Digital Press Briefing with Taylor V. Ruggles, Department of State Senior Advisor for COFA Implementation, and Keone Nakoa, Department of the Interior Deputy Assistant[...]

https://www.state.gov/wp-content/uploads/2024/03/Digital-Press-Briefing-on-the-Compacts-of-Free-Association-COFA-with-the-Federated-States-of-Micronesia-the-Republic-of-the-M.m4a

MODERATOR: Greetings from the U.S. Department of State's Asia Pacific Media Hub. I would like to welcome journalists to today's on-the-record briefing with Taylor V. Ruggles, the U.S. Department of State's Senior Advisor for COFA Implementation, and Keone Nakoa, the U.S. Department of the Interior's Deputy Assistant Secretary for Insular and International Affairs. Senior Advisor Ruggles and Deputy Assistant Secretary Nakoa will provide an overview of the recent enactment of U.S. legislation providing approval and funding to bring into force new assistance agreements related to the Compacts of Free Association between the United States and, respectively, the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, collectively referred to as the Freely Associated States.

The speakers will also discuss what is contained in the new agreements, the uniquely close nature of the U.S. relationships with the Freely Associated States, and the positive impact that the compacts continue to have on people in the Freely Associated States.

With that, let's get started. Senior Advisor Ruggles, thanks for joining us. I'll turn it over to you for your opening remarks.

MR RUGGLES: Great, thank you, and good evening from Washington; good morning to those of you on the other side of the date line. We're really thrilled to have this opportunity to speak with you all about the recent passage by the U.S. Congress of legislation related to the Compacts of Free Association, or COFA. The enactment of this legislation is really a historic occasion and one worth celebrating.

On March 9th, President Biden signed into law the Compact of Free Association Amendments Act of 2024, and this represents another milestone in our deep and abiding relationships with the Federated States of Micronesia, Republic of the Marshall Islands, and the Republic of Palau, collectively known as the Freely Associated States. As Secretary Blinken said following the law's enactment, "Our special and uniquely close relationships with the Freely Associated States, underpinned by the Compacts, have been an anchor of U.S. engagement in the Pacific for decades," and now, "We look forward to working with our partners in the [FAS] over the next two decades of COFA-related cooperation."

In the case of the Marshall Islands, it's important to note that action by the Nitijeļā, their parliament, is required to approve the agreements. I understand that the Nitijeļā is considering the COFA-related agreements this week and that the foreign minister tabled the legislation on Monday. So we'll be excited and interested to follow that process.

I'll just note that the enactment of this legislation by the United States provides approval and funding for new assistance agreements between the United States and each of the Freely Associated States. In total, the new COFA-related agreements include $7.1 billion in assistance for a full 20 years. The long-term nature of the package is a reflection of the unwavering U.S. commitment to these key Pacific partners and affirms our shared visions for the future.

To our friends in the Freely Associated States, we acknowledge that the past few months have been uncertain at times. We've heard your concerns about the need to get COFA-related agreements done, and frankly, we shared them. Getting COFA-related agreements across the finish line was a top priority for the administration, and we worked hard with the Congress, with the White House, our overseas embassy teams and interagency partners, especially the Department of the Interior, to make that happen. And with continued strong bipartisan support in Congress for these agreements, we got it done.

Now, while the impetus for our discussion today was the recent successful passage of the legislation, it might be worth recalling that this is a - in this historic moment, where we came from, and why the compacts received such bipartisan support. I think DAS Nakoa will provide a little bit of historical context of our relationships that date back to World War II - the Freely Associated States - but if I can just touch on some recent history, I'll mention that these agreements, the economic assistance agreements, are only renegotiated every 15 to 20 years. So starting in the 1980s, this was the third iteration of such negotiations, and the legislation that President Biden signed on March 9th concluded a process that began nearly five years ago when then-Secretary Pompeo announced the start of negotiations to extend the Compact-related assistance.

The negotiations picked up pace when President Biden appointed Ambassador Joseph Yun as Special Presidential Envoy for Compact Negotiations in March of 2022, and throughout '22 and into 2023, we were gradually able to reach agreements with our FSM, Palau, and RMI counterparts on a range of agreements establishing the parameters for U.S. economic support for the next 20 years. And this includes funding in key areas including environment, health, education, infrastructure, and more.

One thing I wanted to underscore is the flexible nature of the funding that's provided through the COFA-related agreements. It reflects the kind of relationship the United States maintains with the Freely Associated States, one of partnership, not prescription. We believe the economic package contained in these agreements is going to play a vital role in building and maintaining a brighter, more prosperous future for the people of the Freely Associated States.

I'll just also add that while the topline figures and the nature of COFA-related assistance over the next two decades is now secured, we're continuing negotiations with the Marshall Islands and Palau for federal programs and services agreements. So those remain active and ongoing.

