The Universal Postal Union (UPU) reached an agreement in Geneva which allows the US to set its own inbound postage rates – meaning it will now remain in the union after threatening to leave over the issue.

More than half of the 192 member countries present voted for what is known as "option V," which allows the US to increase prices for packages arriving from other countries. In return, the US will contribute to the Union's voluntary fund, which covers security and pensions. Other countries will have the option to adjust prices on US inbound packages and other packages sent from elsewhere by set amounts from next year. 

The compromise deal was agreed by consensus at the Universal Postal Union’s emergency congress after two days of talks, with delegates standing to applaud.

It also incorporates thresholds that protect low-volume, developing countries from the any potential impacts of this rapid reform. 

At a press conference after the meeting, UPU general secretary Bishar Hussein said: "The UPU is as strong as it has always been. Today is a historical moment, where we have averted the possible exit of one of our member countries and, of course, many other disappointed countries." 

Siva Somasundram, the UPU's director for policy, regulation and markets , said: "This is a landmark decision for multilateralism and the union. The Geneva Extraordinary Congress has shown that 192 countries can reach solutions on complex issues by acclamation." 

China's delegation backed the deal, telling the talks: "For China we have always been actively working with all the members and trying to find a positive solution and compromise in the spirit of UPU."

The Trump administration served notice last October that it would leave in 12 months unless fee rates were changed so that importing countries did not lose money from distributing mail and packages from countries including China and Cambodia in the age of e-commerce.

The potential US withdrawal from UPU has been dubbed by some as "Pexit", an abbreviation for "Postal Exit".

It reflects the wider US strategy of aggressively defending its perceived trade interests.

What is the Universal Postal Union and how does it work? 

The Universal Postal Union was established by the Treaty of Bern in 1874, and is a specialized agency of the United Nations that coordinates postal policies among its member nations and other worldwide postal systems. 

It has 192 member countries and it is the main forum for coordination between postal sector players. 

UPU sets rules for international mail exchanges, recommends improvements in all sectors of the service and improves the quality of the service for customers. 

What would have been the consequences if the US had withdrawn? 

There would have been several potential consequences if the US had withdrawn from UPU. 

"Whatever happens, prices to ship via the postal network ... It's going to cost more ... The rates are going to go up," said Kate Muth, executive director of the International Mailers Advisory Group. 

Online marketplace Ebay's grassroots network also warned of possible "service disruptions and dramatically increased costs for shipping through the US postal service" if the US had decided to pull out of the union.