The Compacts of Free Association and the Role of the U.S. Coast Guard

The United States recently completed negotiations for the Compacts of Free Association funding assistance with the Federated States of Micronesia (FSM) and the Republic of Palau. With two of the three deals between the United States and the Freely Associated States (FAS) completed, the United States is currently negotiating an agreement with the Republic of the Marshall Islands (RMI).

The FAS are a bedrock of U.S. strategy in the Pacific Islands, a region whose strategic value has gained appreciation in recent years amid diplomatic and security outreach from China. With funding provisions for each of the FAS approaching expiration, the United States has completed or is in the process of completing negotiated extensions that not only provide additional funding but also improve implementation of the Compacts of Free Association that govern U.S. relations with each country. As part of the renewed engagement in the region, the U.S. Coast Guard (USCG) has several opportunities to play a significant role in enhancing the value the FAS get from their association with the United States.

The Compacts of Free Association and U.S. Strategy in the Pacific

Since 1986, the FSM, the RMI, and the Republic of Palau have had Compacts of Free Association with the United States, giving the United States authority and responsibility for security and defense matters within the FAS while also foreclosing defense access to other countries such as China. Another critical component of the Compacts of Free Association is the economic assistance provided to the FAS.  While the Compacts of Free Association are not due to expire, the Title II funding provisions from the previous negotiation were set to expire in the near future. As a result, prior to late May of this year, funding assistance was set to expire in September 2023 for the FSM and in September 2024 for Palau. As of now, funding will still expire in September 2023 for the RMI. However, all indications are that the United States is looking to complete the final assistance agreement with the RMI before the September 2023 deadline and has already signed a memorandum of understanding with the RMI.

These renegotiations come amid a renewed U.S. focus on the Pacific Islands that has developed in response to China’s attempts and, in some cases, successes at gaining influence in the region. China’s recent diplomatic success in the Solomon Islands has caused concern in Washington about other security arrangements Beijing might want to pursue with other Pacific Island nations. As part of Washington’s counter, the U.S. has, and is, opening embassies across the region. The administration clearly sees the FAS as core partners in their U.S. Pacific strategy. In its Pacific Partnership Strategy, the administration lists “A strong U.S.-Pacific Islands Partnership” as one of the four principal objectives, noting the special importance of the FAS:

“We will fulfill our historical commitments and strengthen our enduring relationships with the full Pacific Islands region, including our special relationship with the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.”

Successfully extending assistance agreements with all three of the FAS is crucial to shoring up the United States’ interests in the region. It was reported that the Biden administration is seeking congressional approval of around $7.1 billion over 20 years. It is yet to be seen how much of the asked-for $7.1 billion will be approved by Congress; the final number will likely be much high than the prior agreement reached in 2003 but potentially lower than the asked-for $7.1 billion.

This is not to say that the only aspect of the compacts being negotiated is the dollar amount. The negotiations allow for dialogue on myriad other issues that might arise during the terms of the upcoming deal. One way for the U.S. to show value to the relationship is by aiding the FAS in combating illegal maritime activities, building maritime law enforcement capacity, and working with local government and civilian partners to conduct a range of maritime domain training using the USCG as the interlocutor.

U.S. Coast Guard and Freely Associated States

The USCG has an opportunity to play an increasingly impactful role in U.S. influence and diplomacy in the Pacific, especially with the FAS.

The USCG currently conducts operations such as Operation Blue Pacific, which is designed to promote security, safety, sovereignty, and economic prosperity in Oceania. Still, more can be done, and with more frequency, with those same mission sets. Ensuring security, safety, sovereignty, and economic prosperity is an attractive value add that the USCG can help facilitate for the FAS. Moreover, the long-established relationship between the FAS and the USCG makes the USCG an ideal partner with a lower barrier to entry than if the FAS were to look elsewhere for maritime cooperation.

The USCG conducts operations in the Micronesia region through its Micronesia/Sector Guam unit. Sector Guam participates in Operation Rematau, which supports the overarching Operation Blue Pacific and includes 3 Sentinel-class cutters, CGC Oliver Henry, CGC Myrtle Hazard, and CGC Frederick Hatch. The USCG also plans to expand and add a medium-endurance cutter to the Pacific area of operation by 2024. Among the missions tasked to the USCG are search and rescue, combating IUU fishing, maritime safety, and community engagement—the USCG partners with local law enforcement, civil society, and other coastguards to accomplish these missions. Engaging with the whole of the FAS and their societies allows for greater buy-in to the USCG-FAS mission.

While the Compacts of Free Association funding agreements are not necessarily about expanding military access, the funding will go to Coast Guard relevant activities such as combating illegal, unregulated, and unreported (IUU) fishing. IUU fishing impacts local economies and livelihoods throughout the FAS. The USCG should be seen as a capacity multiplier in combating IUU fishing throughout Micronesia. Through training and exercises, best practices for new equipment and maritime abilities are set and operationalized. Maritime domain awareness is another area ripe for coordination and capacity building. One recent example of the importance of domain awareness is the RMI’s use of software to identify IUU fishing activities. The USCG can fund and help standardize the use of commercial software to fill in the gaps in-between USCG patrols and enable local jurisdictions to identify potential fisheries violations. Increasing the capacity of the FAS to police IUU fishing in their territorial waters helps local economies and allows each state to enforce sovereignty over their territorial waters and the marine life within more effectively.z

In addition to capacity building, the U.S. can take on greater responsibility where the value proposition makes sense. For example, the USCG recently came to an agreement with the FSM that allows the USCG to enforce FSM fisheries laws. The agreement is an expanded version of a ship rider agreement that the USCG has with other Pacific Island countries. A ship rider agreement allows FAS personnel to ride along with the USCG. In contrast, the new agreement allows the USCG to enforce FSM fishery laws by observing, boarding, and searching vessels in FSM waters with remote coordination from FSM officers. In addition, with the arrival of the new medium-endurance cutter, the USCG will be on station longer and will boost security in the waters surrounding the FAS.

Another mission set the USCG participates in is strengthening ties with the local communities by providing needed equipment and medical supplies to remote areas. The USCG also conducts community engagement and drills with civilian organizations to promote safe boating procedures as well as efficient search and rescue operations. The USCG is uniquely prepared for this type of community diplomacy.

Completing all three Compacts of Free Association negotiations during the renewed U.S. focus on the Pacific should usher in a time where all parties in the relationships come away from the negotiating table with meaningful deliverables. The U.S. will benefit by shoring up U.S. diplomatic and security interests in the Pacific at a time when China is challenging previous security arrangements in the region. The FAS will get much-increased assistance; furthermore, the U.S. Coast Guard can demonstrate that the United States is a reliable partner in promoting security, safety, sovereignty, and economic prosperity in the FAS and throughout the region.

Ray Joseph is a former research intern with the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies in Washington, D.C.