Amidst extensive negotiations, the Compacts of Free Association (COFA) Amendment Act, part of the Consolidated Appropriations Act 2024, has been signed into law. The act secures vital services and funding for COFA countries for the next two decades.
The Compacts of Free Association
The United States’ Compacts of Free Association (COFA) with the three countries of the Freely Associated States (FAS) is a series of agreements that promote and institutionalize mutual economic and defense interests. The US signed its first COFAs with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) in 1986 and with the Republic of Palau (RP) in 1994, giving the United States the “right to establish, operate, and administer military posts in the islands and utilize resources for military purposes.” In exchange for this, the United States has “the obligation and full responsibility to protect COFA states from all forms of aggression and terrorism.” Additionally, COFA obliges the US to provide social services to the FAS, including “trust funds, joint oversight committees, and sector grants targeting education, health, the environment, public sector capacity building, private sector development, and infrastructure,” as well as the right to live and work in the United States without a visa.
After its initial signing, the COFA underwent renewal in 2003. It was proposed for another renewal as its expiration approached in 2023 and 2024. All FAS signed the renewal in 2023, and after much delay, President Biden renewed and signed the COFA into law this March (2024). The “Compact of Free Association Amendments Act of 2024” was passed as part of the Consolidated Appropriations Act 2024, the $460 billion spending bill package for fiscal year (FY) 2024. Despite being passed on March 6th, months after the FAS signed the bill, the new COFA agreement includes $7.1 billion in mandatory funding for the next 20 years (FY2024 - FY2043 COFA).
Negotiating the COFA
Despite the act's passage, the long negotiation process was characterized by bureaucratic gridlock and misaligned visions. Multiple government agencies, including the Departments of the Interior and Energy, manage the relationship with COFA countries in their respective areas, “creating a piecemeal approach.” The bureaucracy is fractured to such an extent that the US government acknowledges the need to improve interagency cooperation to effectively implement and manage the COFA. Alongside this, COFA states expressed discontent with several of the terms of the agreements during negotiations, resulting in further delays.
Another dimension of the COFA negotiations was partisan strife in Congress. President Biden’s FY2024 spending bill, encompassing the new COFA act, was passed as Democrats and Republicans wrangled, just in time to avert a partial government shutdown. Despite the partisan struggle for the spending bill, COFA has seen strong bipartisan support. In advocating for COFA renewal, 26 bipartisan senators wrote to Senate leadership: “Failure to pass the renegotiated Compacts as soon as possible imperils our relationships with the Freely Associated States and the entire Pacific Island region, who view the COFA as a barometer of the U.S. commitment to the region.” Beyond partisan politics, other countries expressed support for passing the COFA. The Japanese Ambassador to the United States, Shigeo Yamada, sent a letter to Congressional leadership, emphasizing that “the passage of the COFA Amendments Acts of 2024 will be vital to secure the region's peace and stability.” Pacific Islands analysts have spoken on the “politics of delay,” emphasizing that stalls in COFA negotiations have negatively affected the United States’ relationship with the FAS. Furthermore, analysts have recommended the implementation of a US-FAS leadership summit and increasing US educational opportunities in the FAS to offset the alleged deterioration in the relationship.
US Strategic Interests in COFA
Despite these delays, signing the COFA act is a significant accomplishment given US strategic interests in the FAS. The United States being in free association with the three countries gives the US access to an “area of the Pacific that is broader than the continental United States” and “allows the United States to deny military access or strategic use of the FAS to third countries.” Furthermore, individuals in the FAS states join the US military at higher rates per capita than any US state.
A cornerstone of contemporary US strategy today lies in Biden’s Indo-Pacific Strategy (IPS), which “prioritize(s) finalization of the Compact of Free Association agreements with the Freely Associated States.” The IPS underscores US commitments to work with and in the Pacific Islands region on a range of issues, including climate change, defense, health system resilience, diplomatic presence, US Coast Guard presence, maritime domain awareness, Quad collaboration, and cyber security infrastructure.
A key aspect of the IPS is countering China’s influence in the Indo-Pacific. The bipartisan Indo-Pacific Task Force, created to conduct oversight on issues concerning the new COFA agreement, addresses this challenge. Informed by hearings over the past year, including “How the Compacts of Free Association Support U.S. Interests and Counter the PRC’s (People’s Republic of China) Influence,” the task force states, "U.S. economic assistance enables the FAS to counter the PRC’s attempted coercion and reduces pressure on FAS governments to accept grants, loans, and investments from the PRC.” The task force goes on to state that the “PRC is attempting to leverage its resources to shape political outcomes and perceptions of the US in the region while waging political warfare to gain undue influence and destabilize island nations” through infrastructure projects, travel bans, and illegal, unreported, and unregulated fishing.
Beyond contemporary strategic reasons, the US also has historical reasons for establishing good relationships with the COFA states, especially with the RMI, is important. After the end of the Second World War in 1945, the United States started its atomic testing program in the RMI where, between 1946 and 1958, “the (United States) detonated (the equivalent) of 1.7 Hiroshima bombs every day for 12 years.” Remediating this relationship, even partially, should be a priority of the United States in addressing its nuclear testing legacy. The East-West Center has contributed to building the US-RMI relationship, facilitating the RMI’s signing of the new COFA agreement in 2023.
Adopting the act begs the question: what are the prospects for implementation? The President of Palau, President Surangel Whipps Jr., expressed relief with the passage: “[This] allows us to stop borrowing to keep government operations going; it allows us to hire those critical police officers, health care workers, and education teachers that we need.” The East-West Center in Washington asked Brian Harding, Senior Expert on Southeast Asia and Pacific Islands, at the United States Institute for Peace to address the future of COFA:
“The silver lining of the delays is that it really focused attention in Washington on the importance of relations with the Freely Associated States. Understanding of the Compacts is staggeringly high in Washington today because experts in the US and elsewhere and leaders from the FAS had to make the case for their importance. And they were successful. The challenge now is to build on the passage and consider this the floor for US-FAS relations.”
Lei Nishiuwatoko is a Spring 2024 Young Professional at the East-West Center in Washington. She recently graduated from Northeastern University, where she obtained a B.A. in International Affairs. Lei has previously interned at the NATO Defense College, WorldBoston, and L.E.K. Consulting.