July 13, 2023

Manchin, Committee Receive Testimony on Compacts of Free Association

Washington, DC – Today, the U.S. Senate Energy and Natural Resources Committee held a hearing to receive testimony regarding the Compact of Free Association Amendments Act of 2023, a legislative proposal submitted by the Secretary of State and Secretary of the Interior. During the hearing, Chairman Joe Manchin (D-WV) discussed the importance of renewing the Compacts of Free Association to counter China’s influence in the Indo-Pacific region and the ongoing Compact negotiations with the Republic of the Marshall Islands (RMI).

“To date, the United States has provided at least $800 million in economic assistance to Palau, $2 billion to the Marshall Islands, and $4 billion to Micronesia—which has helped those countries invest in education, healthcare, infrastructure, and more. At the same time, the Compacts have underwritten America’s sea lines of communication throughout the Indo-Pacific while promoting regional security by granting the United States exclusive powers to control military access to the Freely Associated States. Congressional consideration of this legislative proposal comes as China is increasingly challenging the United States for regional influence. It is therefore vital to maintain our bilateral political, military and economic relationship with the Freely Associated States under the Compacts,” said Chairman Manchin.

Chairman Manchin questioned Ambassador Joseph Y. Yun, Special Presidential Envoy for Compact Negotiations, about mandatory funding for Compact assistance. 

“Ambassador Yun, you noted in your testimony that representatives of the Governments from each Freely Associated State signed a Memorandum of Understanding earlier this year. It is our understanding that, in doing so, the representatives accepted a good-faith topline offer of $6.5 billion in direct economic assistance over 20 years. I also understand that the total Compact proposal includes funding for the U.S. Postal Service at $634 million, bringing the total package to $7.1 billion over the next 20 years. As you noted in your testimony, it is important that we successfully renew the Compacts of Free Association “to avoid any lapse in U.S. assistance to these important partners.” Why is the renewal of the Compacts of Free Association with the Federated States of Micronesia, the Republic of Palau, and the Republic of the Marshall Islands important, and why is mandatory funding necessary?” asked Chairman Manchin. 

“Mandatory funding is necessary so that these islands can plan their future. We’ve done it every time, in 1984 we did it, and we also did it in 2003. The only one we didn’t do it for was Palau, as a result their agreement took 8 years to be passed by Congress and they could not plan a yearly budget,” replied Ambassador Yun.

Chairman Manchin also asked about ongoing negotiations with the Republic of the Marshall Islands (RMI).

“We understand that negotiations with the Marshall Islands have yet to conclude. This is concerning because Congress faces a daunting deadline to complete our work on the Compacts before the end of the fiscal year. What is the plan for Compact negotiations with the Republic of the Marshall Islands?” asked Chairman Manchin.

“To be completely frank with you, we have offered them (RMI) $2.3 billion over the next 20 years, and that memorandum was signed some months ago. So, it does puzzle me as well why it has become not acceptable. The reason they state is because the nuclear issues have not been resolved yet. I’d like to point out two aspects of nuclear issues. One is, as you rightly mentioned, our legal responsibility for nuclear liability has been met, and they have agreed to that. We’ve always felt that there were additional needs. Which is why, within the $2.3 billion that we offered, $700 million was set aside to put into the trust fund. And that $700 million could be used for development, education, environment, issues of nuclear [legacy in the four] Atolls, as well as other Atolls. From the beginning, the RMI government has insisted that they would like to have a bigger role in setting up their priorities, which is why we put that aside for them to decide how they want to apportion, with obviously some oversight from the United States,” said Ambassador Yun.To watch a video of

Senator Manchin’s opening remarks, please click here.

To watch a video of Senator Manchin’s questioning, please click here.

To watch the hearing in full, please click here.