In terms of protocol, there's a process for these agreements to formally enter into force, with the United States and each country required to take certain steps. For FSM and Palau, an exchange of diplomatic notes effectively brought them into force. Earlier today, Deputy Secretary Kurt Campbell and FSM President Simina exchanged notes, and last Friday, March 15th, President Whipps of Palau and our ambassador in Palau, Joel Ehrendreich, exchanged notes. And as I mentioned before, the next step for the Marshall Islands is that their legislature will consider the new agreements in the Nitijeļā.

I'll just conclude saying these are very carefully negotiated agreements that reflect the hard work of our teams together, and we believe they provide an excellent framework through which we will propel our partnerships forward in continued support of a more secure, stable, free, and prosperous Pacific.

So let me stop there and turn it over to my friend and colleague, DAS Keone Nakoa from the Department of the Interior.

MR NAKOA: Thank you, Taylor, Senior Advisor Ruggles. I appreciate it. Aloha. This is Keone Nakoa, the Deputy Assistant Secretary for Insular and International Affairs. And I am here on behalf of the leadership at the Interior who joins Taylor and the rest of the world, really, in applauding the finalization of the amendments to the COFA, Compacts of Free Association, which would provide another 20 years of economic assistance to the FAS.

The $6.5 billion of assistance is critical for economic stability and quality of life for people in the FAS, which is the FSM, the RMI, and Palau. The packages will provide an economic assistance of $3.3 billion to the FSM; $2.3 billion to the RMI; and $889 million to Palau - all over the span of 20 years, or through FY2043.

The funding will provide support for basic public service deliveries such as health and education, improve infrastructure, and bolster the health of the Compact Trust Funds previously established for each of the FAS. Congress also included $634 million over the next 20 years to ensure the continued provision of U.S. Postal Service to the FAS.

As recently stated by Secretary of the Interior Deb Haaland, "Strong ties between the United States and the Pacific Islands form the foundation of our engagement and presence in the Pacific. The provision of 20 years of new economic assistance sends a clear signal of the United States' commitment to the long, historical relationships we have held with the Freely Associated States."

The FAS have been important to the U.S. national interest in the Indo-Pacific for more than 75 years, and the Interior has played an important role in that relationship, starting during the UN Trust Territory of the Pacific Islands.

The new amendments in the - to the Compacts of Free Association deepen our relationships with the FAS over the coming decades and serve as a clear signal of the United States commitment to achieving and maintaining a free and secure Indo-Pacific region. Interior has proudly served as a lead domestic implementing agency, providing and administering funding for the U.S. Government to the FAS under the Compacts of Free Association for the last four decades, during compact one from 1986 to 2001 for the FSM and RMI, and then compact two from 2003 to 2023; and then for Palau from 1994 to 2009, and 2010 through 2024.

We believe the new Compacts maintain strong U.S. oversight over every taxpayer dollar being proposed, and at the same time we have carved out room to accommodate FSM, Palau, and RMI requests for more autonomy and flexibility in framing the annual budget proposals for the effective expenditure of economic assistance.

As Senior Advisor Ruggles mentioned, through the Interior's Office of Insular Affairs, we have a long history of serving and working with the FAS through the administration of Compact funding and also through the administration of other discretionary funds that Congress has provided to the OIA for insular areas, which includes the FAS.

The Joint Economic Committee with the FSM and the Joint Economic Committee with the RMI, JEMCO and JEMFAC, currently are chaired by Assistant Secretary Carmen G. Cantor and have been chaired for the Interior for more than the past 20 years - or I'm sorry, for the past 20 years. I am also currently serving as the Compact Trust Fund Committee chair for the FSM and for the RMI, and this committee has also been chaired by the Interior for the past 20 years as well.

Every year, the OIA administers discretionary assistance and funding outside of the Compact that provides important support to the FAS as their populations - and their populations in additional ways, including through Close Up and Junior State foundation, Prior Service Benefits Trust Fund for retirees, TAP and MAP funds to the FAS, and support for regional groups such as the Island Government Finance Officers Association, the Association of Pacific Islands Public Auditors, and the Executive Leadership Development Program.

Another important piece of this passage was the inclusion of CIFA, the Compact Impact Fairness Act, which passed with the Compact of Free Association Amendments Act of 2024. Through this measure, Congress addressed longstanding challenges for citizens of each of the FAS who chose or choose to reside lawfully in the United States as provided for under the Compact agreements. This law restores eligibility for key federal programs for the FAS individuals while they are lawfully present in the United States - an important long-term solution to the financial impacts that some FAS communities have - may have on U.S. state and territorial governments. Restoring access to federal public benefits will address gaps in needed social services for families and have a significant impact on the communities where they reside.

