---

Renewed team spirit ends Fourth Round of Compact Negotiations

PALIKIR, Pohnpei (FSM Information Service): January 11, 2002 - The Fourth Round of the Compact Economic Negotiations between the United States and Federated States of Micronesia concluded on December 14 2001, in Honolulu with renewed spirit of teamwork and commitment from both sides.

The Joint Communiqué has both sides reaffirming their commitment to bring the negotiations to a mutually satisfactory conclusion: Based on the Joint Statement signed January 11, 2001, which reasserted the guiding principles and structure for economic assistance, the United States and Federated States of Micronesia again reaffirmed their special relationship, as reflected in the Compact of Free Association.

The FSM and US representatives renewed their commitment to these previously stated principles and a strategy for future U.S. economic assistance.

The FSM presented a briefing on its economic performance over the past 15 years. The economic review consisted of a detailed presentation delivered by two Micronesian economists who work with EMPAT (Economic Management Policy Advisory Team). Among other things, the FSM's review also compared the two nations' proposals to date for continued economic assistance as they relate to achievement of the FSM's self- reliance goals. The United States appreciated the very substantive graphic presentation and further discussions with the FSM's economic advisers, and commended the FSM for their efforts.

Fundamental elements of the FSM's economic proposal were highlighted and discussed by the negotiators. The FSM proposed, among other things, continued inflation indexation, full faith and credit guarantee by the United States, as well as a twenty-year time frame for continued assistance. Both delegations agreed that much work has to be done to come to agreement on new economic provisions.

The U.S. delegation presented three draft subsidiary agreements for consideration. These subsidiary agreements relate to services, and programs of the Federal Aviation Administration (Civil Aviation Safety Services and Related Programs), the Department of Transportation (Civil Aviation Economic Services and Related Programs), the U.S. Postal Service, and the Federal Deposit Insurance Corporation. The U.S. delegation also presented information on a possible Civic Humanitarian Assistance Program (CHAP). The FSM agreed to initial the Civil Aviation Safety Services and Related Programs agreement, ad referendum, and agreed to initial many paragraphs of the Postal Services and Related Programs.

The United States expressed an intention to present an official response to the FSM economic proposal tabled last May, in their next round of negotiations tentatively targeted for early February.

Legal counsels from both delegations met to consider which provisions of the Compact are expiring, need to be revised, can remain the same, or are no longer necessary.

The delegations of both nations plan to focus on certain expiring Compact provisions for the scope of these negotiations, and recognize that a number of important related matters under the Compact so the two nations can be more effectively handled on a government-to-government basis outside the renegotiations.

Both delegations plan to establish accountability mechanisms for planning, management, and assessment of Compact funding assistance. They have begun discussions on a permanent mechanism that would regularly plan, monitor, and report on Compact assistance.

Both delegations support continued Compact grant assistance, ongoing Federal program and technical assistance agreed and a Trust Fund. The Trust Fund will enable the United States to end annual Congressional appropriations at a date certain. They further agreed to continue a sectoral approach to the implementation of funding assistance.

The joint communiqué said Both delegations believe that health and education are high priorities that will underpin the FSM's goal of achieving economic self-reliance and that joint development of goals based on accountability and performance will improve and rationalize ongoing assistance efforts.

Both nations are encouraged by the spirit of teamwork, renewed determination and commitment brought to the table by each delegation in order to bring these negotiations to a mutually satisfactory conclusion by the summer of 2002.

Headed by the new Special Negotiator, Albert Short, the U.S. Negotiating Team included members from the Office of Compact Negotiations Michael Spangler, Sheldon A. Gisser, Hilda Kroll, John Fairlamb. The U.S. negotiating teams included representatives from the various U.S. Departments and agencies: Mary Comfort, Ron Riggs, William Alvis, Barry Brayer, Peter Schwarzkopf, Joe DiNuzzo, Nikalao Pula, Dave Heggestad, Thomas Bussanich, Gordon Benjamin, Roylinne Wada, Commander Job, Ron Winfrey and Leo Tudela.

The FSM Negotiating Team include the Joint Committee on Compact Economic Negotiation (JCN) members: Chairman Gerson Jackson, Chief Negotiator Peter Christian, Joseph Urusumal, Speaker Jack Fritz, Sebastian Anefal, Ieske Iehsi, Jacob Nena, James Gilmar, Dr. Olter Paul, Maketo Robert and the JCN Secretariat Executive Director, Asterio Takesy, Kensley Ikosia, Bill Nall, Dolorida Hadley, Dr. Glenn Skaggs, Jim, Stovall, Dr. J.H, Sullivan, Mick Staton, Sebia Hawkins and Lance Laack.

FSM Advisors at the negotiations include the heads of FSM s Diplomatic Missions in the U.S., FSM Post Master General and the EMPAT team - Dr. Mark Sturton, Evelyn Adolph and Steven George. Observing the Fourth Round were several key members of FSM s National Leadership.