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JOINT COMMUNIQUÉ
OF THE SECOND
MICRONESIAN PRESIDENTS' SUMMIT

The Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau

KOROR, Palau (July 31, 2002) - The Presidents of the Federated States of Micronesia ("FSM"), the Republic of the Marshall Islands ("RMI") and the Republic of Palau ("ROP") held their Second Presidential Summit on July 31, 2002 to discuss matters of common interest. This meeting confirms the firm commitment established in the First meeting of the three Presidents, held in Pohnpei, FSM in May of 2001, to establish closer ties and to communicate on national and regional issues of importance to the three nations.

President Leo Falcam and President Kessai Note conveyed their appreciation to the President and the People of Palau for the warm greeting and generous hospitality extended to them and their delegations during this important meeting. President Tommy E. Remengesau, Jr., the President of the Republic of Palau, expressed his appreciation to the FSM and RMI Presidents for their attendance and active participation in this Second Presidents' Summit.

The discussions involved a broad spectrum of national and regional issues. Specific issues discussed by the three Presidents included the following:

National Exchange Carriers Association: The President of the Republic of Palau gave a briefing of Palau's efforts to gain benefits under 'Universal Services' with the Federal Communications Corporation (FCC), including membership in the National Exchange Carriers Association ("NECA"). The two Presidents expressed their support for Palau's efforts and offered whatever assistance they may provide to ensure Palau's success.

Trans-Pacific Fiber Optic Cable: The Presidents of the FSM and the RMI gave updates on the efforts of their respective countries to bring trans-oceanic fiber optic submarine cable transmission systems to their respective countries and to the region. Both Presidents indicated that they would include Palau in their future discussions with interested international partners. Palau expressed interest and appreciation for such efforts and indicated that they would, upon receiving a final determination on their FCC petition, take a more active role in this national and regional effort. Palau also indicated that a tentative proposal to initiate a fiber optic system from Guam to Yap and Palau was currently being reviewed by the Republic of Palau. Palau further indicated that any successful cable project in Palau would include consideration of Yap's needs for fiber optic cable.

Japan Information and Communication Technology Grant Request ("ICT"): The Palau Chief of Staff, Billy E. Kuartei, who was designated as the 'Point of Contact' on the Japan Information and Communications Technology Grant Request at the last Summit, reported that no official word has been received from the Japanese regarding the grant due to their desire for more information on the ICT needs in the three FAS states. Research into such ICT status will continue in a meeting in Honolulu in August of this year.

Extradition Treaties and Laws: The Presidents followed up on prior discussions regarding the issue of cooperative efforts, through legislation or treaties, to facilitate extradition between their respective nations. Palau reported that they had passed legislation that will simplify the process for extradition between the three nations. The three countries agreed to keep each other informed on their efforts to adopt legislation and associated regulations.

Marine Surveillance: The Presidents of the three nations, recognizing their mutual interests and the proximity of their EEZ's, determined to follow through on their commitments expressed in the 1st Summit and to continue to work together to coordinate efforts regarding their respective Marine Surveillance programs.

After the 1^st Summit, the three nations signed, on February 7, 2002, a Subsidiary Agreement to the Niue Treaty. This Agreement enhances the ability of the three countries to enforce fisheries, customs and immigration laws. The President's also agreed to support 'Operation Island Chief 2002', a tri-lateral surveillance operation to be undertaken from August 5 - 23, 2002, as well as subsequent operations and efforts to support the subsidiary agreement.

Quarantine Standardization: The three Presidents recognized and reiterated their commitment during the First Summit to update and standardize quarantine regulations and to enhance the free movement of products amongst their nations. Palau indicated that it was moving towards the implementation of this goal through the hiring of a consultant within the context of a Bio-Safety Enabling Grant. Through this grant, the consultant will coordinate a review of current quarantine laws and regulations and will make recommendations for revision and implementation. The ROP offered to incorporate a standardization component to the research effort in conjunction with the FSM and the RMI.

Immigration: The three Presidents agreed to continue to work together in order to harmonize immigration provisions in each of the three countries in order to ease the process of entry and departure. It was agreed to work together on these issues and to begin by developing a consolidated immigration/customs/quarantine form.

