Trump pulling out of pact that discounted foreign postal deliveries

Trump pulling out of pact that discounted foreign postal deliveries

The report noted that sufficient progress has not been made on reforming terms of the Acts of the Universal Postal Union (UPU) in line with the policies of the United States outlined in the Memorandum. 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.

The White House said the UPU enables foreign postal services to take advantage of cheap shipments to the United States, creating an unfair cost advantage over US companies that ship goods, and hurting the US Postal Service. Online shoppers in the United States have often benefited from the arrangement, gaining access to foreign goods at little cost.

"President Donald J. Trump received a report from the Department of State pursuant to the August 23, 2018, Presidential Memorandum on "Modernizing the Monetary Reimbursement Model for the Delivery of Goods Through the International Postal System and Enhancing the Security and Safety of International Mail".

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.

Trump has also withdrawn the U.S. from UNESCO and the United Nations Human Rights Council and pulled USA funding for the UN agency for Palestinian refugees.

White House officials said the move is not aimed at China specifically, noting that certain European countries such as Germany and France also benefit from what they called unfair global postal rates. "If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU". Officials said it is cheaper to ship certain packages to the USA from overseas than it is to send them domestically.

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USA officials say the growth of transactions on the internet is facilitating a high level of counterfeit goods shipped to the US, as well as narcotics and fentanyl, with the aid of the lower shipping costs. Chinese companies take advantage of the lower rate to ship packages into the USA for cheap, allowing for as much as a 70 percent discount on small packages arriving from the country, according to officials.

Officials said a number of countries were benefitting at America's expense, especially China, with which the US has been engaged in a protracted trade war under the current administration.

The subsidy cost the U.S. Postal Service $170 million last year, according to NAM, a figure it says is growing at a rate of almost 40 percent each year.

FedEx Corp. declined to comment.

The move was welcomed by the U.S National Association of Manufacturers, which called the exiting postal pact "outdated" in the age of e-commerce and at a time of Chinese manufacturing dominance.

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