Government of the Federated States of Micronesia

Opening Remarks by

The Honorable Peter Christian
Chief Negotiator for the Joint Committee
on Compact Economic Negotiations (JCN)

at the
Sixth Round of Negotiations on
the Expiring Provisions of the
Compact of Free Association
between the FSM and the US

Honolulu, August 26, 2002

Check Against Delivery

Mr. Short, Ambassadors Marehalau and Dinger, Chairman Jackson and members of the U.S. and FSM teams,

We are on the final stretch of the track, coming around the bend for the final dash toward the finish line. We've put good mileage behind us. What is left in front of us will demand our whole attention, it will require unselfish use of all our reserved resources to make sure that we don't simply stumble across the finish line, but that we cross over in good form, ready for the next challenge.

It is my hope, and I'm sure it is the hope of all of us, that we can reach agreement on most, if not all, the remaining issues so that our next round will be dedicated to the ceremony of final approval and signing.

However, before that can happen, we have our work cut out for us. There remain serious differences between us on critical issues. I propose that this week we focus our minds and energies on these few remaining roadblocks. We will work as hard and as long as it takes to reach an agreement. I am confident that with the talent on our respective teams, solutions exist.

During the hearing before the House Resources Committee, Chairman Hansen encouraged us to reach an agreement prior to the end of September 2002. We heard him and we understand Congress' desire to begin work on the new Compact as quickly as possible. We agree that time is of the essence.

the JCN meeting preceding this Round of Negotiation, we identified what we believe to be the major areas of concern. A clarification and better explanation of provisions in the changes that you have suggested may solve some of the problems. Others are more serious and will require much work. Let us dedicate ourselves to the task of meeting these issues head on and finding a way to come to an agreement.

But, please do not mistake our eagerness to reach agreement as a willingness to abandon our responsibility to the people we represent. Rather, interpret it as our commitment to fully consider alternative solutions with an open mind and to apply the best efforts on our side to participate with alternatives of our own. Reasonable people often disagree. More reasonable people find ways to agree.

A list of the items we feel most strongly about includes:

  • The overall level of grant funding.

  • The implementation of many of the changes in the Fiscal Procedures Agreement. We need to know much more about how these proposed changes will impact our constitutional requirements and existing fiscal procedures. In this document we see restriction and controls tailored to assist in the implementation of the Compact. Fundamentally, it is a good document. And such a document is necessary. However, there are particular points on which we will have to devote serious time to make sure our two sides are able to accept the dictates of the documents.

  • Graduation to management of the Trust Fund.

  • The basic inflation adjustment formula.

  • The defense veto.

  • The ability to engage in cash management.

  • FEMA.

Mr. Short, as I have stated before, my colleagues and I greatly appreciate the energy and thoughtfulness you have brought to the process. Further, you and your team have worked hard with our advisors in Washington. We of the JCN are grateful for your diligence.

I am hopeful that this 6th Round of Negotiations will produce the breakthrough for which we have all been searching. Therefore, let me urge that we approach this Round as a meeting of the close friends we are, both as nations and, more importantly, personally. Let us work hard, think clearly, examine all possibilities and do our best in service to our respective nations. If we do that, we will succeed.

Recognize, however, that while the United States is, and will be, a partner with us in the implementation of this amended Compact, it is the FSM who will live with it day by day. I know you will keep this in mind as we deliberate.

Again, we welcome you and look forward to a very productive meeting.