According to Reuters, the Trump Administration began the yearlong process of withdrawing from the Universal Postal Union on Wednesday, arguing that the organization costs the United States millions each year with its subsidies to foreign shippers.

Established in 1874 with the Treaty of Berne, the Universal Postal Union is now an agency of the United Nations. The Union, headquartered in the Swiss capital, was meant to coordinate the postal services among member nations. It established three main standards for the shipment of mail:

• There should be a uniform and flat rate to mail a letter anywhere in the world.
• Every nation’s Postal Service should give equal treatment to foreign and domestic mail.
• Individual countries should retain all monies collected by their postal services for international postage.

Following the signature of the Treaty, individual stamps were no longer needed for each country, a letter went straight through to its final destination, and rates for the shipping of international mail were standardized.

Standardization of rates has allowed goods from foreign countries to be shipped to the U.S. at similar rates to shipping the same goods domestically.

By way of Bloomberg News, White House Press Secretary Sarah Sanders told reporters in a phone statement that the U.S. would be willing to renegotiate the terms of the Union, and that “If negotiations are successful, the administration is prepared to rescind the notice of withdrawal and remain in the UPU.”  Sarah Sanders further noted that President Trump wants to adopt “self-declared rates” as soon as possible.

A uniform system of self-declared rates would allow the U.S. Postal Service (USPS) to set its own rates on all packages shipped internationally.  Under the Universal Postal Union standards, USPS is only permitted to set its own rates on packages weighing over 4.4 pounds.

The Trump Administration defended its move, arguing that the Union favors China and other foreign shippers, unfairly discriminating against US goods.  Under the terms of the current agreement, poor and developing countries are assessed relatively lower rates—a policy the administration says unfairly advantages China by way of providing a de facto subsidy to ship Chinese goods into the United States.  Under a system of self-declared rates, the USPS could charge more for goods shipped from China (rates that would better reflect the higher costs of shipping from across the globe) and therefore put American companies on an equal playing field in competing with foreign sellers.

U.S. manufacturers applauded the White House’s announcement. Jay Timmons, President of the National Association of Manufacturers said in a statement “President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-U.S. manufacturer subsidy China receives from the U.S. Postal Service.”

The subsidy referred to by Mr. Timmons takes the form of the aforementioned policy of assessing relatively lower rates to mail and other shipments from poorer and developing countries.

Other U.S. companies lauded the president’s actions, as well. Bloomberg reports United Parcel Service (UPS) said in a statement that President Trump “took the right step” in beginning to withdraw the U.S. from the deal and that “Foreign postal operators should not be given government approved advantages in what is a competitive market.”

Amazon and FedEx, two companies who have for years lobbied for the federal government to re-evaluate the terms of the Union, have thus far declined to comment.