WORLD TRADE
ORGANIZATIONWT/L/287
27 November 1998
(98-4774)
General Council
9 - 11 December 1998Original:  English
UNITED STATES – FORMER TRUST TERRITORIES OF THE PACIFIC ISLANDS
Report of the Government of the United States
under the Decision of 14 October 19961
The following communication, dated 19 November 1998, has been received from the Permanent
Mission of the United States.
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Introduction
On October 14, 1996, the United States was granted a renewal of the waiver (WT/L/183) from its
obligations under paragraph 1 of Article I of the GATT 1994 to the extent necessary to permit theUnited States Government to provide preferential tr eatment for eligible imports into the United States
from the Marshall, Caroline and Mariana Islands (other than Guam), formerly part of the Trust Territories
of Pacific Islands (TTPI).  This waiver was extended until 31 December 2006.
Under the terms of this waiver, the United States is required to submit to the General Council an
annual report on the implementation of the trade-related provisions of the program with a view to
facilitating the annual review provided for in paragraph 4 of Article IX of the WTO Agreement.  Thisreport covers calendar year 1998.  Trade data has been provided for calendar year 1997, the most recent
year for which full-year data is available.
Preferential Treatment for the Former Trust Territories of the Pacific Islands
With the entry-into-force in 1986 of the Cove nant establishing the Commonwealth of the
Northern Mariana Islands, and the Compacts of Free Association with the United States for the Republic
of the Marshall Islands, the Federated States of Micronesia, and in 1994 of the Compact of Free
Association with the United States for the Republic of Palau, the Trusteeship of the Pacific Islands,
established on 2 April 1947, was terminated.  U.S. law provides for the continuation of the preferentialtrade treatment granted these islands under the Trusteeship.  These preferences are similar to historical
preferences the United States provides the U.S. Virgin Islands, Guam and American Samoa, which were
U.S. possessions on July 1, 1939 and which are included in Annex D to Article I of the GATT 1994. The
                                                     
1 WT/L/183.WT/L/287
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primary purpose of the system has been to promote the expansion of trade and the economic development
of the beneficiaries in a manner consistent with the objectives of the GATT and with the trade, financialand development needs of the beneficiary countries.
Under General Note 3(a)(iv) of the Harmonized Tariff Schedules of the United States, duty-free
treatment is accorded to all products of the form er TTPI, with some exceptions.  Watches and watch
movements, and certain fishery products are subject to quantity limitations, and buttons, certain textile,apparel, footwear and luggage products are subject to duty in some or all of former TTPI.  Duty-free
treatment is only accorded to the in-quota quantity of agricultural products subject to a tariff-rate quota.
Performance
A very small volume of production and trade involved in this program.  Taken together, U.S.
imports from the Republic of the Marshall Islands, the Republic of Palau, the Federated States ofMicronesia and the Commonwealth of the Northern Mariana Islands total less than $850 million or less
than one-tenth of one percent of U.S. imports.  However, the U.S. is an important market for these
islands, as the destination of nearly fifty percent of total exports.
The Commonwealth of the Mariana Islands, with a far larger economy than its three island
neighbors, is far and away the largest exporter, responsible for more than ninety percent of total exports to
the United States from the former Trust Territories. The Federated States of Micronesia were the second
largest exporter in 1997, followed by the Republic of Palau and the Republic of the Marshall Islands.
Statistical tables are provided to present a detailed description of the trade aspects of the TTPI
program for the most recent period.
Table 1 provides summary information on U.S. imports fro m the former Trust Territories of the Pacific
Islands from 1992-1997.
Table 2  provides information on leading U.S. imports, by HS heading, from the Marshall Islands, Palau
and Micronesia during 1997.
