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By Giff Johnson For Variety

MAJURO, Marshall Islands (June 11, 2002 – Marianas Variety)---Marshall Islands negotiators head to Washington, D.C. next week for talks with the State Department that they hope will lead to a formal round of negotiations on a new Compact funding agreement in July.

"There is now progress with respect to the U.S. offer on the base grant," Foreign Minister Gerald Zackios said. "But the U.S. trust fund proposal is inadequate. We need to sit with the U.S. to discuss it. We can’t reply formally until we discuss it further."

In a second counter proposal issued in late May, the U.S. increased its funding offer from $23.8 million annually to $33.9 million, while reducing its proposed trust fund contribution from $8 to $7 million annually for 20 years. The Marshall Islands is seeking $36.6 million in base grant funding and a $12 million annual trust fund contribution.

Both Zackios and Compact negotiator Robert Muller are leaving Majuro for Washington. Muller will hold technical talks on Compact and subsidiary agreements next week and Zackios, following attendance at the World Food Summit sponsored by the Food and Agriculture Organization in Rome next week, will return for discussions in Washington.

Muller said he anticipates that the Marshall Islands and U.S. negotiators will be able to initial the text of various subsidiary agreements and the text of the funding agreement, even though the two sides continue to disagree on the funding amounts. Marshall Islands Compact staff are currently in Washington now working over drafts of legal language in the agreements, Muller said, adding that while the two sides continue to haggle over funding issues, the language of the agreements may be possible to initial, showing basic agreement. The texts will still need to go through the Marshall Islands’ approval process before they are considered final, he added.

Zackios said the second funding proposal from the U.S. is more "positive" than the first, but much is left to negotiate. There is little possibility that the Marshalls and U.S. talks will meet a U.S. deadline of the end of June to sign a new deal to replace the current Compact funding that expires next year.

Zackios said the U.S. and Federated States of Micronesia negotiators are meeting in a formal session at the end of June, which could wrap up the major portion of the Compact talks for the FSM, as negotiators have already initialed some sections of the new agreement.

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/ Marianas Variety.

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