Cut the U.S. Mail Subsidy for Chinese Products

U.S. public policy needs to ease the current economic woes by reworking the international e-commerce system now — a system that currently gives Chinese products artificially lower shipping prices. Here is an explanation of the issue:

As fears of recession persist and supply chain constraints remain elevated, consumer markets are in increasingly vulnerable positions. Broadscale demand across a variety of sectors has subsided and it will be immensely important to mitigate the challenges ahead. With this is mind, U.S. leaders must ensure that intelligent international economic and logistics measures are fully mobilized, as soon as possible, to support stable consumption.

American Consumer Institute, among many consumer advocates have expressed the depths of the ongoing challenges and the need to resolve availability, affordability and accessibility of the products we depend on. The demand for solutions is also underscored by the Treasury’s August report that prices for core goods “remain stubbornly high.” The Administration’s assessment rests on the fact that elevated inflation that has “yet to show clear signs of easing.”

While Congress has dramatically increased government spending, despite notable consequences, there is now a clear need to focus on policymaking that isn’t purely reliant on the taxpaying public. Commonsense reforms to resolve asymmetrical, cartel-style accords at the international level are likely far more agreeable to both sides of the aisle than ever before. This is especially true considering America’s robust and ubiquitous participation within these international agreements.

To its credit, the U.S. Department of State has been mobilizing a reform proposal to modify the systems for international postal and delivery services. Presumably, this plan would be ushered for consideration by the Universal Postal Union (UPU), the international governing body of logistics systems for 192 nations. While the status of the Department’s efforts is unknown, the antiquated approach of forging bilateral postal agreements remains in perpetuity. Failure to rectify this system in recent years has resulted in a myriad of complications, including disproportionate cost pressures hindering senders, producers, postal systems and many countries, including the US.

In contrast, corporations and postal systems abroad constitute what is largely akin to a cartel of applying arbitrary financial arrangements and predatory pricing. Among the apparent cases, China has been categorized as a “transition” nation, a designation that confers economic advantages in the form of continued subsidization of mail and package delivery. Such advantages are weighed against the UPU’s “target” countries that are positioned to absorb higher shares of costs of the global delivery system.

The challenging landscape underlines the overall importance of the U.S. delegation’s reform measures.  If articulated promptly, the new tenets are sure to be met with concurring opinions by nations that also endure the same consequences of the discriminatory rate structure. 

The timing of the advancement of the U.S. proposal must reflect the long overdue inequities, as well as imminent economic circumstances that are likely to exact stifling ripple effects. All possible solutions and preparations must be on the table as the upcoming peak delivery season introduces new volatility to supply chain capacities.

The US delegation is further supported by the analysis of U.S. Postal regulators and their guidance to seek altered compensatory systems, and also enhance transparency surrounding service performance improvements. Surely, good-faith renewal of trust in the international system will invite broader participation by end users and private stakeholders. Revised UPU rules that boost private shipping service involvements also stand to introduce efficiencies and unwind the archaic means of transporting goods. Crucial and timely responses to prevailing market conditions in global logistics are among the most apt tools at our disposal to deliver consistent downstream benefits to consumer interests and uniformly across American industries.

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