RESTRICTED
WORLD TRADE G/C/W/53
4September 1996
ORGANIZATION(96-3471)
COUNCIL FOR TRADE INGOODS
19September 1996
FORMER TRUST TERRITORY OFTHE PACIFIC ISLANDS
Draft Decision
Taking noteoftherequest oftheGovernment oftheUnited States foranextension ofthewaiver
from itsobligations under paragraph 1ofArticle IoftheGeneral Agreement1which wasgranted by
theCONTRACTING PARTIES oftheGATT 1947on8September 1948forprovision ofpreferential
treatment foreligible imports intotheUnited States fromtheMarshall, Caroline andMariana Islands
(other thanGuam);
Recognizing thatthese islands wereformerly heldbyJapan under mandate andbyagreement
withtheSecurity Council oftheUnited Nations approved on2April 1947, were placed under the
trusteeship system oftheUnited Nations withtheUnited States astheAdministering Authority;
Recognizing further that,withtheentry-into-force in1986 oftheCovenant establishing the
Commonwealth oftheNorthern Mariana Islands, andtheCompacts ofFreeAssociation withtheUnited
States fortheRepublic oftheMarshall Islands, theFederated States ofMicronesia, andin1994 of
theCompact ofFreeAssociation withtheUnited States] fortheRepublic ofPalau, theTrusteeship
ofthePacific Islands wasterminated;
Considering further that,since theestablishment ofthetrusteeship under theadministration
oftheUnited States, andcontinuing under theCovenant andCompacts ofFreeAssociation, theexports
ofsuchislands havebeenentitled topreferential treatment inthemarket oftheUnited States, upon
which suchexports aresubstantially dependent;
Considering alsothatthepreferential treatment provided totheseislands isdesigned topromote
theexpansion oftrade andeconomic development ofthebeneficiaries inamanner consistent withthe
objectives oftheGATT 1994andwiththetrade, financial anddevelopment needs ofthebeneficiaries,
andnottoraisebarriers ortocreate difficulties fortrade ofother Members;
Considering further thatsystem ofpreferential entry intothemarket oftheUnited States has
not,inviewofthenature andsmall volume oftheproduction andtradeinvolved andoftheunderlying
economic factors affecting suchproduction andtrade, resulted insubstantial injury tothetradeofany
ofthemembers andisnotlikely todosointhefuture;
Recognizing that,asprovided forinparagraph 2oftheUnderstanding inRespect ofWaivers
ofObligations under theGeneral Agreement onTariffs andTrade 1994,unless extended, thewaiver
of8September 1948 willexpire on31December 1996;
1G/L/101
./.G/C/W/53
Page2
Noting, furthermore, theassurances given bytheUnited States Government thatitwill,upon
request, promptly enter intoconsultations withanyinterested Member withrespect toanydifficulty
ormatter thatmayariseasaresult oftheimplementation ofpreferential treatment forthebeneficiaries;
and
Having regard totheGuiding Principles tobefollowed inconsidering applications forwaivers
adoptedon1November1956,theUnderstandinginRespectofWaiversofObligationsundertheGeneral
Agreement onTariffs andTrade 1994, andparagraphs 3and4ofArticle IXoftheMarrakesh Agreement
Establishing theWorld Trade Organization (hereinafter "WTO Agreement");
Members,actingpursuanttotheprovisionsofparagraph3ofArticleIXoftheWTOAgreement,
Decide that:
1. Subject totheterms andconditions setouthereunder, theprovisions ofparagraph 1ofArticle I
oftheGATT 1994 shallbewaived until31December 2006, totheextent necessary topermit the
United States Government toaccord preferential treatment toeligible products oftheRepublic ofthe
Marshall Islands, theFederated States ofMicronesia, theCommonwealth oftheNorthern Mariana
Islands, andtheRepublic ofPalau imported intothecustoms territory oftheUnited States without
obligation thereby toextend thesame treatment tothelikeproducts oftheother members.
2. Suchpreferential treatment shallbedesigned nottoraisebarriers orcreate undue difficulties
forthetrade ofother Members.
3. TheGovernment oftheUnited States willsubmit totheGeneral Council anannual report on
theoperation ofthesepreferences withaviewtofacilitating theannual review provided forinparagraph
4ofArticle IXoftheWTO Agreement.
4. TheUnited States Government will,uponrequest, promptly enterintoconsultations withany
interestedMemberwithrespecttoanydifficultyormatterthatmayariseasaresultoftheimplementation
ofthese preferences; where aMember considers thatanybenefit accruing toitunder theGATT 1994
maybeorisbeing impaired unduly asaresult ofsuchimplementation, suchconsultation shallexamine
thepossibility ofaction forasatisfactory adjustment ofthematter. ThisDecision doesnotaffect
Members ’rights assetforthintheUnderstanding inRespect ofWaivers ofObligations under theGATT
1994.