It is no blasphemy to question the status quo in longstanding international organizations: are they fulfilling their original purpose and could they do a better job with their current purpose? These are questions posed by such referenda as Brexit and the entire Trump phenomenon.
The League of Nations, for example, was formed after the Great War, to make sure that such an abomination never happened again. After that had to retroactively be named World War I, people realized it was ineffective and the United Nations was rolled out. Given that World War III never happened, we can conclude that yes, the UN fulfilled its original purpose.
But could it do a better job for its current purpose? Only a fool, or a well-paid UN bureaucrat, would answer “no.”
One small step to improve the UN was taken last week when its Universal Postal Union (UPU) met in Geneva to modify the process for international rate-setting on mail between countries. The UPU demonstrated a willingness to overhaul the status quo framework for international rates which have proven discriminatory toward the United States and small-business owners here.
The Trump Administration has railed against this, with White House trade adviser Dr. Peter Navarro outlining a list of demands for the UPU in a Financial Times op-ed, backed up by the threat to pull out of the UPU if there was no change. Very much like Trump’s push to get NATO members to pay their fair share at last, he seems to be winning.
The most positive outcomes from last week’s UPU congress are the drastic reforms to a system where foreign shippers get advantageous subsidized rates from the U.S. Postal Service in comparison to domestic shippers within the U.S. Historically, the UPU has required the USPS to charge a foreign postal operator to deliver its packages at a rate, far lower than its domestic delivery rate, putting American manufacturers and retailers at a pointless disadvantage. As the volume of international e-commerce has risen, the situation has become increasingly damaging to U.S. merchants
The UPU divides its 192 member countries into groups based on the strength of their economies, which determine how each country pays in fees to a foreign postal service for delivering inbound mail. The scale is on a grade from 1 to 50 “contribution units,” so less-developed countries can get significant discounts on shipments between more-developed ones.
In principle this is a good way to help poorer countries get a leg up, but the system is clearly being abused. The U.S. – of course – pays the most at 50 contribution units while China – despite being the largest e-commerce market in the world – pays only 25.
In a Wall Street Journal op-ed last year – "This Subsidy for China Is Dumb as a Post" – Mighty Mug CEO Jayme Smaldone noted that his company must pay the post office $6.30 to ship one of its mugs within the U.S. while people here could instead buy counterfeit mugs from China for only $5.69 with free shipping under the UPU’s current guidelines.
“How is a Chinese retailer able to sell a product and send it 8,100 miles for less than our shipping costs alone?” Smaldone wrote. “American businesses are hurt by low-priced Chinese imports, and above-market shipping rates for exports. This is not America first; it is America last.”
China has been manipulating this system, much like its currency, to fake like it’s a developing nation while blossoming into a super-power. Oh, and figuring out how to sink our aircraft carriers.
With this improvement to the UPU’s shipping policy, the post office will be positioned to stop the bleeding on losses due to undercharging. This has cost the USPS almost $500 million in losses over the past four years, according to annual filings. One hopes this prompts action for broader USPS reforms that solve systemic pricing and accounting problems, as has been discussed here before.
Given that the United States provides 22 percent of the UN’s budget, it’s not unreasonable for us to make sure the organization is worth the massive investment we’ve made. While many will never give him the credit he deserves for wins like this, Trump’s work on behalf of American workers is first class.
Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.
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