top of page
  • By Mar-Vic Cagurangan

Think tank recommends US military buildup in Compact states

National security experts have recommended a military buildup in the freely associated states, which have assumed greater importance as U.S. security partners amid China's growing threat in the region, according to the Congressional Research Service’s (CRS) recent report.

The Pacific nations' strategic importance to the U.S. defense system is among the key points of discussion between Washington, D.C. and freely associated states— Palau, Marshall Islands and Federated States of Micronesia — as they negotiate the possible extension of the expiring provisions of the Compacts of Free Association.

CRS cited a report by the Center for a New American Security (CNAS), which recommended “renewing and fully supporting” the Compacts, noting that the treaties “provide irreplaceable access to critical geography” as the U.S. seeks to advance its Indo- Pacific strategy.

The CNAS report was mandated under the 2019 National Defense Authorization Act. The Washington D.C.-think tank also recommended that the U.S. military develop “support infrastructure and greater access at existing airfields” and improve runways and infrastructure at key locations in the Compact states “like Palau and Yap.”

For Palau, this is a welcome proposition. In September, Palau President Tommy Remengesau Jr. wrote to U.S. Secretary of Defense Mark Esper expressing the country's willingness to host U.S. military bases.


The congressional report details the Compact economic assistance, funded through the Department of the Interior, which expires in 2023 for the Marshall Islands and FSM and 2024.

During the second Compact term covering the period 2004 to 2023, U.S. grant assistance and trust fund contributions to the Marshall Islands are to total $722 million and $276 million, respectively. Micronesia is to receive $1.6 billion in grant assistance and $517 million in trust fund contributions during the same period.

“Some U.S. policymakers and experts have expressed support for continued economic assistance to the FAS, given their ongoing economic dependency, U.S. historical obligations, and the perceived need to counter China’s rising influence in the region,” the report said.

The CRS report also noted the Compact nations’ contribution to U.S. military efforts and advancement of U.S. diplomatic and security interests globally and in the Pacific Islands region. Marshall Islands, for example, hosts the U.S. military’s Ronald Reagan Ballistic Missile Test Site on Kwajalein Atoll.

“Some experts recommend that the United States government should further integrate the FAS into its free and open Indo-Pacific strategy,” the report said.

In December 2018, the U.S. military held discussions with the FSM government about building naval facilities, expanding an airport runway for military use, and engaging in military exercises in FSM.


While Beijing has a growing influence in the southwest Pacific, the CRS report said China’s engagement in the FAS “is relatively limited due to the U.S. economic and security presence in the Compact states.”

However, while China does not have diplomatic ties with Marshall Islands and Palau, the CRS noted that the communist nation has cozy relations and “comprehensive strategic partnership” with FSM.

China is a major provider of economic assistance and investment for FSM. Chinese entities have financed and constructed major government buildings, a sports facility, a bridge and other infrastructure, and upgraded Chuuk International Airport.

Other China’s assistance includes other financial assistance; technical assistance; disaster and medical assistance; agricultural, biogas, solar energy, and climate adaptation projects; ship repair; and light utility aircraft.

In December 2019, FSM President David Panuelo visited China and received promises of $72 million in further economic assistance.

CRS also noted that China exerts some economic pressure in Marshall Islands and Palau, despite their diplomatic relations with Taiwan.


“(China) is one of the principal trading partners of the Marshall Islands, largely reflecting its export of transport vessels to the RMI,” the report said. The Marshall Islands has one of the world’s largest ship registries, but RMI ships entering Chinese ports pay higher fees due to the Marshall Islands not having diplomatic relations with (China).”

In 2018, Beijing banned Chinese tourists from visiting Palau, which is heavily dependent on tourism revenue, reportedly to pressure Palau into switching diplomatic relations from Taiwan to the PRC.

The United States renewed focus on the Pacific island countries began in recent years.

In May 2019, FAS leaders visited the White House for the first time. Palau President Tommy Remenegsau, FSM President David Panuelo and then Marshall Islands President Hilda Heine met with U.S. President Donald Trump.

“We recognize our unique, historic, and special relationships, and reaffirm our countries’ commitments to the Compacts of Free Association, resolving to continue our close cooperation in support of prosperity, security, and the rule of law,” Trump said.

In August 2019, Secretary of State Mike Pompeo stopped in Pohnpei, FSM, becoming the first U.S. Secretary of State to visit Micronesia, and met with FSM President David Panuelo, RMI President Hilda Heine, and Palau Vice President Raynold Oilouch.

In September, U.S. Secretary of Defense Mark Esper visited Guam and Palau.

On Oct. 19, Secretary of the Navy Kenneth Braithwaite visited Palau to further strenghen the U.S. commitment to the allied nation.

Braithwaite's visit, Remenegsau said, provides an "opportunity to rekindle and reinvigoratt the strong friendship and relations that Palau and U.S. enjoy."

"I am here to ensure that Palau understands our commitment to the security of the region, our commitment to the freedom of navigation in the seas surrounding Palau," Braithwaite said.

Remengesau said Palau's arrangement with the U.S. has built a foundation that makes "our relationship special."


bottom of page