WORLD TRADE  
ORGANIZATION  WT/L/798 
22 June 2010 
 (10-3386) 
General Council 
29-30 July 2010 Original:   English 
 
 
 
UNITED STATES - FORMER TRUST TERRITORY OF THE PACIFIC ISLANDS  
 
Report of the Government of the United States under the Decision of 27 July 20071 
 
 
 The following communication, dated 18 June 2010,  is being circulated at the request of the 
Delegation of the United States.  
_______________ 
 
 
Introduction 
1. On 27 July 2007, the United States was grante d a renewal of the waiver (WT/L/183) from its 
obligations under paragr aph 1 of Article I of the GATT 1994 to the extent necessary to permit the 
United States Government to provide preferential treat ment for eligible imports into the United States 
from the Republic of the Marshall Islands, the Federate d States of Micronesia, the Republic of Palau, 
and the Commonwealth of the Northern Mariana Islands , formerly part of the Trust Territory of the 
Pacific Islands (TTPI).
2  This waiver expires 31 December 2016. 
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 pr ovided for in paragraph 4 of Artic le IX of the WTO Agreement.  
This report covers the calendar year 2009 and trade data has been provided for that calendar year, the 
most recent year for which full-year data is available. 
Preferential Treatment for the Former Tr ust Territory of the Pacific Islands 
3. With the entry into force in 1986 of the Covenant establishing the Commonwealth of the 
Northern Mariana Islands, and the Compacts of Fr ee Association with the United States for the 
Republic of the Marshall Islands, th e Federated States of Micronesia, and in 1994 of the Compact of 
Free Association with the United States for the Re public of Palau, the Trusteeship of the Pacific 
Islands, established on 2 April 1947, was terminated.  US law provides for the continuation of the 
preferential trade treatment granted these islands unde r the Trusteeship.  These preferences are similar 
to historical preferences the United States provides the US Virgin Islands, Guam and American 
Samoa, which were US possessions on 1 July 1939, a nd which are included in Annex D to Article I of 
the GATT 1994.  The primary purpose of this preferen ce system has been to promote the expansion of 
                                                      
1 WT/L/694. 
2 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 
Micronesia.  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 Stated of Micronesia, and Republic of Palau), and one commonwealth in 
political union with the United States (Commonwealth of the Northern Mariana Islands).  WT/L/798 
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  trade and the economic development of the beneficiar ies in a manner consistent with the objectives of 
the GATT and with the trade, financial and deve lopment needs of the beneficiary countries. 
4. Under General Notes 3(a)(iv) and 10 of the Ha rmonized Tariff Schedule of the United States, 
duty-free treatment is accorded to all products of the former 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 the former 
TTPI.  Duty-free treatment is only accorded to the in-quota quantit y of the agricultural products 
subject to a tariff-rate quota.   
Performance 
5. A very small volume of production and trade is involved in this progra mme.  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 Nort hern Mariana Islands in 2009 total about 
US$23 million. 
6. Total US imports from the former TTPI decreased in 2009 from 2008 by $106 million.  This 
decrease represents a continuation of a longer term  trend of decreased US imports from the former 
TTPI (see table 1).  This decrease has occurred mainly because of reduced US imports from the 
Commonwealth of the Northern Mariana Islands due to structural changes in global textile and 
apparel trade.  We continue to work closely with  the former TTPI to try and broaden their industrial 
base. 
7. The Republic of the Marshall Islands was the la rgest exporter, responsible for roughly 60 
percent of total exports to the United States from the former TTPI in 2009.  The Commonwealth of 
the Northern Mariana Islands and the Federated Stat es of Micronesia were the next largest exporters 
in 2009, followed by the Republic of Palau.      
8. The following table provides summary information on US imports from the former Trust 
Territory of the Pacific Islands for 1995-2009.  
   WT/L/798
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TABLE 1 
 
US Imports from the Former Trust Territory of the Pacific Islands  
 
(Values in millions of dollars) 
 
__________ 
 
 Source 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total US Imports 458 580 831 1098 1085 1059 990 856 869 834.1 698.5 514 335.4 129 23.08
Republic of the Marshall Islands 1 1474 1 0569 2 7 1 2 1 7 1 4 1 2 1 9 1 4
Federated States of Micronesia 13 11 12 13 10 14 21 15 14 11 2 1 4 4 3
Republic of Palau 6 9 13 14 16 14 15 15 2 0.1 0.5 1 0.4 1 0.08
Commonwealth of the Northern
Mariana Islands428 556 799 1067 1049 1026 948 817 826 811 679 498 319 105 6