WORLD TRADE WT/L/234
10October 1997
ORGANIZATION(97-4363)
Original: English General Council
22October 1997
UNITED STATES -FORMER TRUST TERRITORIES OFTHE PACIFIC ISLANDS
Report oftheGovernment oftheUnited States
under theDecision of14October 19961
Thefollowing communication, dated 9October 1997, hasbeenreceived fromthePermanent
Mission oftheUnited States.
_______________
Introduction
On14October 1996, theUnited States wasgranted arenewal ofthewaiver (WT/L/183) from
itsobligations under paragraph 1ofArticle IoftheGATT 1994 totheextent necessary topermit the
United States Government toprovide preferential treatment foreligible imports intotheUnited States
from theMarshall, Caroline andMariana Islands (other thanGuam), formerly partoftheTrust
Territories ofPacific Islands (TTPI). Thiswaiver wasextended until31December 2006.
Under theterms ofthiswaiver, theUnited States isrequired tosubmit totheGeneral Council
anannual report ontheoperation ofthese preferences withaview tofacilitating theannual review
provided forinparagraph 4ofArticle IXoftheWTO Agreement. Thisreport covers calendar year
1997. Trade datahasbeenprovided forcalendar year1996, themostrecent yearforwhich full-year
dataisavailable.
Preferential Treatment fortheFormer Trust Territories ofthePacific Islands
Withtheentry-into-forcein1986oftheCovenantestablishingtheCommonwealthoftheNorthern
Mariana Islands, andtheCompacts ofFreeAssociation withtheUnited States fortheRepublic ofthe
Marshall Islands, theFederated States ofMicronesia, andin1994oftheCompact ofFreeAssociation
withtheUnited States fortheRepublic ofPalau, theTrusteeship ofthePacific Islands, established
on2April 1947, wasterminated. United States lawprovides forthecontinuation ofthepreferential
tradetreatment granted theseislands under theTrusteeship. These preferences aresimilar tohistorical
preferences theUnited States provides theUSVirgin Islands, Guam andAmerican Samoa, which were
USpossessions on1July1939 andwhich areincluded inAnnex DtoArticle IoftheGATT 1994.
Theprimary purpose ofthesystem hasbeentopromote theexpansion oftrade andtheeconomic
development ofthebeneficiaries inamanner consistent withtheobjectives oftheGATT andwiththe
trade, financial anddevelopment needs ofthebeneficiary countries.
1WT/L/183.WT/L/234
Page2
Under General Note3(a)(iv) oftheHarmonized Tariff Schedules oftheUnited States, duty-free
treatment isaccorded toallproducts oftheformer TTPI, withsome exceptions. Watches andwatch
movements, andcertain fishery products aresubject toquantity limitations, andbuttons, certain textile,
apparel, footwear andluggage products aresubject todutyinsome orallofformer TTPI. Duty-free
treatment isonlyaccorded tothein-quota quantity ofagricultural products subject toatariff-rate quota.
Performance
Averysmall volume ofproduction andtradeisinvolved inthisprogramme. Taken together,
USimports from theRepublic oftheMarshall Islands, theRepublic ofPalau, theFederated States
ofMicronesia andtheCommonwealth oftheNorthern Mariana Island totallessthan$500 million or
lessthanone-tenth of1percentofUSimports. However, theUSisanimportant market forthese
islands, asthedestination ofnearly 50percentoftotalimports.
TheCommonwealth oftheMariana Islands, withafarlarger economy thanitsthree island
neighbours, isfarandaway thelargest exporter, responsible formore than90percentoftotalexports
totheUnited States from theformer Trust Territories. TheFederated States ofMicronesia werethe
second largest exporter in1996, followed bytheRepublic ofPalau andtheRepublic oftheMarshall
Islands.
Statistical tables areprovided topresent adetailed description ofthetrade aspects ofthis
programme forthemost recent period.
Table 1provides summary information onUSimports fromtheformer Trust Territories ofthePacific
Islands from 1992-1996.
Table 2provides information onleading USimports, byHSheading, fromtheMarshall Islands, Palau
andMicronesia during 1996.
