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Oct. 19 (NBD) -- The U.S. Wednesday began the process of withdrawing from the Universal Postal Union (UPU) that offers lower costs for foreign postal deliveries of small packages sent to the country. 

Founded in 1874, Switzerland-based UPU is known as an international postal alliance with 192 members, which allows developing countries to deliver goods around the world at cheaper prices than those shipped from developed countries.

The White House said the UPU's terms for terminal dues that the sending post office paid to the destination post office for international packages enable foreign countries to take advantage of the cheap shipments to the U.S., which is unfair for the U.S. companies.

The U.S. will seek for bilateral or multilateral negotiations over UPU rules for the postal rates during the year-long withdrawal process, the White House said in a statement.

If negotiations are successful, the administration is prepared to rescind the notice of withdrawal and remain in the UPU. 

Besides, the statement mentioned the country will adopt self-declared terminal dues rates for overseas packages under 2 kilograms no later than January 1 of 2020 regardless of the outcome of negotiations.

In fact, in an order issued early in August this year, the U.S. President Donald Trump has requested the U.S. Postal Service to cancel the discounts for international postage. He also called for renegotiations with the UPU over the rates change to prevent overseas products with low costs from flooding the U.S. market.

UPU, then, released an announcement on August 27 saying that all UPU members will discuss together about the matters such as the reimbursement model for international mail.

The exit of the U.S. is not a good signal for those countries benefiting from the UPU terms including the UK, China and Germany, industry analyst Lin Zhiyong noted.

If the UPU doesn't make any change of the rules, some other countries may also seek for self-determination of the rates, added Lin.

As one of the developing countries charged at low rates for international packages, China holds great market share in the global e-commerce market. Thus online products constitute a big part of the goods sent overseas.

It is noted that the U.S. is the biggest buyer of Chinese online products. The total sales of Chinese e-commerce platforms in the U.S. market has hit around 80 billion U.S. dollars year to date.

The White House's decision will have a big impact on China's cross-border e-commerce sector, as the costs of enterprises in the field will absolutely rise, Zhao Xiaomin, an expert in the express delivery industry, told NBD.

Industry insider pointed out the increasing postage for small packages shipped to the U.S. will indirectly enhance the competiveness of American goods. 

NBD noticed that stocks of several Chinese e-commerce enterprises and delivery companies saw decline in prices after the U.S.'s announcement.

Shares of e-commerce giant JD.com (NASDAQ:JD) decreased by 3.86 percent to close at 23.68 U.S. dollars on Wednesday, and logistics company ZTO Express' (NASDAQ:ZTO) stock plunged by 4.2 percent on the same day, marking the biggest drop over the past four weeks.

Email: zhanglingxiao@nbd.com.cn