WT/L/1018  
 
8 November 2017  
(17-6060) Page: 1/3 
General Council  
30 November - 1 December 2017  Original: English  
 
UNITED STATES – FORMER TRUST TERRITO RY OF THE PACIFIC IS LANDS  
REPORT OF THE GOVERN MENT OF THE UNITED S TATES FOR THE YEAR 2 016 
UNDER THE DECISION O F 7 DECEMBER 20161 
The following communication, dated 3 November 2017 , 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, and the Commonwealth of the Northern Mariana Islands, 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 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 programme with a 
view to facilitating the annual review provided for in paragraph 4 of Article IX of the WTO 
Agreement.  This report covers the calendar year 2016 and trade data has been provided for that 
calendar year, the most recent year for which full -year data is available.  
2  PREFERENTIAL TREATME NT FOR THE FORMER TR UST 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 Fre e 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, terminated the Trusteeship of the 
Pacific Islands, established on 2 April 1947. US law provides for the extension of the preferential 
trade treatment to these entities which were granted these islands under the TTPI. These 
preferences are similar to historical preferences the United States provide s the US Virgin Islands, 
Guam and American 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 ec onomic development of the beneficiaries in a manner 
consistent with the objectives of the GATT and with the trade, financial and development needs of 
the beneficiary countries.  
                                                
1 WT/L/ 1000. 
2 WT/L/18 3. 
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 Ocean region around Guam known as 
Micrones ia.  With the expiration in 1986 of the U.N. -mandated TTPI which was administered by the United 
States for roughly 40 years, these islands formed into four political entities, three independent nations 
(Republic of the Marshall Islands, Federated State s of Micronesia, and Republic of Palau), and one 
commonwealth in political union with the United States (Commonwealth of the Northern Mariana Islands).   WT/L/1018  
 
- 2 - 
 
  Under General Notes 3(a)(iv) and 10 of the Harmonized Tariff Schedule of the Un ited 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 lugg age products are subject 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 invol ved 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 2016 total about 
US$46.7  million.  
3.2.  From 2015 to 20 16, total US imports from the fo rmer TTPI increased by about 46% , from 
approximately $32.1  million to approximately $46.7 million. During the past year, US imports from 
the Federated States of Micronesia and the Commonwealth of the Northern Mariana Islands  fell 
slightly, while US imports from the remaining beneficiaries increased substantially.   
3.3.  The Republic of the Marshall Islands was the largest exporter, res ponsible for approximately 
93.3%  of total exports to the United States from the former TTPI in 20 16. The Commonwealth of 
the Northern Mariana Islands and the Republic of Palau were the next largest exporters in 2016, 
followed by the Federated States of Micronesia. The following table provides summary information 
on US  imports from the former TTPI for 2002-2016.  
 
 
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  WT/L/1018  
 
- 3 - TABLE 1  
US IMPORTS FOR CONSU MPTION FROM THE FORM ER TRUST TERRITORY O F THE PACIFIC ISLAND S, BY SOURCES, 2002 -2016 
Source  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  2012  2013  2014  2015  2016  
 Value (1,000 dollars)  
Republic of the Marshall 
Islands  9,424  27,109  11,250  17,205  14,521  13,138  20,219  13,650  11,820  14,939  18,947  16,966  14,481  29,067  43,550  
Federated States of 
Micronesia  15,217  14,347  11,415  1,558  885 4,069  3,552  2,918  4,218  1,602  904 1,787  
 412 713 536 
Republic of Palau  15,492  1,633  162 485 605 386 1,138  80 148 210 455 350 555 544 1,067  
Commonwealth of the 
Northern Mariana Islands  816,959  826,123  811,020  679,560  498,362  319,171  105,299  5,959  1,163  627 1,581  923 900 1,804  1,545  
Total 857,092  869,212  833,847  698,807  514,374  336,764  130,209  22,607  17,349  17,378  21,887  20,025  16,301  32,074  46,698  
 
 
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