U.S. aims for ‘top line’ deal on aid to three Pacific nations

(L-R) FSM Vice President Aren Palik, U.S. Special Envoy for Compact Negotiations Joseph Yun, and FSM President David Panuelo

The United States hopes to reach agreement on “top line” numbers for assistance to three Pacific Island countries by the year end, a State Department official told Reuters on Thursday, part of negotiations critical to shoring up U.S strategic interests in a region courted by China.

The Marshall Islands, the Federated States of Micronesia (FSM) and Palau are sovereign nations that agreed Compacts of Free Association, or COFAs, in the 1980s, under which the United States retained responsibility for their defense and exclusive access to huge swaths of the Pacific.

COFA provisions will expire in 2023 for the Marshall Islands and FSM, and in 2024 for Palau and though the island nations still enjoy close ties to Washington, critics warn that a failure to reach new terms for economic aid could spur them to look to China for funding or increased trade and tourism.

The nations have complained that assistance has not kept pace with U.S obligations but President Joe Biden’s administration pledged at a summit in September to try to reach agreements by year end.

“We’re not talking about signing final agreement texts by the end of the year,” a U.S State Department official told Reuters. “We’re aiming to get good consensus on what the top-line assistance would be, agreed by all sides.”

The official declined to say what dollar amounts were under discussion but said Washington hoped to reach deals with all three countries by the year-end or early next year.

One source familiar with the talks said the figures could include hundreds of millions of dollars a year in assistance spread across the three COFA countries, though the amounts could vary by year and by purpose.

This would be an increase from existing funding, although the islands’ strategic value given China’s growing influence has risen significantly since the COFAs were last amended nearly two decades ago.

Marshall Islanders are still plagued by the health and environmental effects of the 67 U.S nuclear bomb tests there from 1946 to 1958, which included “Castle Bravo” at Bikini Atoll in 1954 – the largest U.S bomb ever detonated.

Though the State Department says Washington already reached a full and final settlement for the nuclear legacy under past agreements, the official said Washington was “exploring a variety of areas in which the United States might provide broad assistance” to address ongoing needs.

Asked if Washington would consider a formal apology the Marshall Islands has requested for the impacts of the nuclear tests, the U.S official said there had long been conversations about it within the U.S government. “I think it’s something that we think about regularly and discuss internally,” the official said, without elaborating.

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