US claims victory over international postage reform

Global Business

The United Nations body for international postage said it’s been saved from collapse after an emergency meeting to stop the U.S. pulling out.

The Universal Postal Union voted to reform the fees countries pay to handle each other’s mail.

The Trump administration had demanded changes after complaining about developing countries were undercutting the U.S. with cheaper rates.

And it may be one of the least known parts of the U.N.

But the fate of the Universal Postal Union at that extraordinary congress in Geneva was critical. CGTN’s Owen Fairclough explains why.

I’m one one of those old fashioned types that still uses snail mail. And if it’s quaint, it’s also not cheap compared to pinging a quick text message.

It costs more than a dollar per stamp here in the U.S to send a postcard back to my parents in England.

And it’s the cost of international postage that’s opened up another front in the U.S. – China trade war.

An agreement on how countries pay each other to process international mail – known as terminal dues – has existed since 1874.

But U.S. President Donald Trump is threatening to withdraw from membership of the Universal Postal Union.

The terminal dues countries receive for processing each other’s post are different – and lower for less developed countries.

Trump said China’s discounted rate is hurting the U.S. Postal Service. That didn’t matter so much when letters formed the vast bulk of mail.

The problem is current terminal dues don’t distinguish between flat letters and packages.

And, the rise of e-commerce means U-S consumers are buying more and more packages from Asian countries where terminal dues are lower.

So China-based companies currently pay less to send a small package to New York than it costs a U.S. manufacturer to send it from Los Angeles to the Big Apple.

U.S. companies complain this arrangement is putting them out of business, while the Trump administration said drug smugglers are using the postal service to flood the U.S. with illicit opioids cheaply.

To level the field, the postal union has voted to allow the U.S. to set its own terminal dues from next year and other members in 2021.

And while compromise may have saved nearly 150 years of international cooperation, but the Universal Postal Union said it will mean higher prices for consumers.

Ross Marchand talks about the US postal service and its decision to renew with the Global postal union

CGTN’s Rachelle Akuffo spoke to Ross Marchand, policy director for the Taxpayers Protection Alliance about the US decision to renew its membership with the Global postal union.