The Trump administration had threatened to leave the body, the Universal Postal Union, after October 17 if its members did not change the pricing system imposed by postal services for the collection and distribution of international shipments and small parcels. The new agreement comes because the Trump administration is involved in a trade dispute with China, and senior officials said the current system primarily benefits China, Singapore and some European countries, such as France and Germany. These countries benefit from a 40-70% discount on packages weighing 4.4 pounds or less, officials said. In the services of the China Post, Chinese vendors gained access to solutions through outdated UPU agreements, in which China was an “undeveloped” country. Because of this structure, rates (until June 2020) for some postal companies (until June 2020) are often significantly lower than the cost of the target mail to deliver the parcel from the date of receipt of the parcel – so that companies can sell goods at margins inaccessible by your normal domestic business simply because they have access to cheap mail delivery solutions. The final taxes levied by the USPS partially offset this price difference. A 2015 report by the U.S. Postal Service`s inspector general compared these costs. The report showed that the post office made a net profit from international shipments. Incoming losses from international packages were more than covered by exits.
However, the report found that travel losses increased between 2010 and 2014, while outbound profits decreased. This was the time when international e-commerce began to flood the United States. The new UPU agreement provides the U.S. with tools to keep the USPS in black numbers in international shipping. Under the agreement, major importers of mail and parcels could begin introducing “self-reported rates” for foreign mail distribution from January 2021. There is a five-year-old child for the phasing in of new taxes. President Trump on Wednesday pulled out of a 144-year-old international postal deal that allows Chinese companies to ship small packages to the United States with a juicy rebate, a deal that government officials say stimulates foreign competitors and costs the U.S. postal service about $170 million a year. As part of the agreement, the United States will also pay US$40 million to the postal union to advance security measures against the shipment of drugs such as fentanyl and other illicit products.
The postal contract angered leaders of both parties long before Trump took office, Taub said. The Reagan administration, with few results, insisted on changes, and a 2015 government report warned that foreign mail had in doubted the U.S. postal system. Hussein welcomed the agreement Wednesday in an interview with reporters as a preservation of unity, but acknowledged that it would mean higher postal rates for some. On Wednesday, Navarro said the agreement would “transform an outdated and discriminatory system into a modern and resilient system, much better prepared to meet the new demands of e-commerce.” Under the agreement, the United States will also provide $40 million over five years to the Postal Union. The funding will help the postal union promote the use of computerized systems that provide security against shipping drugs such as fentanyl and other dangerous products, said David Dadge, a spokesman for the union.