October 17, 2018

Cassidy Applauds President Trump for Initiating U.S. Withdrawal from Unfair Treaty on International Mail Rates

WASHINGTON— U.S. Senator Bill Cassidy, M.D. (R-LA), today applauded President Trump for ordering his administration to effectively implement the Ending Needless Delivery Subsidies (ENDS) Act, legislation Cassidy introduced in April that would save U.S. taxpayers from having to subsidize international postal shipments from foreign countries like China to the United States.

The Trump Administration announced today it would begin the process of withdrawing from the Universal Postal Union treaty.

“President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates,” said Dr. Cassidy. “I’ve been working with the administration for months on addressing this terrible deal, because American companies are being run out of business by foreign competitors making cheap knockoff products they can ship to Louisiana for less than it costs an American company to mail the genuine product. I applaud the president for taking this action.”

Timeline of Cassidy’s work to address unfair UPU-set rates:

  • April 13 – Cassidy’s staff discusses the senator’s proposal with White House Congressional Affairs.
  • May 10 – Cassidy’s staff discusses the senator’s proposal with the Office of the U.S. Trade Representative (USTR), highlighting the ways UPU reform would benefit U.S. manufacturers in terms of trade.
  • May 17 – Cassidy’s staff meets with USPS Deputy Postmaster General Ronald Stroman to request terminal dues data and ask the USPS to stop keeping the rates secret.
  • May 23 – Cassidy’s staff discusses the senator’s proposal with the State Department.
  • June 5 – Cassidy’s staff discusses the senator’s proposal with White House officials, and urges executive action to change postal rates for foreign shippers.
  • July 3 – Cassidy urges the Postal Regulatory Commission (PRC) to put American workers first in any negotiations of terminal dues agreements during the UPU Extraordinary Congress in September.
  • August 31 – Cassidy, along with Senators Ron Johnson (R-WI), Marco Rubio (R-FL), and James Lankford (R-OK), and Representatives Kenny Marchant (R-TX) and Ralph Abraham (R-LA), urged Secretary of State Mike Pompeo to put “Americans first in any negotiations of terminal dues agreements.”

Examples of American companies hurt by this unfair international agreement include Nite Ize in Colorado and Mighty Mug in New Jersey.

Currently, the United Nations’ Universal Postal Union (UPU) sets the fee each member country must pay for a foreign postal service to deliver international mail. The UPU uses a flawed system to determine shipping rates, resulting in the United States effectively subsidizing developing countries’ exports delivered by mail. A 2015 case study by the United States Postal Service’s (USPS) Office of Inspector General found that low cost items sent from China cost 27 percent less to ship than similar items sent within the United States.

Under the UPU’s system, while China, India and Brazil pay smaller fees, the U.S. Postal Service picks up the tab. A 2017 Government Accountability Office (GAO) report stated that “the rates for inbound international terminal dues mail does not cover [USPS’s] costs for delivering that mail in the United States. As a result, USPS’s net losses on this type of mail more than doubled between 2012 and 2016.”

President Trump’s August memorandum laid out how his administration will seek reforms to the U.N.’s Universal Postal Union (UPU) that result in international mail rates that “fully reimburse the USPS for costs to the same extent as domestic rates for comparable services” and “avoid a preference for inbound foreign small packages containing goods that favors foreign mailers over domestic mailers.”