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Will Congress finally deliver Pacific region security pact the State Department bungled? 

Strategic agreements in Washington’s political lost-and-found, boosting Beijing’s bid to isolate Taiwan 

By Howard Hills

The Compact of Free Association is an iron-clad security pact between the U.S. and three sovereign island nations straddling strategically vital trans-Pacific sea lanes into and out of Asia just north of the equator. COFA comprises mutual security commitments and strategic interdependence in some respects more comprehensive than America’s alliance with greater Europe under the NATO charter.


The vast archipelagoes and atolls within the domain of our COFA allies were controlled by Imperial Japan from 1922 to 1946 under a League of Nations mandate. Dominating the Micronesian region was central to Tokyo’s strategy in the mid-20th century to conquer the Indo-Pacific, thereby in effect controlling over one-third of the earth’s surface.  

At the cost of 100,000 American lives in WWII, the U.S. gained and ever since has retained strategic control of these islands, first under a 1947 U.N. trusteeship and then pursuant to COFA since 1986. 


COFA enabled the U.S. to deter Soviet Union military expansion in the Pacific during the Cold War. China is now repeating history by emulating the Japan and USSR playbook, seeking future domination of the “Blue Continent” bridging east and west, north and south, from the epicenter of the Indo-Pacific.  


COFA economic assistance for Palau, the Marshall Islands and the Federated States of Micronesia sustains U.S. defense rights imperative for control of a strategic ocean area larger than the continental United States. Negotiations on a new 20-year assistance package began in 2019, well ahead of the 2023 expiration of the previous two-decade assistance package.

Ironically, however, the COFA success story led the Pentagon and U.S. State Department to bureaucratic complacency, taking renewal by our COFA partners and Congress for granted.  The U.S. negotiating positions that worked 20 years ago were not relevant to current economic and political conditions in the region. That included the impacts of the pandemic, but more importantly, China's aggressive political warfare escalated to disrupt stable relations under COFA, part of China's regional game plan ultimately including the subjugation of Taiwan. 

After long overdue correction in U.S. negotiating positions, COFA renewal agreements were signed and sent to Congress in 2023. At $7.1 billion over 20 years, the COFA price tag arguably is unsurpassed in return on investment of U.S. defense dollars purchasing regional power projection.

With the support of leading fiscal conservatives in Congress, COFA oversight hearings were followed by bipartisan and bicameral cooperation producing legislation to approve the COFA renewal package. But stubborn institutionalized resistance to initiatives of a White House presidential envoy who replaced failed State Department negotiators delayed final agreements until the previous COFA assistance package expired at the end of FY 2023.

Sloppy and inadequate stop-gap funding did not mitigate China's threat to democracy for our COFA partner governments, especially Palau and the Marshall Islands which have diplomatic relations with Taiwan, not Beijing. For example, forced spending cuts in Palau are underway while China's under-the-table money reportedly pours in to destabilize pro-American leadership as local elections approach. 


Instead of being included in the must-pass National Defense Appropriations Act, COFA was appended to the Emergency National Security Supplemental Appropriations bill for Israel and Ukraine, linked to border security. That gained no leverage for Republicans or Democrats but delayed COFA, while at least averting the need to offset some COFA funding with spending cuts. With the solution seemingly at hand, COFA suddenly disappeared from the congressional agenda only to re-appear amid partisan jousting, with the outcome still too close to call.


Congressional committees and the White House have cleared off on COFA, so unless the U.S. reneges, it’s when not if U.S. will act to secure vital long-term American interests at stake. Failure to complete negotiations before FY 2023 ended, due to State Department miscalculation, was a national security mission failure.

As imperative as spending sobriety is for America, COFA is too good a deal to be derailed by petty inside-the-beltway partisan fiscal wrangling. Deferring COFA put national security at increased political risk. 

Unless soon included in must-pass legislation, COFA could become orphaned legislation, instead of a load-bearing pillar in the strategic architecture of America’s engagement in the Indo-Pacific.    


Howard Hills was counsel for COFA negotiations in the Executive Office of the President (1982-1986); counsel for Interagency Affairs, Office of Freely Associated State Affairs, U.S. Department of State (1986-1989); senior advisor to the Assistant Secretary of the Interior for Insular and International Affairs for COFA Negotiations (2020-2023), assigned as senior advisor to Special Presidential Envoy for COFA Negotiations (2022-2023).  Opinions expressed are those of the author and are not attributable to any other person or organization.  All information sourced in public record communications 2020-2023.


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