The law also ensures that the federal government provides without significant additional administrative costs a significant portion of the financial burden currently being borne by state and territorial governments of the FAS - or for the FAS communities. Benefits and compensation from the federal government will be available to FAS individuals in whichever state or territory within the United States they choose to reside.

The COFA, though previously negotiated between our respective administrations, as Taylor mentioned, must also be passed and approved by our respective legislative bodies. The Congress of the FSM and the National Congress of the Republic of Palau, or the OEK, have both passed the Compact of Free Association Amendments Act, and as we speak the legislation is being deliberated by the national parliament of the Republic of the Marshall Islands, the Nitijeļā. We applaud the quick legislative action that has already been conducted in the FSM and Palau, and we look forward to a fruitful and positive response from the RMI as they conduct their own democratic process.

In closing, the Department of the Interior is proud to partner with the Department of State in honoring and upholding the U.S. Government's commitments to the FSM, RMI, and Palau, and we look forward to carrying out our responsibility to implement these cornerstone agreements for the next 20 years and beyond.

MODERATOR: Thank you so much, Deputy Assistant Secretary. We will now turn to the question-and-answer portion of today's briefing. Our first question came in in advance from Mar-Vic Cagurangan from the Pacific Island Times, based in Guam, who asks: "Regarding CIFA, some of the benefits that are now available to COFA migrants, such as the Supplemental Security Income, do not apply to U.S. citizens living in Guam or other territories. Will FAS migrants living in Guam be eligible for SSI? If yes, then how does the U.S. Government intend to address the apparent distortion?"

MR NAKOA: Thank you for the question. It's important, and I appreciate raising awareness on this. I think there's been some confusion about what benefits CIFA transfers or transmits in the past. So to be clear, CIFA will not provide eligibility to FAS communities living in Guam or anywhere else where the local residents do not also include those benefits. Essentially, CIFA just places the COFA communities in the same shoes as the residents living in whatever state or territory that they choose to reside. So in California they have the benefits that any California resident would have, in Hawaii the same, and in Guam the same. Hopefully that is able to shed some light on what CIFA does or does not do. But happy to answer any follow-ups.

MODERATOR: Okay. The next question comes to us from Dave Rising at the Associated Press, based in Bangkok, Thailand, who asks: "In February, the presidents of Palau, Micronesia, and the Marshall Islands wrote a joint letter expressing their concerns that the COFA agreements had not yet been implemented, suggesting that the delay had opened the door to, quote, 'undesirable opportunities for economic exploitation' by China. Does this put the U.S. at a disadvantage as it now works to implement COFA? What obstacles now need to be overcome? And more broadly, how great is the U.S. fear of these three nations falling under - more under Chinese influence and what can the U.S. do to counter this?"

MR RUGGLES: Thank you. I'll take that. I'll note that we have really a unique and special relationship with the Freely Associated States, arguably one of the closest relationships possible between sovereign nations. Their citizens serve in the U.S. military. They can travel and work freely in the United States. Our military provides for the national defense of these countries. We're as close as countries can be, and this has been a longstanding relationship that the Compact has underpinned. And so this relationship really supports the security, stability, freedom, and prosperity throughout the Indo-Pacific.

We understand the past several months have been frustrating for and uncertain for our friends in the Pacific. We heard their concerns about getting COFA done, and frankly, we shared those frustrations and that priority. It was a top priority for this administration, top levels of the State Department, the Interior Department, the Pentagon, working with the Congress, the White House to secure that bipartisan support in Congress.

And I'll just note that for observers of the United States, clearly there are a number of national security priorities that are still being hammered out with Congress. But I think it's notable of all these that COFA is the one that made it through. I think that speaks volumes to the bipartisan support and importance that COFA holds for the United States.

And so these agreements have a total of $7.1 billion in funding for a full 20 years. There's not going to be annual appropriations. This locks in place assistance numbers for 20 years. And we believe that the economic package in these agreements is going to play a vital role in building and maintaining a brighter future for the people of the region. And we're - continue to be committed to work with the Freely Associated States to preserve an open, secure, and prosperous region.

I'll just say that our vision for a free and open Indo-Pacific does not exclude any country, but we'll continue to build on this already strong relationship and of course follow any developments closely, working closely with our regional partners. Thank you.

MODERATOR: Okay. Next we'll go to the live queue. We have Cleo Paskal from The Sunday Guardian, based in New Delhi. Cleo, you should be able to unmute yourself now.

QUESTION: Oh, there you go. Can you hear me?

MODERATOR: Yes, we can.

QUESTION: Okay, great. Thank you. First of all, congratulations to you both and to the entire team for getting this through. I know it was a tough haul, and you did a great job. Two questions. One, is there still an option for universal basic income in the RMI agreement? And how was the congressional logjam over funding broken? