U.S. groping for contingency plan amid expiration of COFA’s economic provisions

Photo: Office of Insular Affairs

The U.S. economic provisions for the Federated States of Micronesia (FSM) and the Marshall Islands under the Compacts of Free Association expired on 30 September without being renewed as the U.S. Congress continued to wrangle over the 2024 federal budget.

Last week, the U.S. and the FSM signed the final subsidiary agreement, representing the last stream of federal programmes and services under the compact’s 20-year provision cycle that just ended.

U.S. compact negotiator Joseph Yun and his Micronesian counterpart, Leo Falcam Jr., signed the 2023 Federal Programmes and Services Agreement on 28 September, pledging the continuation of essential programs and services provided by U.S. agencies to the FSM.

However, the federal shutdown might pose a stumbling block to the flow of U.S. assistance into the Pacific nation.

“I think that I can assure you we’re in close and frequent contact with our friends in the freely associated states and I’m confident we have a plan to work through any contingency,” said Daniel Kritenbrink, assistant secretary of State for East Asian and Pacific Affairs.

He did not specify the plan, however. 

Kritenbrink said the impact of the federal shutdown was discussed in some detail during a meeting between Secretary of State Antony Blinken and the FAS leaders last week. 

“We’re also working very closely with our friends so that if there were to be any kind of a lapse in appropriations, that we can take the appropriate mitigating steps wherever possible to minimize any possible impacts on our friends in the freely associated states,” Kritenbrink said in a press briefing Friday. 

The compact’s economic provisions for Palau are set to expire on 30 September 2024, but during the concluded renegotiation, the U.S. pledged to advance the renewal a year ahead. 

The White House has proposed US$7.1 billion in 20-year economic assistance for the freely associated states. However, the new COFA proposals are still awaiting congressional action draft legislation. 

“I think, as friends may be tracking, that the draft Compact of Free Association agreements, the draft legislation on the Hill includes authority to continue programmes and services at the same levels provided under current agreements until the new agreements are in place so as to avoid a lapse in services,” Kritenbrink said. 

The COFA agreements form the anchor of Washington’s ties to the FSM, Palau and the Marshall Islands, which are emerging as components of the U.S. military’s Indo-Pacific strategy. 

The U.S. has been touting its amplified engagements with the freely associated states amid its raging competition with China. 

“I can assure you that we are in very close and constant communication with our friends both in the freely associated states and with leaders on Capitol Hill to make sure that we have a plan going forward under all circumstances that will allow us to meet our obligations under the compacts,” Kritenbrink said. 

“We’re really excited about the progress we’ve made in the compact negotiations and we’re confident that all of these agreements will be concluded soon,” Kritenbrink said. 

While the U.S. has capped its negotiations with the FSM and Palau, the completion of discussions with the Marshall Islands remains pending in the face of the unresolved reparations over the U.S. nuclear tests. 

In the FSM, the U.S. State Department said the conclusion of the 2023 Federal Programmes and Services Agreement was “an affirmation of our close and continuing partnership.” 

As of this week, there were no announcements about similar deals for Palau and the Marshall Islands.

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