Unfair trade, says USA pulling out of Universal Postal Union


Pascal Clivaz, deputy director-general of the Switzerland-based Universal Postal Union, says the agency reached out quickly to U.S. officials after receiving a letter from U.S. Secretary of State Mike Pompeo this week announcing Washington's plan to pull out of the union in a year if the treaty isn't renegotiated.

The Trump administration is moving to pull out of the Universal Postal Union (UPU), a 144-year-old worldwide treaty organization that sets rates for sending mail between different countries.

But the United States says the discounts put American businesses at a disadvantage. The White House said in a statement that the U.S. State Department would give notice of its intent to pull out of the postal union Wednesday, but the parties involved would still have a year to negotiate before it's a done deal.

"That's costing us about $300 million per year in, in the United States and that's what we're trying to fix", the official said.

The move looks likely to exacerbate the ongoing economic conflict with Beijing.

Because of the postal treaty, shipping the goods directly to consumers was relatively affordable.

"We regret the U.S. decision to withdraw from the Universal Postal Union", Lu told reporters at a daily press briefing.

"This outdated arrangement contributes significantly to the flood of counterfeit goods and unsafe drugs that enter the country from China", said National Association of Manufacturers (NAM) President and CEO Jay Timmons in a statement supporting the move. But the impact of the trade war on Chinese stocks was "more psychological than real", he said.

Unnamed U.S. officials told Bloomberg News on Wednesday that Trump "sought to revise the treaty in September and was rebuffed by other nations, prompting the decision to withdraw".

News of a potential meeting between Xi and Trump comes amid growing hostilities between U.S. and China on a range of issues other than the trade war, including the South China Sea, Taiwan, Xinjiang and allegations of espionage.

United States manufacturers applauded the move.

"That said, the USA administration's decision to serve notice on a possible UPU withdrawal highlights the importance of ensuring that global governance systems are modernised in line with the realities of today's economy".

Singapore and European countries also benefit from the arrangement.

Second, the questionable means adopted by China to make such rapid progress have aroused American suspicions over Beijing's geopolitical ambitions.

The UPU, which consists of 192 members and is located in Switzerland, sets shipping rates for global mail in a way that guarantees lower prices for shipments from developing economies and higher rates for those from advanced economies. This goal is to force China to adopt the rules of a normal market economy. It also comes amid an escalating trade dispute between Beijing and Washington that has resulted in US imposition of tariffs on about $250 billion worth of Chinese goods and the Chinese retaliating with similar punitive taxes on about $110 billion in American products.