer and consultant on postal issues, said the main problem with the UPU was that its pricing system did not reflect the massive rise in international e-commerce.

“The low terminal dues rates have always been unfair and distortive, but the rise of e-commerce has … hurt merchants and created serious political problems in industrialised countries,” he said.

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China is “now the largest source of e-commerce postal packages sent to the US”, Campbell said.

“China Post gets a larger discount on deliveries of inbound packages than Singapore or industrialised countries, so it is easy to use China as an example to stand for the whole problem.”