U.S. Threat to Withdraw From Postal Treaty Prompts Emergency Talks

GENEVA — Emergency talks began on Tuesday as delegates from nearly 150 countries tried to prevent a massive disruption to international postal services that could occur if President Trump pulls America out of a United Nations body that has regulated mail services for more than a century.

The United States has threatened to leave the body, the Universal Postal Union, after Oct. 17 if its members don’t change the system of fees that postal services charge for collection and delivery of mail and small parcels.

Of particular concern to the Trump administration is the sliding scale of fees that allows China, the world’s second largest economy, to take advantage of lower rates that are available to developing countries. Those fees, which have been in place since 1969, were modified and partly raised in 2016, but the administration has argued the changes did not go far enough.

As a result, it remains cheaper for manufacturers in countries like China and Cambodia to send a small package to the United States than it is for American businesses to ship them from Los Angeles to New York, according to Peter Navarro, a trade adviser to Mr. Trump.

At the start of the postal union’s extraordinary congress — the third ever held in its nearly 150-year history — Mr. Navarro said the United States had been working with other countries to find a solution for a system “that everyone knows is broken.” But he said the United States was also preparing for a “seamless exit.”

Mr. Navarro warned that while other countries seemed to expect the United States to soften its stance, that was not the case. “I can only say to you in all candor that this represents a severe miscalculation and a very poor reading of our intentions,” he said.

Mr. Trump’s ultimatum reflects deepening impatience in Washington over the slow pace of reform 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 percent share. More favorable shipping rates mean its companies can send products purchased online at a much cheaper rate than overseas competitors.

As a result, “we lose hundreds of millions of dollars a year, we lose tens of thousands of jobs a year and the factories and the growth associated with that,” Mr. Navarro told reporters ahead of the meeting.

That raised concerns among some delegates that the United States could wreak havoc on the international postal system.

Bishar Hussein, the Universal Postal Union’s director general, made clear he believed the United States withdrawal would be anything but seamless. Its departure would mean “total destruction” of existing services to the United States, he told reporters.

The United States would be excluded from services and would be unable to use existing international mail processing codes. Washington would also be forced to negotiate new agreements covering postal and customs services with the remaining 191 members to replace those currently in place under the union, he said.

Its withdrawal would present “a nightmare scenario” for other countries, which would not be able to exchange mail, packets or parcels with the United States Postal Services. For consumers, he said, the United States withdrawal would spell big increases in postal charges.

American companies that depend on low-cost shipments as part of their business model, including e-commerce platforms like Amazon and eBay, could be hampered if the United States pulled out.

In a statement in August, eBay criticized the current system as “unfair for certain mail users,” like those who pay more to ship a package within the United States than they would if they shipped that package to the same destination from a foreign country.

But the company also said that the United States’ withdrawal from the system would be damaging.

“If the U.S. moves forward with this withdrawal plan, it could mean big trouble for anyone who sends or receives mail or packages internationally,” the statement said.

Democrats Abroad, a branch of the Democratic Party, has flagged concerns about the impact for some three million American voters overseas. Its website warned that the disruption to services would prevent those voters from sending their ballots or ballot requests by standard postal mail.

As a result of the preparations made “in Trump time” over the past year, Mr. Navarro dismissed fears of mail chaos.

“We have a very clear understanding of what we need to do. We have got confidence that if we have to leave, it will be seamless,” he told reporters. “We anticipate absolutely no disruption in military mail, election mail or holiday mail.”

An overhaul of the postal system is being pushed amid a trade fight between China and the United States. Mr. Trump has called China an economic enemy and is looking for ways to prevent its economic dominance. Mr. Navarro said the postal service issue was entirely separate from the broader trade dispute.

A resolution could still happen. Mr. Navarro laid out two options that would allow the United States to remain in the union. Washington’s preferred approach is an immediate switch to self-declared rates, which would allow countries to decide unilaterally what they charge. It would cause some short-term disruption, he acknowledged to the meeting, but “it is the clearest, cleanest, fairest and quickest path to a reform that is long overdue.”

That proposal is also reportedly backed by Canada and Brazil but was voted down in a secret ballot on Tuesday focusing the meeting’s attention on another option.

That option, which Mr. Navarro said was broadly acceptable to Washington, would allow the United States to introduce new rates immediately and would leave a five-year transition period starting in 2020 for other countries to bring a new schedule of charges into effect.

Mr. Navarro said such a plan “already represents a very significant compromise of the United States.”

Another option, open to the meeting and supported by China, among others, would keep the status quo with some modest adjustment.

Mr. Navarro dismissed that option as a “cynical nonstarter” that would trigger the United States’ withdrawal.

The U.S. Chamber of Commerce welcomed the prospect of reform in the postal system.

The Universal Postal Union “should not be in the business of setting prices or establishing preferential customs practices,” Sean Heather, its senior vice president for international regulatory affairs, said in an email. Setting the United States and other countries on the path to fixing their own rates is “important to ensure American exporters compete on a level playing field when shipping to foreign markets.”

Mr. Hussein, despite his fears of major disruption to global postal services, was hopeful the Universal Postal Union would at least pull through. It had weathered two world wars and adapted to meet successive challenges from emerging technologies, he told reporters, and “I do not believe that we will disappear just like that.”

Others were not so sanguine. If the United States withdrew from the union, a delegate from Moldova remarked, “I think it’s the beginning of the end for the union.”

Ana Swanson contributed reporting from Washington.

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