US Seals Agreements With Micronesia in Bid to Counter Beijing

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The United States struck three agreements with the Federated States of Micronesia (FSM) on May 23 to sustain cooperation at “significant levels” amid ongoing rivalry between the U.S. and China in the Pacific region.

The accords were signed by Alissa Bibb, the charge d’affaires of the U.S. embassy in Pohnpei, and Micronesian negotiator Leo Falcam Jr. as part of the Compact of Free Association (COFA), the State Department said.

Both sides agreed to extend COFA-related assistance “at significant levels that recognize our special relationship, support economic development, bolster resilience to tackle challenges such as climate change,” and assist in building a sustainable future.

The agreements encompassed the amendment of the COFA, a new fiscal procedures accord, and a new trust fund agreement. Washington hailed them as “a major milestone” in its relationship with FSM.

“Congressional approval is necessary before the agreements can be brought into force, and we are engaged with Congress on this matter,” the State Department said.

Under the COFA, established in the 1980s, the United States is obligated to provide economic aid to FSM, Palau, and the Republic of the Marshall Islands in exchange for permission to operate defense bases there. These three Pacific nations are called the Freely Associated States.

Speaking to reporters in Papua New Guinea (PNG), Secretary of State Antony Blinken said he had signed an agreement with Palau and hoped to conclude negotiations with the Marshall Islands soon.

“As part of these agreements, the United States will commit $7.1 billion to the Freely Associated States over the next 20 years,” Blinken said at a joint press conference with the PNG leader on May 22.

U.S. Secretary of State Antony Blinken and Papua New Guinea’s Defence Minister Win Bakri Daki shake hands after signing a security agreement as Papua New Guinea’s Prime Minister James Marape (center) looks on at the Forum for India-Pacific Islands Cooperation at APEC Haus in Port Moresby on May 22, 2023. (Adek Berry/AFP via Getty Images)

Blinken also signed a defense cooperation deal with PNG in place of President Joe Biden, which he said would enable the United States to support PNG in boosting its defense capacity, tackling illegal fishing, and providing disaster relief.

“I just want to stress this point: It wasn’t shoved down on our throat. It wasn’t forced upon us; it was a mutual agreement,” PNG Prime Minister James Marape told reporters.

The ongoing debt limit talks in Washington prompted Biden to cancel his planned trip to the Pacific island nation, which would have been the first by a sitting U.S. president to PNG.

The United States has sought to boost its engagement in the Pacific region after Beijing signed a security pact with the Solomon Islands last year, which many countries in the region fear could allow Beijing to station troops, weapons, and naval ships on the strategically important island.

In March, former FSM President David Panuelo exposed the threats posed by the Chinese Communist Party (CCP) to his nation in a leaked 13-page letter to the FSM Congress.

Panuelo’s four-year term ended earlier this month and he was succeeded by Wesley Simina.

He alleged the CCP was attempting to undermine FSM’s sovereignty to ensure that the Pacific nation would side with the CCP or remain neutral in a potential conflict over self-ruled Taiwan.

“We further know that the FSM has a key role to play in either the prevention of such a conflict or participation in allowing it to occur,” Panuelo wrote.

“It is on this basis that Political Warfare and Grey Zone activity occur within our borders; China is seeking to ensure that, in the event of a war in our Blue Pacific Continent between themselves and Taiwan, that the FSM is, at best, aligned with the PRC instead of the United States, and, at worst, that the FSM chooses to abstain altogether,” he added.

Panuelo said the CCP’s political warfare in the FSM included overt activity—such as political alliances and economic measures—and covert activity, such as “bribery, psychological warfare, and blackmail.”