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1 1 (October 18, 2023)

handle is hein.crs/govenfd0001 and id is 1 raw text is: Congressional Research Service inforrni he eg~ Iative debate since 191 4 The Compacts of Free Association Updated October 18, 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. In 1978, the Marshall Islands, Micronesia, and Palau rejected the option of U.S. territorial or commonwealth status and instead chose the status of free association with the United States. The Northern Marianas chose commonwealth status, and nearby Guam, occupied by the United States after the Spanish American War ended in 1898, became a U.S. territory in 1950. Citizens of the RMI, FSM, and Palau (Freely Associated States or 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 countries (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 or China), 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. Compact Negotiations Economic assistance pursuant to Title II of the Compacts of Free Association expired at the end of FY2023 for the Marshall Islands and Micronesia and is set to expire 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. Figure I . The Freely Associated States Source: CRS. Information from Esri and U.S. Department of State. Since March 2022, Ambassador Joseph Yun, the State Department's Special Envoy for Compact Negotiations, led talks with the FAS to renew Compact economic assistance. In May 2023, the United States signed agreements with the FSM and Palau on extending economic assistance for 20 years, and in October 2023, the United States signed a 20- year economic assistance agreement with the RMI. Although Compact economic assistance for Palau does not expire until the end of FY2024, the United States and Palau agreed to start the next (third) term of assistance at the beginning of FY2024, along with the RMI and FSM. 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. 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 agreements. The agreements include grant assistance and trust fund contributions for the RMI, FSM, and Palau that total approximately $2.3 billion, $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 Continuing Appropriations Act, FY2024 (P.L. 118-15), which was signed into law on September 30, 2023, extends grant assistance to the FSM through November 17, 2023.

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