Editors note: CPA has previously praised Peter Navarro‘s action fixing the requirement by the Universal Postal Union that the US subsidize the delivery of small packages coming in from China.
A recent deal to reform global mail delivery shows that a strong, principled negotiation strategy gets results.
[Peter Navarro | October 15, 2019 | NY Times]
The United States recently scored a historic victory when it overhauled a 145-year-old international organization, the Universal Postal Union, whose outdated policies were undermining American interests. This week, the White House will celebrate that deal with the union’s director general, Bishar Hussein, who will receive formal notice that the United States will remain in the organization.
This is a big deal — the union, founded in 1874, coordinates international mail delivery; when you get a postcard from your cousin traveling in France, you have the union to thank.
But the agreement is even more significant for what it demonstrates: how effective American diplomacy can be when it is strategically and forcefully deployed. The deal provides a road map for reforming other international organizations now treating the United States unfairly and in desperate need of change.
This bigger story began almost exactly one year ago, when President Trump ordered the United States to withdraw from the union within 12 months — the earliest possible withdrawal by terms of the postal union treaty. President Trump directed this exit because under the union’s antiquated “terminal dues” system, the United States Postal Service was being forced to subsidize a flood of small packages, primarily from China, at an annual cost in the neighborhood of $500 million.
This forced subsidy gave China an unfair advantage against American manufacturers and workers, while disadvantaging private carriers like FedEx and U.P.S. Incredibly, under the union’s terminal dues rules, it is cheaper to send a small package from Shanghai to New York than from Chicago.
With a year to resolve this issue, a White House-led interagency team engaged with the union’s leadership and member countries to fashion a sweeping reform of the antiquated terminal dues system. Finally, on Sept. 25 in Geneva, what seemed unimaginable in the face of strong opposition actually happened: The 192-member Universal Postal Union unanimously adopted the reform proposal. Mr. Hussein, the director general, called it “the most remarkable day in the history of the union.”
At a time when other international organizations need to adapt to the realities of the 21st century, there are several fundamental lessons for American diplomacy to be drawn from the postal victory.
First, articulate fair and principled goals. The Trump team insisted from the beginning that the outdated rate-setting system must be modernized and that all member states must have more power in setting their own postage rates.
Second, make the redline demands clear. The administration’s unwavering condition was to allow the United States Postal Service to immediately set domestic postage rates at a level sufficient to recover costs.
Third, be ready to walk if those redline conditions are not to be met. Here, it is vital to show unwavering resolve in the face of the inevitable resistance that will come from the defenders and beneficiaries of the status quo.
To demonstrate that unwavering resolve, we had to be fully prepared to exit the postal union. So even as our negotiations unfolded, we prepared to exit the agreement without disrupting international mail, particularly election and military mail. Through such meticulous preparations — which we made clear publicly and through diplomatic channels — we clearly signaled there was no hesitation in our threat to walk.
Fourth, change is rarely achieved by going it alone. Early in the negotiations, we engaged with the union’s leadership, even as we identified partners we could work with to win the reform we wanted — countries like Brazil, Canada, Iceland, Norway and South Africa were all similarly harmed by the status quo. Through intense negotiations, we built a coalition of pro-reform countries, founded on the principle that what is fair to American businesses and workers is also fair to the world.
Finally, hit back hard on those who opposed the needed reforms. An obvious antagonist was China, the biggest beneficiary of the distorted system. It tried to bully countries, particularly in Africa, to which it had lent considerable sums of money. We countered that there was much more to lose if the United States exited the postal union — and much to gain by working with a democracy rather than an authoritarian state.
A more subtle problem lay with several countries like Germany, the Netherlands and Britain. At the Geneva meeting, their powerful postal systems sought to advance narrow rent-seeking interests that clearly deviated from the broader strategic relationships the United States has with these countries. We countered by bringing this divergence to the attention of higher-ranking government officials — and putting the issue in its broader strategic perspective.
Collectively, these five lessons represent a new kind of Trumpian diplomacy that achieves results while advancing the interests of American businesses and workers across the globe. Through gritty determination and creative diplomacy, we clearly have the ability to remake and revitalize many of the antiquated international organizations that today ill serve American interests.
These international organizations should advance the interests of member states and their citizens, not perpetuate systems that disproportionately benefit some members over others or serve a narrow elite of self-interested leaders.
Peter Navarro is assistant to the president for trade and manufacturing policy.
Read the original article here.
