Donald Trump’s threat to pull the United States out of the global postal system could lead to a “nightmare scenario” of mail going undelivered, packages piling up and American stamps no longer being recognised abroad, the UN postal agency has warned.

The Universal Postal Union (UPU) has been holding an emergency meeting in Geneva to persuade Washington not to follow through on a threat to quit the agency, which sets rules to ensure mail gets delivered around the globe.

The Trump administration says it wants to charge other countries more than UPU rules now permit to have letters and packages delivered in the United States, arguing that the current system unfairly benefits China.

It has set a deadline of next month for rates to be raised or it will quit.

“It is really a nightmare scenario,” the UPU’s secretary-general, Bishar Hussein, told a news conference, noting that no country had ever left since the agency was founded nearly 150 years ago. It now has 192 members.

“If the United States leaves, you’ll get those piles, because somehow every country has to figure out how to send mail to the United States… A major disruption is on the way if we don’t solve the problem today.”

Were the United States to quit the UPU, US stamps would no longer be valid abroad, he said. He said he was “very optimistic” that a compromise could be reached.

“A departure of the United States from the union would mean there is a total disruption of the service to the country,” Hussein said.

The UPU is one of the oldest international organisations, set up in 1874 to ensure that mail could be delivered anywhere on earth. It establishes a system for calculating the fees, known as “terminal dues”, that countries collect from each other to deliver mail that arrives from abroad.

Washington says the fees are too low, which unfairly benefits exporters from countries such as China, who can send goods ordered online to US customers while the US Postal Service bears part of the cost of delivering them.

White House trade adviser Peter Navarro, who heads the U.S. delegation, called for fixing a system “that everyone in this room knows is broken”.

“The mission here today is to retool this system for the brave new world of e-commerce,” he told the three-day talks.

Navarro said the system meant the US Postal Service was effectively spending $300m-$500m to subsidise the cost of delivering imports, including counterfeit goods and drugs mailed to the United States from China.

Warnings have also been sounded about the implications for US military members abroad sending packages home, and for Americans abroad wanting to vote by postal ballots.

Hussein said he was “very optimistic that we are going to find a solution”.

“We have a track record of solving things. We have survived two world wars, and the United Postal Union has always really reinvented itself.”