Published: Fri, October 19, 2018
Worldwide | By Gretchen Simon

USA announces withdrawal from UN's Universal Postal Union

USA announces withdrawal from UN's Universal Postal Union

"According to the union's rules, members will have a year to renegotiate new terms before the withdrawal becomes permanent".

Foreign Ministry spokesman Lu Kang said the move should not be linked to China, despite arguments that the arrangement especially benefits Chinese manufacturers by making it cheaper to ship packages from Beijing to NY than from one side of the U.S.to the other. The White House said in a statement that the U.S. State Department would give notice of its intent to pull out of the postal union Wednesday, but the parties involved would still have a year to negotiate before it's a done deal. Navarro has encouraged Trump to crack down on China on a variety of trade and political questions that he has argued are disadvantaging the USA at China's expense.

"We regret the USA decision to withdraw from the Universal Postal Union", Lu told reporters at a daily press briefing. The result could be an increase in prices on many household goods, consumer electronics, and clothing if a new rate schedule is not agreed upon. Government officials estimated the Universal Postal Union agreement costs the U.S. Postal Service about $170 million to $300 million per year and enables unfair foreign competition.

The United States has refrained from labelling China a "currency manipulator" in a move which may help defuse escalating tension over trade between the two countries. Washington has imposed tariffs on about $250 billion in Chinese goods, and Beijing has retaliated by targeting about $110 billion in USA products.

It is not clear whether China will retaliate if the United States pulls out of the treaty.

China's Ambassador to the U.S. Cui Tiankai told "Fox News Sunday" host Chris Wallace that there is no trade war between the two countries, but then seemed to contradict himself by claiming America started it.

The existing worldwide postal system makes it cheaper to ship a package from China to America than from one side of the United States to the other.

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They argued that the treaty allows foreign postal services, especially in China but also in Germany, to take advantage of cheap shipments to the US.

From now on, the United States will have "self-declared rates" for packages under 2 kilograms (4.4 pounds) to correct what US officials call a "major economic distortion".

Industry groups, even ones that have questioned the president's tariffs on Chinese imports, applauded the move as proportional and targeted.

If the U.S.is not satisfied with the trade concessions offered by the targeted country, it can impose punitive tariffs, although the offending country can appeal to the Geneva-based World Trade Organization.

"Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China", Jay Timmons, president of the manufacturers association, said in a statement.

But the changes could have an even bigger impact on small retailers who have found themselves outgunned and undercut by Chinese competitors.

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