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1 1 (August 25, 2023)

handle is hein.crs/govemrr0001 and id is 1 raw text is: Congressional Research Service inforrni he I egislative debate since 191 4 The Compacts of Free Association Updated August 25, 2023 Overview 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, Palau, and the Northern Mariana Islands 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; over 1,000 FAS citizens serve in the U.S. Armed Forces. The FAS 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 RMI, FSM, and Palau rank 162d, 192d, and 118th, 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 2022 Indo-Pacific Strategy refers to the Compacts of Free Association as the bedrock of the U.S. role in the Pacific. The RMI and Palau are among four PICs that have diplomatic relations with Taiwan and not the PRC. Micronesia, along with some other PICs, rejected a 2022 PRC proposal for a sweeping diplomatic, economic, and security pact between China and 10 PICs with which China has diplomatic relations. Corpact 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. The Department of the Interior (DOI) has funded and administered this assistance, also referred to as grant assistance, through mandatory or permanent appropriations since the Compacts' inception. The FAS also are eligible for some U.S. federal programs and services. U.S.-FAS negotiations to renew Compact economic assistance began in 2020. Since March 2022, Ambassador Joseph Yun, the State Department's Special Envoy for Compact Negotiations, has led talks on the U.S. side. In January and February of 2023, the United States signed memoranda of understanding (MOUs) with each of the three FAS on the basic levels and types of Compact assistance for the next 20 years. In May 2023, the United States signed agreements with the FSM and Palau on extending economic assistance. A final U.S.-RMI agreement has not been reached at the time of this writing. In June 2023, the Department of State submitted a draft bill (joint resolution) to Congress that if approved would amend the Compacts and implement the FSM and Palau agreements and the pending agreement with the RMI. The agreements include grant assistance and trust fund contributions for the FSM and Palau that total $3.3 billion and $0.9 billion, respectively, for FY2024-FY2043. In addition, the agreements include $634 million to continue the U.S. Postal Service in the FAS. The U.S.-RMI MOU provides for assistance totaling $2.3 billion for 20 years, including a $700 million trust fund intended for various purposes, including for addressing nuclear legacy issues. The next phase of Compact assistance to the FAS is to include greater support for the environment, climate change adaptation, health care, education, and infrastructure. Figure 1. The Freely Associated States Source: CRS. Information from Esri and U.S. Department of State. Compensation for past nuclear testing remains a sticking point in U.S.-RMI negotiations to finalize an agreement on

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