US postal ‘Brexit’ avoided as deal reached with UPU

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The Universal Postal Union has reached a deal with the US, keeping the worldwide mail system intact after the United Nations organisation agreed to a compromise on Wednesday that will change the way its postal fees are structured.

After emergency talks in Geneva this week, the US will get to set its own postal rates starting in July 2020 and other countries will be allowed to move toward setting their own fees in 2021, with a five-year period of phasing in new rates.

The decision will keep the United States from leaving the group, which the Trump Administration had threatened to do — a move that many feared would create chaos in the international mail system.

President Donald Trump announced last October that the US would exit the Universal Postal Union (UPU) in one year if the group’s 192 members did not agree to reform the rates that countries charge each other when delivering mail and small packages across borders.

Trumps main beef was that the system allowed countries such as China to pay heavily subsidised rates, thanks to a system meant to help developing countries, even though its economy has grown substantially since the system was put in place.

This resulted in a situation where it was often cheaper for companies in China to send merchandise to the US than for domestic American manufacturers to mail similar items domestically.

As part of the deal, the US will also pay the postal union USD 40 million to help advance security measures against the shipping of drugs such as fentanyl and other illegal goods.

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