U.S. near deadline for exiting postal group

GENEVA — The effects of the Trump administration’s trade standoff with China could soon be coming to the U.S. Postal Service — and higher shipping rates for some types of mail would be the likely outcome.

The Trump administration is threatening to pull the United States out of the 145-year-old Universal Postal Union, complaining that some postal carriers like China’s aren’t paying enough to have foreign shipments delivered to U.S. recipients.

A showdown looms at a special union congress that is being held today through Thursday in Geneva.

The complaint centers on the reimbursement the Postal Service receives for providing final deliveries of bulky letters and small parcels sent from abroad — usually ones not weighing more than about 4½ pounds. Such mail can include high-value items such as mobile phones, memory sticks or pharmaceuticals.

“Whatever happens, prices to ship via the postal network … It’s going to cost more,” said Kate Muth, executive director of the International Mailers Advisory Group, which counts as its members companies such as eBay, DHL, Amazon, the Postal Service or their affiliates.

Companies might have to decide individually how to manage such increased rates, either by swallowing the costs or passing them on to customers.

One of the few companies to chime in publicly has been eBay, whose grassroots network has warned of possible “service disruptions and dramatically increased costs for shipping through the US Postal Service” if the United States pulls out.

The administration complains that China and many other countries get to pay lower reimbursements because they’re classified as developing countries, putting U.S. companies at a disadvantage. It wants postal services to set their own rates — and right away, not months from now.

“Today, manufacturers in countries as small as Cambodia and as large as China pay less to send small parcels from their countries to New York than U.S. manufacturers do to ship packages from Los Angeles to the Big Apple,” Trump trade adviser Peter Navarro wrote in the on Sept. 11. He said other countries such as Canada, Norway and Brazil are also losing money from the Universal Postal Union’s “distorted system.”

Navarro said the U.S. opposes one of three options being considered that would maintain limits on the amount that postal systems can charge overseas shippers.

The meeting may also be a test for a growing battle of diplomatic clout: China has been ratcheting up its presence in multilateral institutions, while the Trump administration has been largely shunning them.

The U.S. Chamber of Commerce and others have praised the Trump administration, which has led a multitiered challenge to China’s rising economic might, for finally stepping up to try to level an allegedly unfair playing field that has been bemoaned by several U.S. administrations.

In a Sept. 16 letter to Navarro provided to The Associated Press, the chamber’s chief policy officer, Neil Bradley, wrote that the Trump administration’s walkout threat has put the Universal Postal Union “on the brink of accepting the most meaningful reform to interpostal compensation arrangements in 50 years.”

He wrote that the Universal Postal Union reform debate “would never have materialized” without the “courage” of the Trump administration to contemplate withdrawal.

The State Department last year formally indicated that the United States would quit the union, an organization it helped create, on Oct. 17 if reforms can’t be agreed upon. The administration says the United States will start setting its own rates for reimbursement — so-called “self-declared rates” — whether or not it stays in.

Some have dubbed the withdrawal prospect “Pexit,” short for “Postal Exit” — a cheeky allusion to Brexit, Britain’s impending departure from the European Union, which likewise carries great uncertainties.

It’s unclear what exactly would happen if the U.S. pulls out of the postal group. Some influencing factors include whether nonpostal operators can fill the void or how soon bilateral deals between the United States and postal partners could be enacted. One thing many fear from the move: mail backlogs that start piling up.