United States targets China on worldwide rates for parcels sent by post service

Donald Trump

Modal Trigger AP

But the threat is the latest sign of U.S. President Donald Trump's go-it-alone approach to many issues, from the environment to trade to the Iran nuclear deal.

The action follows the failure of a US delegation to win a rule change at the September UPU meeting to fully reimburse USPS for the costs of domestic delivery.

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

Under the current UPU system, a one-pound package shipped by a USA business costs between $10 to $13.

Under the treaty, a UN body sets lower worldwide rates for packages from certain countries, a move originally created to support poorer nations. That makes sense. But, insensibly, the union still places China, the world's second-largest economy, in the same category as Bosnia, Botswana, Cuba and other developing countries. While the agreement is meant to give Asian and African countries incentives to develop their economies, China has used the discounted rates so effectively that it now accounts for 60 percent of the packages sent to the U.S.

Mr Pascal Clivaz, the Deputy Director General of the UN UPU, which was established in the 19th Century, recalled the "tremendous and positive contribution" made by the U.S to the agency.

But the United States says the discounts put American businesses at a disadvantage.

The decision to pull out of the agreement was pushed by Trump senior adviser Peter Navarro, who is a long-time advocate of tougher trade measures against China, according to The Times.

American manufacturers trying to sell goods domestically through e-commerce likewise would benefit if subsidies were lifted. Rather, they take issue with Trump's methods. Singapore, for example, and several countries in Europe benefit from this. Beginning under Obama's "pivot to Asia" and accelerated under Trump, the USA has sought to isolate and encircle China by strengthening ties and alliances throughout the Indo-Pacific especially with Japan, Australia and India.

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The postal treaty isn't sexy, but challenging it gets to the root of the problem without all the extra noise.

The U.S. says it's willing to renegotiate.

The postal loophole can be seen in the shipping options offered by Chinese EBay sellers and others on major e-commerce portals.

"The U.S. postal services winds up picking up the tab for that", said the official.

Withdrawing from the postal treaty is an aggressive move but one that looks useful in this case.

Members of the International Mailers Advisory Group, including DHL e-commerce, have advocated for a negotiated solution within the Universal Postal Union.

"If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU", said the White House. Since 1969, poor and developing countries - including China - have been assessed lower rates than have wealthier countries in Europe and North America.

It takes a year to withdraw from the Switzerland-based Union Postal Union. For once, his tendency to play with matches just might pay off.

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