U.S. Sen. Bill Cassidy (R-LA) commended the White House for a plan to withdraw from the United Nations’ Universal Postal Union (UPU), action similar to proposed legislation the senator sponsored earlier this year.
The plan put forth by President Donald Trump is aimed at reining in Chinese manufacturers that the administration thinks have an unfair advantage over U.S. producers.
That’s aligned with provisions in Sen. Cassidy’s Ending Needless Delivery Subsidies (ENDS) Act of 2018, S. 2638, which he introduced on April 10 to require the U.S. Secretary of State to seek to negotiate the elimination of all foreign subsidies for international postal shipments to the United States, among other provisions, according to the text of the bill.
“President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates,” said Sen. Cassidy. “I applaud the president for taking this action.”
The international UPU agreement, which determines the rates that postal services charge to deliver mail and packages that originate with foreign carriers, allows Chinese manufacturers to sell lower-priced consumer goods at a competitive advantage, according to the White House. China is among several other countries listed in a UPU category for developing nations, which pay lower rates than wealthier nations.
On Oct. 17, the White House issued a press statement saying the president received and agrees with a report from the U.S. State Department saying that “sufficient progress has not been made on reforming terms” in the UPU.
“The President concurs with the Department of State’s recommendation to adopt self-declared rates for terminal dues as soon as practical, and no later than January 1, 2020,” according to the statement. “The Department of State will also file notice that the United States will withdraw from the UPU.”
Once that notice is filed, a one-year withdrawal process would start, per rules outlined in the UPU Constitution.
“If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU,” the White House said.
S. 2638, according to Sen. Cassidy’s office, also would save U.S. taxpayers from having to subsidize international postal shipments from foreign countries like China to the United States.
“I’ve been working with the administration for months on addressing this terrible deal, because American companies are being run out of business by foreign competitors making cheap knockoff products they can ship to Louisiana for less than it costs an American company to mail the genuine product,” the senator said last week.
After introducing S. 2638 in April, Sen. Cassidy has continued efforts to address unfair UPU-set rates, including by demanding that the U.S. Postal Regulatory Commission (PRC) release information on international shipping rates set by the UPU; directing staff to discuss his proposed bill with the Office of the U.S. Trade Representative; and urging the PRC on July 3 to prioritize American postal workers in any negotiations of terminal dues agreements.
The UPU uses a flawed system to determine shipping rates, resulting in the United States effectively subsidizing developing countries’ exports delivered by mail, according to Cassidy’s statement, which pointed out that under the UPU’s system, while China, India and Brazil pay lower fees, the U.S. Postal Service picks up the tab.
S. 2368 is under consideration by the U.S. Senate Foreign Relations Committee.