It's hard to get information these days, harder still to get information on things that happen that are seemingly out of our control as a vocal and voting populace. This is a pending decision and action that I feel has had almost no light shed on it, many of the coverage (when and if it's even covered) gets swept to the back-burner far too quickly. There are many articles on the web, but far too few that cover the dangers this decision could impose, if even they discuss that. I feel this is an important thing to know, and even if my own opinion here doesn't ring true with you, we all deserve to know more about how this decision will affect us. Contributing Editor: Candace Kaufman Photo from www.upu.int Introduction A Google search of the Universal Postal Union, or "UPU" for short, will result in this simplified definition from Wikipedia, which is itself a simplified version from the UPU website linked below this page; “The Universal Postal Union, established by the Treaty of Bern of 1874, is a specialized agency of the United Nations that coordinates postal policies among member nations, in addition to the worldwide postal system” -Wikipedia.org This institution has far reaching implications, both beneficial and at times, possibly irritating for the countries involved in it (currently 190 countries and 2 independent territories.) The UPU, as is stated above, is in charge of the policies governing the worldwide postal systems wherever they expand in the member countries’ territories. This means there are rules and policies in place for things like worldwide shipping, weights, and the upkeep of up-to-date products and services for the countries involved. If you ever get products shipped to your home (think Etsy, Amazon, Wish, really anything these days) or send things out as part of your business, or you are an average person who likes going to the store to buy clothing more than once a year due to price hikes, you’re going to want to know about this situation we find ourselves in if you don’t already. So we have a an institution that has been in operation for close to 145 years that is in charge of the prices countries pay to ship things outside of their own borders. The United States has been a part of this organization since its inception in 1874, and with decisions made by our current administration, we as a country plan to leave the UPU in October of this year (2019). A few things you need to know before we get in to this; 1. No country has ever left the UPU. 2. The reasons behind our leaving are murky at best, and at worst, political strong-arming. 3. The negative impacts far outweigh the positives at the time of this writing 4. We have done nothing to prepare for this. 5. It seems not many people in this country know about this and that’s a mistake because of how detrimental this decision could be. State of Affairs and Maybe One Positive In September, 2018, President Trump announced the United States’ intention to leave the UPU because of concerns that China was getting an unfair advantage in terms of the amount of discounts received on shipping worldwide. While there might politically be plenty of reasons to add this to an ever-growing list of President Trump’s detractors’ reasons to hate on him, this point has some credit in my opinion, and what follows is possibly the only positive I’ve been able to find in this mess of a situation. The UPU has guidelines determining what countries pay to ship dependent upon their status, the two of main importance here being a “Developed” country and “Undeveloped.” China, even though it’s the world’s second largest economy, is still underneath the Undeveloped bracket. This means that with all of the shipping discounts the UPU gives to Undeveloped countries to make it easier for them to stay in the game long enough to not be throttled by their own shipping costs while trying to produce and ship their own products and resources worldwide, gaining a higher percentage of returns based on not paying what other countries might have to pay to ship the same thing, therefore helping to grow their economies until eventually growing and getting a Developed reclassification from the UPU. This is generally looked at as an incentive to join and grow their economy while entering the worldwide market, possibly reaching more consumers of a given product than they would otherwise could. President Trump, whether he agrees with these policies and discounts in general, certainly disagrees with these discounts applying to China, being what they are economically, and has therefore said that if the UPU will renegotiate terms, that we will rescind our decision to leave. As of August, 2019, with two months to go until the October deadline, this has not happened. Let’s say, for the sake of offering a positive, the UPU renegotiated to our liking, specifically classifying China as Developed, which as far as I’ve read, is the goal, or at the very least, limited the amount of shipping and tax discounts they receive in hopes of cutting their much cheaper product market that “undercuts American businesses” with their ability to produce quickly, pay employees less, and relative to this piece, pay far less in shipping worldwide because of this "Undeveloped” classification, and let’s say this resulted in the US’s rescinding the exit plans. China might then not have the ability to undercut as much as it does today, having in that case to pay more or even the same as a Developed country, theoretically leveling some of the trade field. The companies here in the US wouldn’t have to worry so much about basically having to offer free shipping because it’s more or less expected by our population, or worry that Chinese competing copycat products that go for less than half of the original product in the US on sites like “Wish” poaching their consumer base. We could