Opening Statement of Allen Stayman, 

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United States – Federated States of Micronesia Compact of Free Association

U.S. Special Negotiator First Round: 
U.S.-Marshall Islands Compact Negotiations 
(Kaua‘i, Hawai’i, October 20, 1999)

The Compact of Free Association, which went into effect thirteen years ago, governs the special relationship between the United States and the Marshall Islands. Entering into the Compact signaled an end to the United Nations Trusteeship and the beginning of a new and special relationship--free association--between the U.S. and the Marshall Islands. I can say without hesitation that the Compact has been a tremendous success in meeting its primary goal--affirming the right of the people of the Marshall Islands to enjoy self-government. The Compact has been the catalyst for achieving the Marshall Islands' political transition from Trust Territory status to membership in the family of nations.

We are here today to begin discussions on the expiring provisions of the Compact, which include certain financial and program assistance provisions set forth in Title II, and Title III (Security and Defense Relations). As stated in the first sentence of Title II, this assistance is provided to "assist the Government of the Republic of the Marshall Islands in their efforts to advance the economic self sufficiency of their peoples. . .". Put in other terms, we are now focusing ourselves on the task of furthering the economic transition from Trusteeship to self-sufficiency, just as we have successfully achieved the political transition from Trusteeship to self-government. I believe that all would agree that the pace of this economic transition has not met our expectations. This does not lessen our commitment to Free Association or, as President Clinton stated last November in Guam, our desire to remain a partner in the efforts of the Marshall Islands to "promote growth, reform, and good government." It is my conviction that a continued commitment to this special relationship continues to be in the mutual interests of both our countries.

Upon my selection as Special Negotiator and prior to seeking my initial negotiating authority, I consulted with numerous officials in the Administration and in the Congress. A recurring theme in these talks was that, before considering future U.S. assistance, these officials want to be provided with information in two general areas.

First, many of these officials seek an accounting and assessment of past U.S. assistance in order to understand the role of such assistance in meeting the objective of advancing self-sufficiency. In particular, they wish to know what lessons have been learned from the previous thirteen years.

Second, these officials wish to see the Marshall Islands’ strategy for advancing economic self-sufficiency in the future. This information is needed in order to understand the context within which any future U.S. assistance would be used and to assure that any such assistance would be used most effectively.

A review of past assistance has already begun. As you know, the Chairman of the U.S. Senate Committee on Energy and Natural Resources and the Chairman of the House Subcommittee on East Asia and the Pacific have requested that the General Accounting Office report to these Committees on U.S. assistance provided under the Compact, make an assessment of that assistance, and make recommendations on future U.S. policy. I have copies of those requests for your information. I understand that the GAO plans to have a preliminary draft of its accounting of U.S. assistance by early December of this year. Congressional sources have also said to expect oversight hearings at the beginning of the next session of Congress.

I was pleased to learn, during my trip to Majuro in July, of the Finance Ministry's Review of Compact Assistance. It is very timely, and meshes well with the efforts of our Administration and the GAO. A preliminary summary of assistance has been made available to my office, which I am also providing for your information.

I was also pleased to learn during my July trip of the work of your government's Commission on Sustainable Development. This effort also meshes well with the request made by various officials for information on the government of the Marshall Islands’ strategy for advancing economic self-sufficiency. Because it has been generally recognized that economic development has not met expectations, the United States, the Asian Development Bank, and other bilateral donors have lent their support to the Marshall Islands’ planning efforts in recent years by providing special technical assistance. With this technical assistance, a two-pronged economic development strategy has been developed that focuses on promoting public sector reform and private sector development. The United States government is eager to learn how this strategy is working and what the role of the Commission is in further developing and implementing this strategy.

Given the GAO report and the anticipated oversight hearings, I believe we need to focus our first several months of effort on working together closely to provide GAO and the Congress with the information they seek. It is imperative that there be an accounting and assessment of Compact assistance that will respond to these broad questions before we can move on to our next task--developing recommendations for the future.

Organization and Negotiating Authority

I would like to describe to you briefly my Office and current negotiating authority. As you know, U.S. policy for the Freely Associated States is developed within the Interagency Group on Freely Associated State Affairs (the "Interagency Group"). The Interagency Group was established by Executive Order l 2569 and is chaired by a designee of the Secretary of State. As Special Negotiator, I am the Director of the Office of Compact Negotiations, an office within the State Department's Bureau of East Asian and Pacific Affairs ("EAP"), and I report directly to the chairman of the Interagency Group, who is also the Deputy Assistant Secretary of State for EAP. I also report to officials at the National Security Council and the Office of Management and Budget. Both are a part of the White House. Finally, given my experience with the negotiations of the Compact in the 1980s, I have been particularly sensitive to the need for close and continuing contact with members and staff in the U.S. Congress.

