US Dispatches Goodbye Letter to Universal Postal Union

A truck transports a container next to stacked containers at a port in Qingdao in China's eastern Shandong province

A truck transports a container next to stacked containers at a port in Qingdao in China's eastern Shandong province

The manufacturers association boss had sent a letter in April to U.S. Treasury Secretary Steve Mnuchin complaining that the UPU system allows China to receive increasing subsidies from the U.S. Postal Service, which it says cost the USPS $170 million a year ago.

Wednesday's announcement is the latest move by the Trump administration to remove the United States from multi-lateral organizations and agreements that it believes disadvantage the country.

In August, a White House memorandum to the Secretary of State and other top officials said that under the UPU, the U.S. is often "not fully reimbursed by the foreign postal operator" for delivering foreign-origin items "which can result in substantial preferences for foreign mailers relative to domestic mailers".

The UPU treaty gives lower mailing rates to poorer countries, including China, which Trump and other critics say has let China flood the USA with dirt-cheap electronics and other goods, often sold online for rock-bottom prices with shipping included.

That lets Chinese vendors unfairly compete with US vendors who have to pay ordinary USA shipping rates to get their goods to customers, Trump argued in an August memorandum.

The move to withdraw from the UPU, now a part of the United Nations family of organizations, is the latest one by Trump against the established global multilateral system of treaties and agreements the USA president blames for undermining American competitiveness.

Under the union's framework it takes a year for a country to withdraw, during which rates can be renegotiated.

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".

The move comes as the USA has imposed tariffs on $250 billion in Chinese goods and Beijing has retaliated by targeting $110 billion in US products.

The U.S. and China are already locked in a trade war. A 1-pound package that costs the USPS about $10 to deliver can be mailed from China for just $2.50, per White House numbers.

In a Treasury Department report issued Wednesday, no country was identified as meeting the criteria to be labeled a currency manipulator but six nations - China, Germany, India, Japan, South Korea and Switzerland - remained on a watch list subjecting them to added US pressure to lower trade surpluses.

The "system creates winners and losers", the report's author's concluded, especially China's national postal service and "Chinese online retailers in the lightweight, low-value package segment at the expense of the U.S. Postal Service and American retailers".

US manufacturers applauded the move. The fact is, through the bilateral trade agreement with the United States, you know how much benefit American consumers have got with trade with China over the years and how much money American companies have made from operating in China. "All parties should pay the same parcel delivery rates for the same services from the U.S. Postal Service, regardless of whether the country of origin is foreign or domestic".

"Something has to be done", he said.

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