WT/L/1118  
 
22 October 2021  
(21-8011) Page: 1/3 
General Council  
22-23 November 2021  Original: English  
 
UNITED STATES – FORMER TRUST TERRITORY OF THE PACIFIC ISLANDS  
REPORT OF THE GOVERNMENT OF THE UNITED STATES FOR THE YEAR  2020 
UNDER THE DECISION OF 7 DECEMBER  20161 
The following communication, dated 19 October  2021, is being circulated at the request of the 
Delegation of the United States.  
 
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1  INTRODUCTION  
1.1.  On 7  December  2016, the United States was granted a renewal of the waiver2 from its 
obligations under paragraph 1 of Article I of the GATT  1994 to the extent necessary to permit the 
United  States Government to provide preferential treatment for eligible imports into the United 
States from the Republic of the Marshall Islands, the Federated States of Micronesia, the Republic 
of Palau, three sepa rate sovereign  countries, and the Commonwealth of the Northern Mariana 
Islands, an insular territory of the United States,  all formerly part of the Trust Territory of the Pacific 
Islands (TTPI).3 This waiver expires  31 December  2026.  
1.2.  Under the terms of th is 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 programme with a 
view to facilitating the annual review provided for in paragraph 4 of Article IX of the  Agreement 
establishing the WTO.4 This report covers the calendar year 2020, the most recent year for which 
full-year data is available.  
2  PREFERENTIAL TREATMENT FOR THE FORMER TRUST TERRITORY OF THE PACIFIC 
ISLANDS  
2.1.  In 1986, the entry into force of the Covenant establishing the Commonwealth of the Northern 
Mariana Islands, the Compacts of Free Association Between the United States and the Republic of 
the Marshall Islands, and Between the United States and the Federate d States of Micronesia, and, 
in 1994, of the Compact of Free Association Between the United States and the Republic of Palau, 
terminated the applicability of the Trusteeship Agreement for the Territory of the Pacific Islands, 
 
1 WT/L/1000.  
2 WT/L/183.  
3 These four entities formerly comprised the three geographic island groups known as the Marshall, 
Caroline, and Mariana Islands, which are located in the western Pacific O cean region and known as the 
Micronesian region.  During 1986, the Covenant establishing the Commonwealth of the Northern Mariana 
Islands ("CNMI") ("Covenant"), an insular area of the United States, and Compacts of Free Association 
("Compacts") with the Un ited States for the Republic of the Marshall Islands (RMI), and the Federated States of 
Micronesia (FSM) came into effect. With the entry into force of the Covenant with CNMI and the Compacts with 
the RMI and FSM, and the agreement of the Trusteeship Counc il of the United Nations, the UN Security Council 
determined that the applicability of the Trusteeship Agreement with respect to the RMI and FSM had 
terminated. In 1994, the Compact of Free Association with the United States for the Republic of Palau came 
into effect. With the entry into force of the Compact with Palau and the agreement of the Trusteeship Council 
of the United Nations, the UN Security Council determined that the applicability of the Trusteeship Agreement 
with respect to Palau had been termi nated.  
4 Marrakesh Agreement Establishing the World Trade Organization (WTO), consulted at: 
https://www.wto.org/english/docs_e/legal_e/04 -wto_e.htm .  WT/L/1118  
 
- 2 - 
 
  established on 2  April 1947, w ith respect to these islands. US law provides for the continuation of 
the preferential trade treatment to the islands under the TTPI. These preferences are similar to 
historical preferences the United States provides to the US  Virgin Islands, Guam, and Ame rican 
Samoa, which were US possessions on 1  July 1939, and which are included in Annex D to Article I 
of the GATT  1994. The primary purpose of this preference system has been to promote the 
expansion of trade and the economic development of the beneficiari es in a manner consistent with 
the objectives of the GATT and with the trade, financial, and development needs of the beneficiary 
countries and territories.  
2.2.  Under General Notes 3(a)(iv) and 10 of the Harmonized Tariff Schedule of the United States, 
duty-free treatment is accorded to all products of the former TTPI, with some exceptions. Certain 
fishery products are subject to quantity limitations, while watches and watch movements, and 
buttons, certain textile, apparel, footwear and luggage products are sub ject to duty in some or all 
of the former TTPI. Duty -free treatment is only accorded to the in -quota quantity of the agricultural 
products subject to a tariff -rate quota.  
3  PERFORMANCE  
3.1.  A very small volume of production and trade is involved in this program. Taken together, 
US imports from the Republic of the Marshall Islands, the Republic of Palau, the Federated States of 
Micronesia, and the Commonwealth of the Northern Mariana Islands in 2020 totalled about 
US$37  million.  
3.2.  From 2019 to 2020, total US imports from the former TTPI increased by about 152 per cent, 
from approximately US$14.6  million to approximately US$36.7 million. During the past year, 
US imports from the Republic of Palau dropped by 69 percent from US$1.4 million in 2019 to US$458 
thousand in 2 020, while imports from the Republic of the Marshall Islands increased from US$10.5 
million to US$30.8, or 193 per cent over the same period of time.  Imports from the Federal States 
of Micronesia increased by approximately 78 per cent from about US$1.6 mi llion in 2019 to about 
US$2.8 million in 2020. Imports from the Commonwealth of the Northern Mariana Islands also 
increased from US$1 million in 2019 to about US$2.7  million in 2020.  
3.3.  The Republic of the Marshall Islands was the largest exporter, responsibl e for approximately 
84 per cent of total exports to the United States from the former TTPI in 2020. The Federal States 
of Micronesia and the Northern Mariana Islands were the next largest exporters in 2020, followed 
by the Republic of Palau. The following table provides summary information on US  imports from the 
former TTPI for 2006 -2020.  
 
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  WT/L/1118  
 
- 3 - TABLE 1  
US IMPORTS FOR CONSUMPTION FROM THE FORMER TRUST TERRITORY OF THE PACIFIC ISLANDS, BY SOURCES, 200 6-2020 
Source  2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 
 (1,000 d (1,000 dollars ) 
Republic of the Marshall 
Islands  14,521  13,138  20,219  13,650  11,820  14,939  18,947  16,966  14,481  29,067  39,347  35,364  20,961  10,524  30,825  
Federal States of 
Micronesia  885 4,069  3,552  2,918  4,218  1,602  904 1,787  412 713 536 921 854 1,558  2,770  
Republic of Palau  605 386 1,138  80 148 210 455 350 555 545 1,067  574 1,306  1,474  458 
Commonwealth of the 
Northern Mariana Islands  498,362  319,171  105,299  5,959  1,163  627 1,581  923 900 1,804  1,545  2,672  2,428  1,031  2,691  
Total 514,374  336,764  130,209  22,607  17,349  17,378  21,887  20,025  16,348  32,129  42,494  39,530  25,549  14,586  36,745  
 
 
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