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1 1 (March 17, 2023)

handle is hein.crs/govekxu0001 and id is 1 raw text is: Congress bna Res arch Service Intorrniino t[ Aecislatve debat snce 1914 Updated March 17, 2023 The Compacts of Free Association Overvew The Compacts of Free Association govern the relationships between the United States and the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM), and Republic of Palau. The Marshall Islands, Micronesia, and Palau were districts of the former U.S.-administered United Nations Trust Territory of the Pacific Islands, established after World War II, and later became sovereign countries in free association with the United States. The Compacts grant the United States the prerogative to operate military bases in the RMI, FSM, and Palau (known collectively as the Freely Associated States, or FAS) and make decisions related to their external security, and they entitle the FAS to U.S. security guarantees and economic assistance. Citizens of the FAS have the right to reside and work in the United States and its territories as lawful non-immigrants or habitual residents. More than 94,000 FAS citizens live in the United States, including children under age 18 who were born in the United States and hold dual citizenship. The FAS do not have their own militaries, and FAS citizens are eligible to join the U.S. military; several hundred FAS citizens currently serve in the U.S. Armed Forces. The three Compact countries cover a maritime area larger than the continental United States, govern over 1,000 islands and atolls, and have a combined population of approximately 200,000. The FAS economies face structural challenges similar to many other Pacific Island counties (PICs), including lack of economies of scale, small land areas, limited natural and human resources, remote locations, poor infrastructure, and vulnerability to climate change. The Marshall Islands, Micronesia, and Palau rank 163rd, 193rd, and 119th, respectively, out of 229 countries by gross domestic product per capita. Located roughly 2,500 miles southwest of Hawaii, the FAS play a role in supporting the U.S. security presence in the Pacific Islands region at a time of increasing strategic competition between the United States and its allies, on one hand, and the People's Republic of China (PRC), on the other. The Biden Administration's Indo-Pacific Strategy, released in February 2022, articulates U.S. goals in the Pacific Islands region, and refers to the Compacts of Free Association as the bedrock of the U.S. role in the Pacific. Compact Negotiations Economic assistance pursuant to Title II of the Compacts of Free Association is set to expire at the end of FY2023 for the Marshall Islands and Micronesia and at the end of FY2024 for Palau. Compact provisions related to defense, security, migration, and other areas are to continue unchanged. Such assistance, also referred to as grant assistance, is currently funded and administered through the Department of the Interior (DOI). The FAS are also eligible for some U.S. federal programs and services. The United States, led by Special Envoy for Compact Negotiations Joseph Yun, and each of the FAS aim to complete bilateral negotiations to renew economic assistance by May 2023. U.S. negotiating teams have included officials from the Departments of State, the Interior, and Defense. Once negotiators reach bilateral agreements to extend Compact assistance, the President is to submit draft legislation to Congress and both houses of Congress are to approve them through implementing legislation. In January and February 2023, the United States signed memoranda of understanding with all three Compact countries on the basic levels and types of Compact assistance for the next 20 years. Figure I. The Freely Associated States Sources: CRS. Information from Esri and U.S. Department of State. The Marshall Islands, Micronesia, and Palau signed Compacts of Free Association with the United States in 1982. The Compacts were approved by plebiscites in the Marshall Islands and Micronesia and by the U.S. Congress in 1985 (P.L. 99-239), becoming effective in 1986. In 1986, Palau and the United States signed a 50-year Compact of Free Association. The Palau Compact was approved by Congress (P.L. 99-658 and P.L. 101-219), but not ratified in Palau until 1993 (entering into force in 1994, with U.S. assistance beginning in 1995). Each Compact included economic assistance that would expire after 15 years. Although negotiations to renew the economic assistance provisions of the Compacts between the United States and the RMI and FSM were not completed before the end of the first Compact term (1986-2001), grant assistance continued while negotiations went on. Following the completion of negotiations in 2003, Congress approved the agreements (P.L. 108-188), amending the Compacts and extending assistance for another 20 years (2004-2023). Two new

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