Pacific Note: North Korea’s threat to Guam might be an impetus for Palau compact approval

Koror—While President Donald Trump’s proposed $54 billion in extra spending for the Department of Defense may have provided the offset language needed to fund the Compact Review Agreement, the recent threat by North Korea to launch four intermediate ballistic missiles near Guam highlighted Palau’s strategic military value in the region. It also comes at a time when the U.S Congress will consider approval of the amended compact agreement after its August recess.

“Palau is indispensable to our national security and funding the compact is key to our strategic presence in the region,” says the Defense Department’s 2018 budget request. But the House Armed Services Committee initially didn’t consider Palau important enough for the $129 million funding transfer from the DOD budget to the Interior Department.

On Sept. 3, 2010, Palau and the United States signed the Compact Review Agreement, which would extend financial assistance to Palau amounting to $250 million for public safety, health, and education, to build and maintain infrastructure, to pay debts, and to increase the Compact Trust Fund for the future. The assistance would be extended until Sept. 30, 2024.