. /.   WORLD TRADE  
ORGANIZATION  WT/L/667 
4 December 2006 
 (06-5796) 
General Council 
14-15 December 2006 Original:   English 
 
 
  
UNITED STATES - FORMER TRUST TERRITORY OF THE PACIFIC ISLANDS 
 
Report of the Government of the United States under the Decision of 14 October 1996
1 
 
 
 The following communication, dated 1 December 2006, is being circulated at the request of 
the Delegation of the United States.  
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Introduction 
1. On 14 October 1996, the United States was grante d a renewal of the wa iver (WT/L/183) 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 treat ment for eligible imports into the United States 
from the Marshall, Caroline and Mariana Islands (oth er than Guam), formerly part of the Trust 
Territory of the Pacific Islands (TTPI).  This waiv er expires 31 December 2006.  We expect to submit 
a request for an extension in the near future. 
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 2005 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 
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. 
                                                     
 
1 WT/L/183. WT/L/667 
Page 2  
 
  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 Northern  Mariana Islands total about US$696.3 million.  
6. The Commonwealth of the Mariana Islands, with  a far larger economy than its three island 
neighbours, is far and away the largest exporter, res ponsible for over 97 per cent of total exports to the 
United States from the former TTPI.  The Republic of  the Marshall Islands and the Federated States 
of Micronesia were the next largest exporters in 2005, followed by Palau. 
7. Structural changes in global textile trade ha ve affected US imports from these countries and 
we continue to work closely with them to  try and broaden their industrial base.   
8. The following table provides summary information on US imports from the former Trust 
Territory of the Pacific Islands for 1993-2005. 
Table 1  
 
US Imports from the Former Trust Territory of the Pacific  Islands
 
 
(Values in millions of dollars) 
 
Source 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
 
Total US Imports 
  
581  
663  
744  
795  
871  
1,013 
1,085 
1,059 
967  
856  
851  
836  
696.3
Republic of the Marshall Islands  
 11 8 11 4 7 4 10 5 6 9 9 12 17.2
Federated States of Micronesia  
 14 13 13 11 12 13 10 14 21 15 14 11 1.6 
Republic of Palau  
 1 3 6 9 13 14 16 14 15 15 2 1.5 0.5 
Commonwealth of the Northern 
Mariana Islands 308 332 428 556 799 980 1,049 1,026 925 817 826 811 677 
 
 
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