Consistent with long-standing practice, all United States Government representatives who are empowered to negotiate binding commitments must have the scope of their negotiating authority approved in advance within the Administration. It is common for this authority to be modified as negotiations evolve. At this time, my negotiating authority as Special Negotiator is limited to discussing the scope of negotiations and proposing general principles to guide us in our negotiations. Before seeking further negotiating authority, I will be working with the Interagency Group to assess assistance and discuss what assistance is recommended to assist you in advancing economic self-sufficiency. Only after thorough discussions within the Administration, and with appropriate contacts with the Congress, will I seek authority to negotiate provisions for the future.

Scope of Negotiations

In addition to beginning discussions on the use of past U.S. assistance and on the RMI’'s strategy for promoting economic self-sufficiency, I believe we should begin outlining the scope of our negotiations. While we will obviously be addressing the expiring provisions of the Compact -- specifically, several provisions in Title II (Economic Relations), and all of Tile III (Security and Defense Relations) -- I believe these negotiations provide the best opportunity to make other necessary adjustments to the Compact and its subsidiary agreements. To date, I have received instructions to raise the subject of the immigration privileges found in Title I of the Compact. I also expect that other issues for negotiation will arise as we progress through our negotiations and as I receive more feedback from other U.S. agencies through the Interagency Working Group. These negotiations offer an excellent vehicle for obtaining Congressional consideration and approval of other changes we may agree to. At the same time, we do not want to burden ourselves with so many issues that we risk running out of time before expiration of the current term of assistance. As a practical matter, it is reasonable to expect that Congress will require two years -- a full Congress -- to consider and enact new provisions.

Immigration

A number of members of the U.S. Congress have already brought to my attention a specific issue that does not involve an expiring Compact provision. That issue concerns the privilege afforded to certain citizens of the Marshall Islands to enter, reside in, and engage in employment in the United States. While the immigration provisions of the Compact are not expiring, they are of concern to the United States. Several members of Congress have voiced their desire to see, among other things, that the existing grounds for inadmissibility currently in effect under U.S. immigration law be more vigorously enforced, and that an appropriate mechanism for ensuring admissibility prior to arrival in the United States be created.

In addition, I have been told by certain members of Congress that Compact impact funds -- that is, payment of the compensation authorized to the U.S. territories and the State of Hawaii for the impact of migration of RMI citizens on educational and social services -- remains a key issue in any consideration of future assistance to the RMI. I believe these negotiations are the proper forum for revisiting the existing Compact provisions regarding immigration, to determine how to respond to these important concerns.

Statement of Principles

A final topic for initial discussion is the desire to develop a general statement of principles. Reaching an agreement on fundamental principles would be helpful in guiding future discussions and in signaling to our respective governments that the basis of the special U.S.-RMI relationship of free association remains strong. I believe it is important to let the world know that, while our nations may have disagreements, those disagreements do not affect our underlying special relationship. I therefore propose we make a joint statement continuing our commitment to: (1) advance economic self-sufficiency for the people of the RMI; (2) affirm current economic strategy objectives of reforming the public sector and supporting the private sector; (3) develop more effective accountability mechanisms for the use of future U.S. assistance, and (4) continue the security and defense relationship as set forth in Title III of the Compact.

Next Steps

I would like to share with you a draft agenda modeled on the agenda that I have presented to representatives from the Federated States of Micronesia for our first session on November 3rd. This draft agenda may serve as a starting point for determining our next steps. As you can see, the suggestions I have made today for the content of our further discussions are set forth as: (1) a discussion of past U.S. assistance; (2) a discussion of the Marshall Islands’ economic strategy; (3) a discussion of scope for the talks, and (4) a proposal to reach agreement on principles. Obviously, U.S. relations with the FSM and the RMI differ. For this reason, we will be conducting our negotiations with the FSM and your country, to the extent practicable, on a bilateral basis. Nevertheless, certain principles transcend these bilateral differences. At this initial stage in our talks, we must all build on these basic common elements to lay a firm foundation for future talks.

Conclusion

In closing, I want to point out that we are entering into a process in which many people will ask tough questions about the use of past U.S. assistance, and about the desirability of continuing to maintain similar assistance in the future. Others have asked, and will continue to ask, whether the Marshall Islands is truly committed to economic reform. I need your help in answering these difficult but important questions.

The Marshall Islands is a trusted partner and ally to the United States, and an esteemed member of the family of nations. I believe in the special nature of U.S.-Marshall Islands relations, and in our continuing mutual interest in maintaining our special relationship.

Times have changed since 1986. So, too, have the interests of the United States and the Marshall Islands. As in all relationships, ours must adapt to meet the needs of changing times. That is our challenge, and I believe we will succeed in the task before us.

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