Universal Postal Union Reaches Deal on Rates, Averts Exit by US

September 25, 2019 Updated: September 26, 2019

The Universal Postal Union (UPU) reached a unanimous agreement on international shipping rates on Sept. 25, avoiding an exit from the union by the United States.

The 192 member nations voted to approve changes to price rates on bulky letters and small parcels shipped internationally. Under the new system, countries can declare their own rates as soon as July 2020.

The United States threatened to quit the union in 2018 due to extraordinarily low shipping rates provided to China. The prices in question are called remuneration rates and deal with prices charged by a country to execute the last leg of a journey for international packages arriving at its ports of entry.

Under the old system, a merchant in the United States shipping a package domestically paid four times the price charged to Chinese merchants shipping goods from China to the United States.

While many nations have complained about skewed remuneration rates for years, the United States under President Donald Trump became the first to announce its exit from the union in protest.

“The UPU is as strong as it has always been,” UPU Secretary-General Bishar Hussein said during a press conference. “Today is a historical moment, where we have averted the possible exit of one of our member countries and, of course, many other disappointed countries.”

The UPU decision is a win for the U.S. delegation led by Director for Trade and Manufacturing Policy Peter Navarro. In an op-ed penned days prior, Navarro was adamant about quitting the union if China’s unfair advantage wasn’t addressed.

“Today a White House team working closely with the director-general of the Universal Postal Union, and a broad coalition of friends and allies in the UPU has more than achieved the president’s goal,” Navarro said at a press conference.

U.S. companies have long complained about Chinese merchants who produce counterfeits overseas and ship them at an advantageous rate to U.S. consumers. With the new rates in effect, products such as USB sticks, which cost $0.75 (with shipping from China included) are likely to begin vanishing from eBay and other online marketplaces.

The new rate decision doesn’t affect developing nations with low shipping volumes. China doesn’t fit into that category.

Hussein had previously described the summit on remuneration rates as the most important in the UPU’s 145-year history.

“This is a landmark decision for multilateralism and the Union. The Geneva Extraordinary Congress has shown that 192 countries can reach solutions on complex issues by acclamation,” said UPU Director for Policy, Regulation, and Markets Siva Somasundram.

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