The Trump administration is moving to pull out of the Universal Postal Union (UPU), a 144-year-old worldwide treaty organization that sets rates for sending mail between different countries. The State Department will deliver a notice to the Universal Postal Union in Switzerland Wednesday, White House Press Secretary Sarah Huckabee Sanders said in a statement.
Shares of internet-based mailing and shipping provider Stamps.com fell almost 9% after the announcement.
Officials added it is actually cheaper to send a package between Beijing and NY than it is to send them between some cities domestically. The current worldwide shipping regime doesn't do enough to distinguish between letters and packages containing goods that might need inspection by customs, Trump argued in the memorandum.
"President Donald J. Trump received a report from the Department of State pursuant to the August 23, 2018, Presidential Memorandum on "Modernizing the Monetary Reimbursement Model for the Delivery of Goods Through the International Postal System and Enhancing the Security and Safety of International Mail".
Trump generally hasn't been shy about criticizing and rejecting global agreements he feels disadvantage the United States, from NAFTA to North Atlantic Treaty Organisation.
Trump has also withdrawn the U.S. from UNESCO and the United Nations Human Rights Council and pulled USA funding for the UN agency for Palestinian refugees. The officials, who briefed reporters on condition of anonymity, said postal rates wouldn't change for at least six months, and that the US would prefer to stay inside the union's system.
Should the negotiations prove successful, the Trump administration is prepared to rescind the notice of withdrawal and remain in the UPU, Sanders added.
"The UPU remains committed to attainment of the noble aims of worldwide collaboration by working with all its 192 member countries to ensure that the treaty best serves everyone", Hussein said.
One senior White House said the treaty's "subsidy" had facilitated the transfer of a high level of counterfeit goods and the narcotic and fentanyl trade.
The UPU, which comprises 192 countries, sets lower prices for small packages coming from emerging and developing countries, a group that still includes China. The official described it as an economic distortion that the administration wanted to correct.
The move was welcomed by the U.S National Association of Manufacturers, which called the exiting postal pact "outdated" in the age of e-commerce and at a time of Chinese manufacturing dominance.
A change could benefit United States merchants and shippers, including Amazon.com Inc, which have called on United States officials for years to address foreign postal services' access to low rates.