Government of the Federated States of Micronesia



Joint Communiqué

San Francisco, California, May 24, 2002 - The fifth round of negotiations between the United States (U.S.) and Federated States of Micronesia (FSM) on the Compact of Free Association was held in San Francisco on May 23-25, 2002. The FSM Chief Negotiator, Senator Peter Christian, and U.S. Compact Negotiator, Mr. Albert V. Short, opened the two-day session with welcoming remarks.

Mr. Short highlighted the importance of the FSM commitment to contribute at least $30 million to the trust fund by FY-2004 to ensure the viability of the trust fund. He also emphasized that the Bush administration wishes to submit an amended Compact to the U.S. Congress by June 30 to facilitate Congressional consideration during the coming legislative session, to further the objective that the proposed economic assistance will be available when the current assistance ends on September 30, 2003, and to continue the Title Three defense relationship into the amended Compact period.

Senator Christian noted receipt of the new Title Two economic assistance offer from the U.S., and stated that before the FSM can seriously consider the latest proposal other elements of the U.S. drafts need to be clarified. These elements include the costs of annual audits for the FSM, proposed immigration provision changes, possible elimination of current federal programs, and transition to the international postal rate schedule.

Senator Peter Christian also indicated the FSM's willingness to accept an appropriate annual decrement in the economic assistance formula provided that the goal of sustained economic progress can be met, particularly in the early years of the new arrangement.

Over the three-day session, the two delegations focused on Title Two language, clarifying grant and federal program assistance and narrowing the gap between the two current proposals on the table. At the concluding session, the two negotiators initialed portions of the Title Two economic assistance text. This is a major step forward in the negotiations.

The U.S. also explained its rationale for proposed amendments to Titles One, Three, and Four. The FSM delegation restated that its mandate does not include negotiation authority at this time to address these titles but the FSM Government will address these proposed changes on a government-to-government basis.

Both delegations will be conducting further joint technical meetings on the fiscal procedures agreement, the Joint Economic Management Committee, and the Trust Fund.

The FSM delegation welcomed the presentation and discussion of the Department of Defense's Title X Humanitarian Assistance Program, and the Civic and Humanitarian Assistance Program (CHAP), which will replace the expiring Civic Action Teams under the Compact. Senator Christian expressed appreciation on behalf of the FSM delegation for the accommodation by the U.S. on the new programs.

The FSM delegation also expressed it appreciation for the briefing by the U.S. Postal Service (USPS) and the USPS's accommodating new proposal.

The CHAP, Federal Deposit Insurance Corporation, and U.S. Postal Service subsidiary agreements were initialed by both sides.

The U.S. Compact Negotiator restated the U.S. objective is to conduct technical discussions in the coming weeks with the objective of holding a concluding round of negotiations in June 2002.

Both nations remain encouraged by the spirit of teamwork, level of cooperation, and overall understanding of both nations' long-term goals and objectives.

Senator Peter Christian
Chief Negotiator for the FSM's
Joint Committee on Compact
Economic Negotiations

Albert V. Short
United States Compact Negotiator