U.S. announces withdrawal from UN's Universal Postal Union

Trump’s plans to withdraw from UPU could cause “postal chaos”

U.S. announces withdrawal from UN's Universal Postal Union

Under the union's framework it takes a year for a country to withdraw, during which rates can be renegotiated.

USA officials have raised concerns over the recent depreciation of China's currency, . amid the escalating trade tensions between the two economic superpowers. The officials say the treaty is used by shippers of the narcotic fentanyl to the USA from China.

Washington and Beijing are locked in battle over the yawning US-China trade deficit, which Trump describes as a job killer.

The Trump administration is moving to pull out of the Universal Postal Union (UPU), a 144-year-old global treaty organization that sets rates for sending mail between different countries. 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.

The Times said it expected the US State Department to inform UPU officials of its intention to pull out of the system and "self-declare" new, higher rates on China.

The Trump administration announced Wednesday that it plans to withdraw from an worldwide treaty on postal rates in another moved aimed at pressuring China amid broader trade and political disputes.

No country has been labeled a currency manipulator by the United States since the Clinton administration tagged China in 1994.

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

The move will most likely inflame tensions with China, which the administration has accused of unfair trade practices and punished with tariffs on $250 billion worth of Chinese goods, investment restrictions and other measures.

The "system creates winners and losers", the report's author's concluded, especially China's national postal service and "Chinese online retailers in the lightweight, low-value package segment at the expense of the U.S. Postal Service and American retailers".

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.

USA officials said the administration sought to revise the treaty in September and was rebuffed by other nations, prompting the decision to withdraw. A 2014 study, cited in a Postal Service analysis of the issue, estimated that discounted shipping cost industrialized nations as much as $2.1 billion a year in aggregate. "These pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China's currency practices including through ongoing discussions with the People's Bank of China", Mnuchin said in a statement accompanying the report.

"Something has to be done", he said.

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