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US-FSM Compact talks forge ahead with proposed package ready for submission

FSM President David Panuelo with Ambassador Joseph Y. Yun, U.S. special presidential envoy for compact negotiations. Photo courtesy of FSMIS

By Mar-Vic Cagurangan

With a few months left before the expiration of the economic components of the Compact of Free Association, Federated States of Micronesia President David Panuelo expressed hope Washington will accept his government's proposed package.

“Our citizens have significant, profound, and very real concerns about the U.S. providing a substantial assistance package over the next 20 years,” Panuelo said in a statement following his meeting with U.S. compact negotiators in Washington, D.C. on Wednesday.

The United States is under increasing pressure to please the island nations in the Pacific region amid China's growing influence fueled by cash diplomacy. The FSM itself is a self-confessed "dear friend" of Beijing.

The growing geopolitical tension brings the compact negotiations to a critical juncture. Under the treaty, the FSM receives economic assistance from Washington in exchange for the U.S. military's use of the Pacific nation's air, land and water.

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Without giving specific details, Panuelo said the FSM's proposed compact package lists demands that will satisfy his nation's immediate and long-term economic needs.

“The acceptance of this compact package would be a great and significant investment for both of our countries,” Panuelo said after his meeting with Ambassador Joseph Y. Yun, U.S. special presidential envoy for compact negotiations, and Jake Sullivan, U.S. national security advisor to U.S. President Joe Biden Jr.

Leon A. Falcam Jr., FSM's chief negotiator, and the Joint Committee on Compact Review and Planning will submit the FSM compact proposal to Yun on Thursday.

"The economic assistance package, developed over several years, addresses key issues and concerns and, if accepted, would result in transformational improvements in the lives and livelihoods of all Micronesians," Panuelo said.

The economic provisions of the compact will expire next year.


Secretary of State Antony Blinken appointed Yun last month as the White House's compact negotiator to resume the stalled talks between the U.S. and freely associated states and to tackle the "critical nature of these complex negotiations."

“I believe Ambassador Yun when he says he wants the FSM to be genuinely happy with the outcomes of our negotiations, and I am touched and heartened when he describes that this is a negotiation between family,” Panuelo said.

“It’s a very true statement. The people and government of the FSM are family with the people and government of the United States, with whom we share an enduring partnership," the FSM president added.


Panuelo said the FSM's proposed compact package reflects the needs of his citizens.

"While flying to D.C., I saw a teacher I knew in Pohnpei State who has left both his job and his country because his salary no longer provides for his family’s needs," he said.

He also discussed the health care situation in Yap, where the state hospital is in crisis due to a mass walkout by underpaid doctors and nurses.

"Meanwhile, the infrastructure and other needs of our country can be better met with a streamlined provision of assistance," Panuelo said. "The education, health, and infrastructure sectors are of paramount importance to our nation’s development, and the package in its presented form will be of great help.”


“The proposed package includes an additional yet also critically essential pillar on the environmental sector, as we are collectively and keenly aware that climate change represents the FSM’s most significant and existential security risk," Panuelo said.

He said the proposed "environment sector would play a key role in our nation’s adaptation and mitigation efforts which, given our world’s lack of progress on tackling climate change, is ultimately going to make the difference on whether or not islands like Kapingamarangi Atoll and the Mortlocks literally exist fifty years from today.”

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