College of Micronesia ("COM") Treaty Extension: During the 1^st Summit, the Presidents agreed to approve the extension of the COM Treaty to protect continuation of the land grant assistance program until September 30, 2003 and directed their respective foreign ministers to sign the amended treaty. The amended treaty was signed as directed. The Presidents have further agreed to follow up on this action by recommending the establishment of a tri-lateral working group, to be guided by the Presidents of the respective colleges. This working group will discuss the development of separate treaties, the potential further extension of the treaty and the division of funding under the current treaty. The Presidents directed the three college Presidents to make recommendations by May 31, 2003. The working group will also make recommendations of negotiating strategies for discussion with the United States. It was also noted that consideration should be given to the need and potential mechanisms to expand endowment funds for the three colleges.

Anti-Terrorism Security Issues: Recognizing that the events of 9/11 created a new security environment around the world and in the FAS region, the Presidents agreed to coordinate efforts to enhance security in each country. In this effort, they agreed to join forces to lobby the United States to provide additional financial assistance in complying with new regulations of the Federal Aviation Administration, and other federal agencies, and to provide the necessary technical assistance and equipment to achieve compliance. Each nation is currently reviewing counter-terrorism legislation.

Prior Service Appropriation from the U.S. Congress: The Presidents agree that the funding of the Prior Service Benefit Program is a high priority of all three nations. While the U.S. Congress appropriated $700,000 for Fiscal Year 2001, this amount fell far short of the actuarial estimate of $23 million needed to meet the requirements of the fund over the next 4 years. Consequently, benefits have been severely cut back to permit the Prior Service Office to continue to function and to direct its efforts towards gaining the full U.S. appropriation. Prior Service benefits flow to approximately 3500 eligible beneficiaries. The Presidents therefore agreed to coordinate lobbying efforts in Washington D.C. to gain funding as soon as possible.

Recognizing the severity of the situation, the Presidents agreed to continue to vigorously lobby the U.S. Congress. They also agreed to jointly lobby the Department of Interior to directly request the appropriation by the U.S. Congress.

Compact Negotiations on Multilateral Issues (the FSM and the RMI): While only the FSM and the RMI are currently renegotiating their Compacts of Free Association, it was agreed that certain issues could adversely affect all three Freely Associated States. The Presidents discussed potential joint action on these common issues.

1. Immigration Issues

   A recently submitted proposal by the U.S. seeking to amend the non-expiring Title I immigration provisions of the Compact of Free Association of the FSM and the RMI has raised concern amongst the three FAS states. Each country expressed the feeling that immigration is one of the primary principles upon which free association is based. They also expressed concerns regarding the negotiation of non-expiring issues through the amendment of the Compact. Palau indicated that it feels that it is an indispensable party to this negotiation and that such negotiation should not take place without its participation.

   Recognizing the major impact that this change in status could have, the President's have agreed to coordinate efforts to overcome these proposals. The RMI and the FSM invited participation in future negotiation, recognizing their common interest in the immigration issue. It was consequently agreed that while each of the three countries will continue to pursue their own negotiations with the United States on the issue, they will coordinate their lobbying efforts with the Executive and Legislative Branches of the U.S. government.

2. Compact Subsidiary Agreements and Other Compact Renegotiation Issues

   The FSM also reported on the status of its negotiations regarding a number of existing subsidiary agreements, including postal services, FEMA, FAA, Weather Services and Telecommunications. They also discussed the newest proposal to replace the Civic Action Teams with a new program (the 'Civic Humanitarian Assistance Program'). The Chief Negotiator for the FSM, Peter Christian, reported on the status of current Compact negotiations regarding economic provisions.

Pacific Island Forum (PIF)

1. Trade Agreements

   The three Presidents agreed to separately and jointly press the United States for an opinion from the Department of State regarding the Most Favorable Nation Clause within their respective Compacts. If the United States were to invoke the clause upon the ratification of the two companion Pacific Island Forum trade agreements (PACER and PICTA), it would result in reduced revenues from imported U.S. goods. The FAS States will therefore seek an interpretation of the clause whereby tariffs/import taxes on U.S. goods will not be eliminated/waived unless and until there is actual trade in competing goods. More generally stated, the ratification and entry into the force of the trade agreements would not be a triggering mechanism for the MFN provision. Only actual trade in goods would trigger the clause.