Table 3provides information onleading USimports, byproduct, fromtheMariana Islands in1996.WT/L/234
Page3
TABLE 1
USIMPORTS FROM THE FORMER TRUST TERRITORY OFTHE PACIFIC
(Values inmillions ofdollars)
USImports
Source 1992 1993 1994 1995 1996
Total USImports532,665 580,659 663,256 743,505 795,289
Republic oftheMarshall Islands 8 11 8 13 4
Federated States ofMicronesia 13 14 13 13 11
Republic ofPalau 0 1 3 6 9
Commonwealth oftheNorthern
Mariana Islands295 308 332 428 556WT/L/234
Page4
TABLE 2
LEADING USIMPORTS -1996
HSHeading Description 1996 US
Imports
($000)Source
6106100010 Men’sshirts ofcotton knit 102,635 Mariana Islands
6110202065 M/B other apparel ofcotton knit 87,837 Mariana Islands
6110202075 W/G other apparel ofcotton knit 81,639 Mariana Islands
6205202055 Men’scotton shirts nesoi notknit 28,599 Mariana Islands
6106100030 Women ’sblouses andshirts ofcotton knit 22,912 Mariana Islands
6205202050 Men’sshirts cotwith>2clrwarp ntnapd ntknit 19,015 Mariana Islands
6109100012 Men’stshirts underwear ofcotton knit 17,895 Mariana Islands
611010140 M/B sweatshirts ofother cotton knit 16,549 Mariana Islands
6204132010 Women ’ssuits synfibcont<36% wool 16,080 Mariana Islands
6203112000 M/B suits ofwool <30% silknotknit/crotched 15,137 Mariana Islands
6109100070 W/G t-shirts andtanktops, ofcotton knit 8,926 Mariana Islands
6110303050 M/B other sweathers ofother manmade fibers knit 8,017 Mariana Islands
6103421020 Men’strousers andbreeches ofcotton knit 7,106 Mariana Islands
6105 Men's/boys 'shirts 4,023 Palau
6110 Sweater,pullover,vest 3,292 Palau
6110 Sweater,pullover,vest 2,547 Micronesia
6203 Suits,ensembles,etc 2,426 Micronesia
1513 Coconut,palm,babassu 1,732 Marshall Islands
6103 Men/boy suit,ensemble 1,428 Micronesia
6201 Overcoat,etc,men/boys 1,001 Micronesia
6106 Womn/girl shirt,blous 938 Palau
6205 Men's/boys 'shirts 931 Micronesia
6101 Men/boy overcoats 860 Micronesia
6211 Track st,ski st,swimw 306 Micronesia
6204 Women/girl suits,etc 285 Micronesia
6205 Men's/boys 'shirts 257 Palau
0303 Frzn fish,not fillets 247 Micronesia
6105 Men's/boys 'shirts 243 Micronesia
0301 Live fish 177 Marshall IslandsWT/L/234
Page5
TABLE 3
LEADING USIMPORTS FROM THE COMMONWEALTH OFTHE
MARIANA ISLANDS IN1996
Product Description Value ($000)
6106100010 Men’sshirts ofcotton knit 102,635
6110202065 M/B other apparel ofcotton knit 87,837
6110202075 W/G other apparel ofcotton knit 81,639
6205202055 Men’scotton shirts nesoi notknit 28,599
6106100030 Women ’sblouses andshirts ofcotton knit 22,912
6205202050 Men’sshirts cotwith>2clrwarp ntnapd ntknit 19,015
6109100012 Men’stshirts underwear ofcotton knit 17,895
611010140 M/B sweatshirts ofother cotton knit 16,549
6204132010 Women ’ssuits synfibcont<36% wool 16,080
6203112000 M/B suits ofwool <30% silknotknit/crotched 15,137
6109100070 W/G t-shirts andtanktops, ofcotton knit 8,926
6110303050 M/B other sweathers ofother manmade fibers knit 8,017
6103421020 Men’strousers andbreeches ofcotton knit 7,106