speculate this would lead to fairer trade and hopefully more money in the American company’s pocket. However, as usual, there are always negatives, and while the above can certainly be argued as a positive, (I mean, how is the second largest economy in the world allocated Undeveloped?) the negatives are far more advanced and a much worse “Domino Effect” in reality. The Reality and Likely Negatives The first problem with leaving the Universal Postal Union is a general one; no one’s ever done it. Perhaps that’s a hint something’s working, and if it’s not broken, don’t fix it, however, we have no real idea on what will happen if we leave based on a sheer lack of evidence. Anything here or otherwise must be based on “best guesses” which are currently far from hopeful, and either way, are very hard to rely or put faith in. I’m also obligated to say that I absolutely advocate leaving things that are not good for our country based on consensus of the people, democratic decision, and in cases like these, people with much more experience and wisdom than me leading the front from a business perspective. I’m not at all saying we shouldn’t leave it because no one has before and we should blindly follow the institution forward, but in this case, it seems like it runs pretty smoothly and to get bias out the way, again in this case, I think President Trump is trying to put some more effort in to stifling some of his competition business-wise on a much bigger scale than his private companies. I don’t understand how this decision could be looked at as a good one, this situation is getting barely any coverage and most of that is written form, articles and blog posts, I’ve personally never seen a headline on TV. That’s always a bit fishy to me, but then, I’m a distrusting person when it comes to politics. That young opinion out of the way, the wishful thinking of this decision cannot supersede the likely realities. First and foremost, the abject observation of a country’s GDP as its only indicator mentioned when referencing its wealth and prosperity to be used to argue its overall status is ridiculous. While China is absolutely an economic powerhouse, overall size and population must be considered, as well must the fact that when considering its economic status, we’re likely referencing and thinking only of Beijing and Hong Kong, two obviously rich cities in an almost “Third-World” surrounding. China has, as far as per-capita, 1/3 the world’s average of fresh water, 1/2 the world’s average coal consumption, and 1/5 of the world’s natural gas average consumption. “In China, 150 million people, equivalent to the total Russian population, are caught in poverty according to the UN standard, living on less than 1 US dollar a day. By our own definition, 35.97 million rural residents, equivalent to the size of Polish population, were living in poverty as of 2009, with a yearly income under 175 US dollars. 83 million people in China are living with disabilities, matching the total population of Germany. Each year, 12 million people are newly added to our job market, outnumbering the total population of Greece. China is still at the lower end of the global industrial chain.” [from Song Zhe, the People’s Republic of China's Ambassador to the EU. Article linked below from Euroactiv.com] While our administration may have a decent point in this area of the ongoing trade war between our country and China, exiting the UPU doesn’t make sense based purely upon how the Universal Postal Union works. These aren’t like the people that rate your movies PG or R, faceless and unknowable “voices of the community” out there for everyone’s "best interest." Member countries negotiate fairly regularly for reassessments of status and rates between them (again, the US and China are long-time members.) Our administration wasn’t pleased with the last round of these negotiations, so instead of pressing and persisting we’re seemingly taking the “I’m taking all of my toys out of the sandbox and going home” method. This generally doesn’t ease situations between 5-year-olds and I can’t imagine it will here. We are gambling on our country being big and important enough to dictate the decisions of the other inevitably imposed countries to go along with what we are asking for. And to add more confusion, China was already supposed to pay an increased 13% on rates based on a an assessment conclusion starting this year and ending 2021, presumably when the next assessment would take place, and have historically been paying more and more as they grow economically, this being the overall intent through the Undeveloped to Developed progression. How The Negatives Impose On You Exiting poses one of the biggest problems for the consumers and business owners of the exited country, being you as an American in this case. Exiting the UPU, put simply, leaves us with more responsibilities politically to bi-laterally negotiate with almost 200 countries that will be changing rates periodically based on their negotiations with the UPU. We would have no say in that regard, meaning, whatever rate we’re offered is what we get or no deal. This would cut off access getting products from a myriad places around the world, and further, would hemorrhage business owners buying base products from around the world, and ironically, China. That’s not to mention the possible retaliatory rates countries would realistically be able to impose, given we have money and no say at the same time, for leaving the UPU and trying to strong-arm these decisions with irrational reaction. Let’s say you buy a 20lb bag of beads for your Etsy homemade jewelry shop from China (the world’s cheapest and easiest go-to jewelry bead producer) for $40, and you can ship to England (another longtime UPU member) for roughly $5 per item. Factor that $5 dollar post in to your overall cost and