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Free Association Negotiations

While Congress was out of town in August, the Congressional Research Service produced a new report on the Compacts of Free Association (COFAs) the United States has with three Pacific island nations: the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM), and the Republic of Palau. Together these three independent nations are called the freely associated states (FAS).

The report begins with an overview of the three nations. The citizens of the freely associated states are not U.S. citizens. The United States counts on a military presence in these nations to support U.S. defense and security goals. In return for allowing this military presence and essentially relinquishing all control militarily to the U.S., the FAS have received limited economic support from the United States and access to a defined set of U.S. federal programs such as the U.S. postal service and weather service.

The details of the relationships are laid out in the articles of free association, known as Compacts of Free Association (COFAs), of the various nations. The agreements have been updated, changed and renewed over the years since they were first signed in 1982, but now the U.S. economic assistance is scheduled to expire at the end of fiscal year 2023 for the RMI and FSM and at the end of fiscal year 2024 for Palau.

Stalled negotiations

The United States began renegotiating the COFAs in 2020, but the negotiations stalled and have been suspended until recently. In February of 2022, President Biden released an Indo-Pacific Strategy saying that the U.S. will “prioritize negotiations on our Compacts of Free Association with the Freely Associated States as the bedrock of the U.S. role in the Pacific,” but there has been little progress to report since that time.

The Congressional Research Service lists a number of reasons for the stalled negotiations. One was the COVID-19 pandemic, which prevented in-person meetings on the subject.

Another issue was an attempt by the Trump administration to change the mechanism of funding. They wanted to classify the funding as discretionary spending, so that it would have to be voted on every year, rather than treated as a mandatory expense.

President Trump also failed to appoint an appropriate person with full executive power to conduct the negotiations.

Although Presdient Biden recommitted to the process, the report was clear that negotiators faced “resistance by some U.S.agencies to continue programs in the FAS due to costs.”   The pricetag for providing services to the citizens of the freely associated states – which do not qualify for expensive federal programs such as Medicaid and have a cumulative population of fewer than 200,000 people – was simply more than U.S. negotiators wanted to spend.

Restarting negotiations

In March, Biden appointed Ambassador Joseph Yun as Special Envoy for Compact Negotiations. He has met with FAS negotiators and officials from the Department of State, the Department of the Interior, and U.S. Indo-Pacific Command.

At this point, there appears to be agreement that many of the arrangements in the current compacts will stay in force. The United States will maintain a military presence in the FAS and will have veto power over decisions on security and defense made by the governments of the three sovereign nations. Citizens of the FAS may travel and work freely in the United States, may join the U.S. military. and have access to limited U.S. federal benefits.

The economic support, which is still in the process of being negotiated, is very important for the FAS. The United States provides more financial assistance to the FAS than any other nation does, though  China also contributes, particularly in the FSM.

US Compacts of Free Association: What Next?


The role of Congress

The Congressional Research Service listed a number of actions Congress might choose to take in this matter, including holding hearings and requesting reports. They also listed some issues Congress might want to consider:

  • levels of funding and types of economic assistance to be extended
  • FAS eligibility for U.S. federal programs and services
  • federal assistance for FAS migrants in U.S. states and territories
  • possible further U.S. compensation and health care assistance related to U.S. nuclear testing over the Marshall Islands

Negotiators hope to settle these questions during 2022. Puerto Rico voters considering a vote for Free Association in the proposed new plebiscite should watch the process with interest.


Read the report.

2023 update

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