2. Restructuring the PIF

   It was agreed by the three Presidents to further study the issue of restructuring the Pacific Island Forum. Proposals on the table would either establish a new body or a separate sub-organization consisting of only the Pacific Island Countries and not Australia and New Zealand. It was also agreed to research and review the issue of who shall hold the Secretary General position in the PIF. The President of the FSM suggested looking carefully at this issue. The President of the Republic of the Marshall Islands further recommended that the three Presidents meet prior to the next Annual Meetings of the PIF.

3. ACP/EU Economic Relations

   Concern was expressed regarding the current focus of the ACP and the PIF towards trade issues rather than economic development. This focus is historical and is a primary consideration of other ACP countries. The Presidents concurred that trade is not the primary issue of the FAS states in the context of the Cotonou Agreement. Rather, it was agreed that economic development has the greatest potential impact on all three of the FAS states. It was therefore determined that all three nations would continue to push for greater emphasis on broad-based economic partnerships with the European Union (EU).

   In addition, concern was also expressed regarding the current status of the FAS states within the context of ACP/EU relations. Understandably, as new members of the Cotonou Agreement, FAS states are having difficulty gaining priority treatment under the Agreement. However, the Cotonou Agreement has several clauses requiring special treatment related to the unique circumstances of island states and small economies, for which all FAS states qualify. President Falcam expressed concern that the unique issues of the Pacific island nations be considered, not just those of the Caribbean. It was therefore agreed to join together and work towards gaining fair and equal treatment under the Agreement and in working towards the implementation of these clauses.

Climate Change

All three Presidents agreed that Climate Change remains a priority concern in the region. The Kyoto Protocol, which implements the Climate Change Convention, is near implementation, requiring ratification of countries producing 55% of all green house gasses. The two countries whose ratification can drive the international community over this threshold are Russia and Canada. Consequently, it was agreed that the FAS states jointly request the ratification of the Protocol by Canada and Russia, and a negotiated solution be found to the stated FAS concerns.

World Summit on Sustainable Development (WSSD)

The three FAS states will be well represented at the World Summit on Sustainable Development in Johannesburg, South Africa in August of this year. In order to support their common agenda, the three FAS states agreed to work together on the following two issues:

1. Separate Section in Draft Text

   Currently, the draft text at the WSSD has a separate section recognizing the unique and vulnerable position of small island nations in the world economy. The only other region of the world that has its own section in this document is Africa. Consequently, the three Presidents, all who will attend the conference, agreed to make every effort to maintain this special treatment in the text.

2. Partnership Agreements

   The three Presidents also agreed to work together, before the Summit, on developing one or more partnership agreements for further implementation of Agenda 21. Such partnership agreements are one of the major outcomes anticipated at the WSSD. As the current list of such partnerships does not include waste management, recycling, GIS data and information management and national planning, the Presidents agreed to develop and present appropriate proposals from these important areas.

Regional Alliance: Recognizing the fact that each of the three nations is becoming more involved in regional and international forums, it was agreed to begin negotiating with one another to establish a North Pacific regional alliance. This official alliance would provide a single voice, on appropriate regional issues.

Commission for the Management and Conservation of Highly Migratory Fish in the Western and Central Pacific Ocean: The FSM requested the support of the Republic of the Marshall Islands and the Republic of Palau in locating the headquarters of the Commission for the Management and Conservation of Highly Migratory Fish in the Western and Central Pacific Ocean in Pohnpei, FSM. The RMI and the ROP agreed to endorse the FSM's bid to host the Commission.

Palau Pre-Water Forum: The Republic of Palau is hosting a Pre-Water Forum between October 14 and October 17, 2002. This forum will be preliminary to the 3rd World Water Forum to be held in Kyoto, Japan, scheduled between March 16th and March 23rd, 2003. It is anticipated that at least 14 nations and over 450 country representatives will participate in the event. The Presidents of the FSM and the Marshalls agreed to support Palau's efforts and to send delegations to attend the event.

Extension of the University of the South Pacific in the RMI: President Note indicated that the RMI is seeking to establish an extension to the University of the South Pacific in the RMI and requested the assistance from the other FAS states. Kiribati is also interested in the campus. The Presidents of the FSM and Palau indicated that they would support the RMI's bid in all appropriate forums.

The three Presidents closed this historic Second meeting with a strong commitment to continue dialogue on a regular basis. The Marshall Islands offered to host the next meeting at a later date.