Fee deal keeps U.S. in world postal treaty

GENEVA — The United States agreed Wednesday to stay in a United Nations body that has regulated mail services for more than a century after delegates agreed during emergency talks to change the way postal fees are structured.

President Donald Trump’s administration had threatened to leave the body, the Universal Postal Union, after Oct. 17 if its members did not change the system of fees that postal services charge for collection and delivery of mail and small parcels.

The administration’s primary concern has been the sliding scale of fees that allowed China, the world’s second-largest economy, to take advantage of lower rates that are available to developing countries. As a result, manufacturers in countries like China and Cambodia have been able to pay far less to send a small package to the United States than what it costs American businesses to ship them from Los Angeles to New York.

The compromise deal struck Wednesday will allow the United States to set its own postal fees beginning in July and allow other countries that receive more than 75,000 metric tons of mail a year to phase in higher rates starting in January 2021. As a result of the change, China, which was the major beneficiary of the old system, will have to pay more for shipping goods to the United States.

Bishar Hussein, head of the Universal Postal Union, called the outcome “the most remarkable day in the history of the union,” the nearly 150-year old organization that regulates the postal services of 192 member countries.

Peter Navarro, Trump’s trade adviser, said the decision was a “huge victory for millions of American workers and businesses” that would save the U.S. between $300 million and $500 million a year.

“We’ll buy less Chinese stuff, buy more from other countries, we will make more in America and the market will be free of distortions,” Navarro said. “China is certainly going to pay more for the privilege of shipping to our market.”

On Tuesday, Navarro told delegates the United States was prepared to leave the postal treaty, an ultimatum that reflected deepening impatience in Washington over the slow pace of change to a global postal system that has failed to keep up with market and economic changes or recognize the growth of China, which is now the biggest player in the $30 trillion e-commerce market, with a roughly 30% share.

Such an outcome could have proved highly disruptive to American consumers and businesses, including U.S. companies that depend on low-cost shipments as part of their business model.