New Postal Rates Help Level Global Commerce, Trump Official Says
- Commission approves new rates for foreign package deliveries
- Changes an ‘essential’ step toward fairness, Navarro says
New rates for the delivery of small packages from foreign postal operators will help U.S. manufacturers and retailers whose competitors now get unfair subsidies, a top White House trade adviser said.
The Postal Regulatory Commission recently approved the new rate structure but excluded private carriers such as FedEx Corp. and United Parcel Service Inc., which will have to negotiate separate agreements with the U.S. Postal Service.
New rates were required because of President Donald Trump’s order last year to overrule the low rates set by the Universal Postal Union that didn’t cover the USPS’s costs. Those rates, known as terminal dues, meant the USPS ended up subsidizing e-commerce from countries such as China, the Trump administration said.
“This was an essential procedural step in order for the U.S. to self-declare its rates and thereby provide fair postal rates for the U.S. mailers, manufacturers and workers harmed by the current system,” Peter Navarro, assistant to the president for trade and manufacturing policy, said late Tuesday.
“By self-declaring rates, the Trump administration will end the unfair subsidies now lavished on foreign producers and it will self-declare either inside or outside the UPU—pending the outcome of the Extraordinary Congress,” a meeting of all 192 member countries set for Sept. 25 in Geneva, Navarro said.
Range of Prices Only
The White House announced last October the U.S. would set its own rates for the delivery of small packets under 2 kilograms. Further, if the UPU didn’t agree to those rates, the U.S. would withdraw from the international body on Oct. 17. The UPU called for the Geneva meeting to vote on proposals to allow self-declared rates that would keep the U.S. as a member.
Rather than release specific rates, the USPS proposed a range of prices that it said fully recovers its costs, avoids a preference for designated operators over non-designated operators, and avoids a preference for foreign mailers over domestic mailers.
The USPS said the range of rates would enable it to institute prices whether the U.S. remains in or withdraws from the UPU. Still, it must specify item and weight prices at least 15 days before the planned effective date of those prices, presumably after the vote in Switzerland.
UPS and FedEx declined to comment on the rate order, issued July 12 by the Postal Regulatory Commission.
Planning Still Difficult
The International Mailers Advisory Group said it supports the new rate order, knowing the USPS will have to file actual prices at least 15 days in advance of their effective date, said Kate Muth, executive director of the IMAG, which represents outbound shippers and exporters.
Still, IMAG members hope the USPS will file those prices well in advance of the minimum 15-day requirement so they can budget and plan accordingly, she said. It is expected that other countries will raise their rates to correspond with the new, higher U.S. rates.
“It has been extremely difficult for IMAG members to plan for a potential withdrawal from the UPU, put contingency plans in place, and try to budget for new rates while not knowing exactly what those rates will be or whether the U.S. will have access to the UPU network and documentation,” Muth said.
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