THERE’S NOT much to recommend President Trump’s approach to trade and globalization, which he summarizes in a slogan, “America First,” that harks back to the unproud days of pre-World War II isolationism. Mr. Trump is often wrong to depict the United States as a victim of the international institutions it helped to construct, out of enlightened self-interest, in the postwar world.
There are exceptions, however. One is the president’s recent decision to withdraw the United States from the Universal Postal Union, an international organization that has, indeed, evolved from a mechanism to promote global communication into a small but meaningful source of unfair economic advantage for China.
Established in 1874 and more recently absorbed into the U.N. system, the UPU sets the terms and conditions by which the world’s 192 national postal services carry one another’s letters and packages across borders. Almost half a century ago, in 1969, the more developed members of the UPU agreed to charge poorer nations a discounted fee to process small packages (those weighing less than 4.4 pounds).
At the time, China was poor and isolated — a non-factor in Asia-U.S. postal flows. Today, China is an export powerhouse, whose e-commerce businesses ship $354 billion worth of goods worldwide, much of it through the mail and much of it to the United States. Despite recent modest reforms, China’s postal system still enjoys most of the benefits of the 1969 arrangement. In some cases, this means that it can be cheaper to ship a small package from China to a final U.S. destination than to ship the same item from one part of this country to another. Not only does this cost the U.S. Postal Service an estimated $300 million per year and undercut U.S. companies, it may also be facilitating the deadly trans-Pacific traffic in fentanyl, a synthetic opioid.
U.S. businesses and the Postal Service — whose financial problems are too serious to tolerate any avoidable losses — have known about, and complained about, this anomaly for years. It has proved extremely difficult to remedy, in part because of the cumbersome internal decision-making processes at the UPU, which essentially require the agreement of a majority of the 192 countries represented. Once a decision gets made, it can take up to 18 months to implement. By giving the UPU a year’s notice that the United States plans to withdraw, Mr. Trump leverages the United States’ clout as the processor of nearly half the world’s mail and follows through on the notice his representatives gave to the UPU at a September meeting. In this case, the president speaks not only for himself but also for a wide cross-section of U.S. interest groups and, given China’s economic progress since 1969, simple fairness.
The UPU has said it will try to fast-track a review of the pact, a gesture of good faith the Trump administration would be wise to reciprocate. A negotiated solution would help modernize global shipping and keep the world’s largest economy involved in international postal cooperation.