The United States and the Federated States of Micronesia (FSM) have agreed to renew a key pact as Washington intensifies its efforts to maintain exclusive access to large swathes of the northern Pacific.
FSM is the first of three Pacific Island states that signed "Compact of Free Association" agreements with the US in the 1980s to strike a new pact with the Biden administration.
The agreements grant the US access to COFA nations' territorial waters and ensure that it retains responsibility for their defence, in return for substantial economic assistance. But all three are due to expire either this year or next.
Last year, the Biden administration stepped up negotiations to renew the COFA pacts as it intensifies efforts to reassert its strategic position in the Pacific and push back on China's growing influence.
US Presidential Envoy Joseph Yun and FSM's lead negotiator Leo Falcam yesterday initialled the agreement, which is set to be signed by US President Joe Biden and FSM's new President Wesley Simina during Mr Biden's visit to Papua New Guinea next week.
Mr Yun told Reuters the agreement was "absolutely a done deal" and that he would now head to Palau where he "hope(d) to make similar progress."
He said he would then travel on to the third COFA state, the Republic of Marshall Islands (RMI), but added it was "doubtful" that he'd be able to finalise the pact immediately.
Negotiations with RMI have been complicated by the legacy of massive US nuclear testing in the country in the 1940s and 1950s, which left deep environmental scars and health woes in the country.
Last year, more than 100 arms-control, environmental and other activist groups urged the Biden administration to formally apologise to the Marshall Islands and provide fair compensation.
The terms of the US-FSM renewed compact agreement have not yet been made public, but Washington has already signed memoranda of understanding on future assistance with the three COFA states.
Mr Yun said last month the "top-line" agreements would provide compact states with a total of about $6.5 billion over 20 years.
A key priority for the US
Mihai Sora from the Lowy Institute said finalising the agreements would be "near the top" of the Biden administration's key priorities in the Pacific, and a failure to renew would be a "significant loss" to the US.
"It would render those critical territories contestable in a way they haven't been since the agreements were first signed in the 80s," he told the ABC.
"These areas provide the United States with its most high value strategic access in the Pacific. It's closest to where the zone of conflict or friction might be in the future, and also important for US supply routes."
Mr Sora said compact states like FSM had leveraged their position effectively to extract substantial commitments from the Biden administration, which would bring lasting benefits to those nations.
"These compact states are well aware of the value of the territories they control, and this time around have managed to secure far more beneficial terms than in the past," he said.