let’s say your beautiful handmade beaded necklace is $25 including your labor and expected profit. If England decides their shipping in from the US is at a 100% increase for packages under 5lbs, your necklaces now have to be around $35 to make you even. All the while, China has not changed anything about their production or shipping capabilities, as we’ve left the UPU in this situation. This means, your cost does nothing but increase at any country’s whim for you and all business owners that ship outside the US, while possible customers are even more inclined to buy elsewhere (who wants more expensive stuff at the end of the day?) and therefore stagnate further the economic situation of American business owners here at home. And think if it hits your bead jewelry line hard, what is is doing to the plethora of items we ship overseas? Or the immense amount we ship in? To give you an idea, 15% of our food is imported, “including 50% of fresh fruit, 20% of fresh vegetables, and 80% of our seafood.” The social impact of this impending decision has grounds to be financially catastrophic from the average person not wanting to spend money on clothing except for once a year because that’s all they can really afford (we import 3.9 billion dollars worth of clothing each year, by the way) to the large companies having to hike their prices to make them even. The bigger and more popular the company, (Microsoft, Apple, Ford, Chevy) and the more they use imported parts, the more you will pay for the commodities that have become necessity here, while possibly killing independent business from those that can’t even begin to think about opening shop without taking on insane amounts of debt and hoping to crawl above it. I would also add, this is all without yet mentioning the ever present and growing list of tariffs we are employing and being put under, including the soon to be enacted “Green Tariffs” through our country and others. Tariffs, in a nutshell, could impact us further after this exit from the Universal Postal Union several ways. As retaliatory as new tariffs have been lately, what with the US, China, European countries, and others either enacting more tariffs or being excluded because of different trade deals, the exit itself will add even more confusion and likely higher prices for both the consumer and the producer in this growing list of financial concerns. Tariffs are supposed to do many things, one of which is providing a layer of protection to in-country producers not having to compete in their own country with prices from another country producing similar goods for less total cost and therefore higher returns on lower priced goods on the market. We in the US are already seeing the outcome of retaliatory tariffs being imposed on wood from Canada, steel from Mexico, and even washing machines from China and South Korea. These goods on their own only make up a fraction of the global trade, but further tariff increases to each individual good (which is expected with the pulling out of the Postal Union) will further put us in a position of not having a say during the negotiating of pricing and shipping deployments, ultimately leaving your business, (or if you’re a consumer, you’re favorite shops) deciding at the heel what price they can mark their products to make a bit of their money back, or maybe even profit. The bigger conglomerates and cooperate powerhouses might balk a bit during this stage but it is fairly obvious long-running family owned businesses and the at-home shops will likely be unable to cope with these changes. How can they when they are basically depending on almost two hundred other countries deciding what they can or can’t ship in, and further even, what price those necessary goods will be dependent upon where they are geographically? Conclusion The gravity the impact of this decision will likely have if not reversed is not hard to extrapolate given the chance to think through it, but somehow, as perplexing as it is in my opinion, it is not being discussed and it has barely been covered. I feel that a decision with this much possible collateral damage being made in an effort to curtail one aspect of a flaw in current standing between two of the most massive consumer countries, resulting in our impending decision to walk away from the institution set up to somewhat normalize this access to a cog in the wheel of world trade should be taking center stage in our democratic theory and discussion, and further, should absolutely be something you’re aware of. A special thank you to Contributing Editor Candace Kaufman for the first interest behind the article and the continued source support, and support in general. Below are linked sources I either directly learned from or read whether I used the info or not. Sources
https://www.google.com/amp/s/www.theatlantic.com/amp/article/573709/ https://www.google.com/amp/s/amp.theguardian.com/us-news/2018/oct/17/trump-universal-postal-union-withdraw-foreign-postal-rates https://www.undispatch.com/trumps-decision-to-leave-the-universal-postal-union-makes-no-sense/ https://www.supplychaindive.com/news/state-department-universal-postal-union-set-own-rates/550755/ https://www.google.com/amp/s/www.vox.com/platform/amp/2018/10/19/17996378/trump-china-universal-postal-union-treaty https://www.inkstonenews.com/china/is-china-a-developed-country-long-and-better-answer/article/2160430 http://www.upu.int/en.html https://www.euractiv.com/section/global-europe/opinion/why-is-china-still-a-developing-country/ https://www.foodsafety.gov/news/fsma.html https://www.selectusa.gov/logistics-and-transportation-industry-united-states https://www.wri.org/publication/emerging-green-tariffs-us-regulated-electricity-markets https://www.tryfleet.com/blog/trump-tariffs-and-the-shipping-industry
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