Table 3  provides information on leading U.S. imports, by product, from the Mariana Islands in 1997.WT/L/287
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Table 1
US Imports from the former Trust Territory of the Pacific
(Values in millions of dollars)
U.S. Imports
Source 1992 1993 1994 1995 1996 1997
Total U.S. Imports532,665 580,659 663,256 743,505 795,289 870,671
Republic of the Marshall Islands 8 1 18 1 347
Federated States of Micronesia 13 14 13 13 11 12
Republic of Palau 01369  1 3
Commonwealth of the Northern
Mariana Islands295 308 332 428 556 799WT/L/287
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Table 2
Leading U.S. Imports from Palau, Marshall Islands and Micronesia in 1997
HS
HeadingProduct Description Source1997 U.S.
Imports
($000)
61051000 Men's or boys' shirts, knitted or crocheted, of cotton Palau 9,812
15131100 Coconut (copra) oil, crude, and its fractions, not chemically modified Marshall Is 2,480
62034335Men's or boys' trousers and breeches, not knitted or crocheted, of synthetic
fibers, nesoi, water resistantMicronesia 2,417
61102020 Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi Palau 2,052
61102020 Sweaters, pullovers and similar articles, knitted or crocheted, of cotton, nesoi Micronesia 1,732
62019330Men's or boys' anoraks, windbreakers and similar articles, not knitted orcrocheted, of manmade fibers, nesoi, water resistantMicronesia 941
61046220 Women's or girls' trousers, breeches and shorts, knitted or crocheted, of cotton Micronesia 876
61103030Sweaters, pullovers and similar articles, knitted or crocheted, of manmadefibers, nesoiPalau 764
61103030Sweaters, pullovers and similar articles, knitted or crocheted, of manmade
fibers, nesoiMicronesia 661
62044230 Women's or girls' dresses, not knitted or crocheted, of cotton, nesoi Micronesia 569
3034300Skipjack or stripe-bellied bonito, fro zen, excluding fillets, other meat portions,
livers and roesMicronesia 493
62034240Men's or boys' trousers and shorts, not bibs, not knitted or crocheted, of cotton,
not containing 15% or more by weight of down, etcMicronesia 363
61091000T-shirts, singlets, tank tops and sim ilar garments, knitted or crocheted, of
cottonMicronesia 322
61061000 Women's or girls' blouses and shir ts, knitted or crocheted, of cotton Micronesia 309
61142000 Garments nesoi, knitted or crocheted, of cotton Micronesia 287
62113300Men's or boys' track suits or other garm ents nesoi, not knitted or crocheted, of
man-made fibersMicronesia 280
61112060Babies' garments and clothing accessories, knitted or crocheted, of cotton,nesoiMicronesia 256
61051000 Men's or boys' shirts, knitted or crocheted, of cotton Micronesia 246
61091000T-shirts, singlets, tank tops and sim ilar garments, knitted or crocheted, of
cottonPalau 218WT/L/287
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62034340Men's or boys' trousers, breeches & shorts, of synthetic fibers, con under 15%
wt down etc, cont under 36% wt wool, n/water resist, not k/cMicronesia 201
62032300 Men's or boys' ensembles, not knitted or crocheted, of synthetic fibers Micronesia 192
12030000 Copra Marshall Is 156WT/L/287
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Table 3
Leading U.S. Imports from the Commonwealth of the Mariana Islands in 1997
Product Description Value ($000)
6110202075 W/G other apparel of cotton knit 160,703
6110202065 M/B other apparel of cotton knit 145,864
6105100010 Men’s shirts of cotton knit 114,339
6106100010 Women’s blouses and shirts of cotton knit 37,723
6205202065 Men’s cotton shirts nesoi not knit 25,405
6110202040 M/B sweatshirts of other cotton knitted 22,474
6110303050 M/B other sweaters of other manmade fibers knit 19,985
6203112000 M/B suits of wool <30% silk not knit/crotched 18,968
6105202010 Men’s shirts of other manmade fiber 13,973
6110303055 W/G other sweaters of other manmade fibers knit 13,097
6205202050 Men’s shirts cot with >2 clr warp nt napd nt knit 12,506
6204393010 Women’s suit-type jacket art fib>36% wool nt kt 11,790
6109100012 Men’s tshirts underwear of cotton knit 10,819
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