US Ramps Up Attention On Micronesia To Curb China’s Expanding Influence

During a visit in August to the Federated States of Micronesia, Secretary of State Mike Pompeo gushed about the beauty of the tropical island of Pohnpei.

“I would encourage everyone to come, bring your family, spend money,” Pompeo said at a press conference with newly elected FSM President David Panuelo and top officials from the Republic of Palau and the Republic of the Marshall Islands.

“You will love to meet the wonderful people of these great friends of the United States.”

It was the first time a U.S. Secretary of State ever officially visited the Pacific nation even though it is among America’s closest allies.

Pompeo was there to announce the beginning of renegotiations of three strategic agreements with the FSM, Palau and the Marshall Islands that give the U.S. military control over the countries’ land, airspace and surrounding waters.

The Federated States of Micronesia depend on federal dollars to support their economy. But the money is scheduled to run out in 2023 and 2024 unless the compact with the U.S. is renegotiated.

The treaties, known as the Compacts of Free Association, date back to the Reagan era. The U.S. fought the Japanese in the region during World War II and for years afterward, administered the islands as a Trust Territory through the United Nations. When the Marshall Islands, Palau and a group of islands that became the Federated States of Micronesia voted to be independent nations, the U.S. decided to sign the compacts to retain military control over the highly strategic region.

Today, the Pacific nations receive millions of dollars each year to support critical educational, infrastructure and health services along with the right to live and work visa-free in the U.S. In return, the U.S. military controls the region — including the Ronald Reagan Ballistic Missile Defense Test Site in the Marshall Islands — a crucial buffer between the U.S. and Asia that cements the U.S. as a Pacific power.

But the money is set to run out, and if the U.S. doesn’t extend the funding, China looks prepared to swoop in. Hoping to deter China, the Trump administration is ramping up its focus on the region.

“Your small islands are big strongholds of freedom,” Pompeo said. “Just as we did during World War II, we will oppose any larger nation’s attempt to turn the Pacific Islands into footholds for regional dominance.”

Along with Guam and the Commonwealth of the Northern Mariana Islands, the compacts ensure the U.S. controls more than 3 million square miles in the western Pacific — an area comparable to the size of the continental U.S.

But under the treaties’ terms, the flow of money for the FSM and the Marshall Islands stops in 2023. For Palau, it ends in 2024. While trust funds have been set up to help fill the void, they won’t generate enough money to keep the fragile economies afloat.

In short, without continued assistance, the economies of the three island nations — particularly the FSM — may crumble. There won’t be enough money for schools. There won’t be enough funding for the few existing health services. Even the post office will have to decide whether to continue delivering mail.

So far, President Donald Trump’s administration seems to be paying attention.

The president invited the heads of the Marshall Islands, Palau and the FSM to the White House for a historic visit last April, and has even created a new position on the National Security Council: director for Oceania and Indo-Pacific Security.
No Talks Yet

Since Pompeo’s visit, however, there has been little in the way of actual negotiations. The FSM has assembled a team of people to handle negotiations, including a lead negotiator. But the U.S. has yet to do so.

Negotiations will be led by the State Department and include the Indo-Pacific Command, which is based out of Hawaii. The U.S. Department of the Interior is involved too — although the compacts are considered international agreements, the Interior is in charge of disbursing funds to the region.

Only the financial aspects of the compacts are ending, but it’s possible other topics could be on the table, says Douglas Domenech, assistant secretary for insular and international affairs at the Department of the Interior.

A recent Los Angeles Times investigation into U.S. nuclear tests in the Marshall Islands found the U.S. dumped previously undisclosed nuclear waste from Nevada in a concrete dome there that appears to be cracking open. The FSM raised concerns earlier this year about alleged human trafficking in Iowa. And all three nations are increasingly worried about climate change.

“There has not been a discussion of the elements of negotiating so I suppose that all that could be on the table, especially if it’s important to the individual countries,” Domenech said. “I think in many ways the U.S. would be fine if we could extend the compact as it is for the next 20 years. That would be a great end state but that might not be acceptable to the countries.”

Leadership turnover could complicate talks. The Marshall Islands is in the midst of elections and Palau will choose a new leader next year.

Trump is facing potential impeachment in the House and is actively campaigning to keep his seat in 2020. In the FSM, Chuuk State is planning a March vote on potential secession, potentially creating another window for China to gain a foothold in Micronesia.

Although the U.S. has held a series of listening sessions in the region, Domenech doesn’t expect any negotiations to start formally until 2020. But he hopes they don’t drag out. Congress is already in the process of figuring out the 2021 budget. In just two years, the 2023 budget proposal will be on the table.

“My biggest worry is trying to get everybody to agree to something soon,” Domenech says.

So far, officials from all three Pacific nations have said they want to extend the compacts. None of their D.C. embassies replied to requests for comment for this story. But James Naich, a former deputy ambassador for the FSM, said that just like the U.S., the FSM has a lot at stake.

“Seen at a very basic level, some people might say that’s a good thing, two big guys fight and we take benefit from that. I’m not sure if it’s that simple,” he said. “We have to be mindful and protective of our sovereignty … we have to be sure we aren’t squeezed by the big boys.”

Derek Grossman, a senior defense analyst at the RAND Corp. and a co-author of a recent report on the compacts, says that policymakers should understand any country can exit the treaties at any time — there’s no guarantee the U.S. will maintain control over the region.

The U.S. Interior’s involvement suggests “we’re looking at it in terms of colonial relationships but they’re not,” Grossman says. “These are free countries that are voluntarily in these relationships.”

“It’s really, really important those compacts of free association are renewed at least at the current funding levels if not at higher funding levels in the future.”[...]


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