*EPF405 07/24/2003
Text: Leach Urges Prompt Renewal of Compact of Free Association
(House Asia-Pacific panel chairman's July 23 remarks) (1030)

The chairman of the House International Relations Subcommittee on Asia and the Pacific urged fellow lawmakers July 23 to take timely action to renew the Compact of Free Association with the Federated States of Micronesia and the Marshall Islands.

In an opening statement at a July 23 markup session of the full International Relations Committee, Representative James Leach (Republican of Iowa) informed members of the International Relations panel that the current compact with the two Pacific nations will expire on September 30.

The panel was scheduled to markup House Joint Resolution 63 (H.J. Res. 63), which would renew the compact.

The Iowa Republican said the renegotiated compact would preserve the U.S. "defense veto" regarding the island states and would assure continued U.S. military access to Kwajalein Atoll defense sites until 2066, with an option to extend that to 2086.

"The amended Compact also strengthens one key additional area, immigration, by adding new restrictions and clarifying the applicability of the Immigration and Nationality Act to Compact migrants," Leach added.

Following is the text of Leach's statement from the House International Relations website:

(begin text)

Committee on International Relations
U.S. House of Representatives
Washington, D.C. 20515-0128

Opening Statement
Representative James A. Leach
Chairman, Subcommittee on Asia and the Pacific
Markup of H.J. Res. 63
July 23, 2003

Thank you, Mr. Chairman.

As my colleagues may be aware, the economic assistance provisions of the current Compact of Free Association with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) expired in 2001, but were extended for two years while the U.S. renegotiated the expiring provisions with the islands - also known as the Freely Associated States. However, those negotiations were only completed late this spring, leaving Congress with little time to act before those authorities expire on September 30th of this year. Hence the need for expeditious action on this legislation.

In this regard, the Subcommittee held a hearing on the newly renegotiated Compacts on June 18, receiving extensive testimony from the Departments of State and Interior, the General Accounting Office, as well as testimony for the record from the governments of the FSM and RMI. Most recently, on July 18 the Subcommittee marked up H.J. Res. 63 and reported it favorably to the Committee with several modest technical amendments.

By background, the U.S. has shared a uniquely close and mutually beneficial relationship with the peoples of Micronesia and the Marshall Islands. For nearly forty years after the Second World War, the U.S. administered both islands as United Nations Trust Territories. In 1986, Micronesia and the Marshall Islands chose to become sovereign states and entered into a Compact of Free Association with the United States. The compact was intended to ensure self-government for the new island nations, to assist them in their economic development toward self-sufficiency and to advance certain mutual security objectives.

It is my strong view that the interests of the peoples of the U.S. and these Pacific islands have been well served by the Compact. Our former trust territories have emerged as sovereign democracies; America's strategic interests in the Western Pacific have been protected; and the bonds of friendship forged during World War Two have only strengthened with the passage of time.

The passage of time, however, revealed a number of deficiencies in the first Compact, particularly concerning management of funds, planning, and oversight. Fortunately, however, drawing on the work of the Asia Subcommittee under the leadership of former Chairman Bereuter and extensive work by the General Accounting Office, the new agreement completely redesigns the way Compact funds are used, thereby significantly strengthening these agreements.

Here I would like to draw the Committee's attention to the impressive new accountability provisions of the amended Compacts. According to the GAO, the amended Compacts include enhanced reporting and monitoring measures that should substantially improve accountability if fully implemented. For example, assistance under the amended Compacts will be provided through grants targeted to priority areas, including health and education, with specific terms and conditions attached. Annual reporting and consultation requirements will be expanded and funds could be withheld for noncompliance with Compact terms and conditions.

More broadly, the amended Compacts of Free Association with the FSM and RMI to renew expiring assistance would require about $3.5 billion in funding over the next 20 years, with a larger amount being possible if the U.S. exercises its option to extend military use rights on Kwajalein Atoll. The amended Compacts would provide decreasing levels of annual aid over a 20-year term, with U.S. grant assistance expiring at the end of that period. At the same time, the Compacts would require the capitalization of a trust fund for each country to generate annual interest earnings that would replace U.S. grant assistance in 2023.

The amended Compacts and related agreements address other key issues. They preserve the U.S. "defense veto" and assure continued U.S. military access to Kwajalein Atoll defense sites until at least 2066, and possibly to 2086 at the U.S. option. The amended Compact also strengthens one key additional area, immigration, by adding new restrictions and clarifying the applicability of the Immigration and Nationality Act to Compact migrants.

The amended Compacts are complex and should be generally supportable by Congress. There are, however, two areas of ongoing concern that the Committee may well want to address further or clarify as the legislation advances: the proposed termination of FEMA's role in providing disaster assistance under the amended Compacts, and the future of educational assistance, such as Pell Grants, provided to the Freely Associated States outside of the Compact and its related agreements.

Here I would like to inform Members that all of the relevant authorizing Committees, on a bipartisan and bicameral basis, are working together with the Administration to talk through these complex substantive and jurisdictional issues in a timely manner. It is my strong hope and intent to gain further clarification on several of these questions by the time this legislation is considered by the full House.

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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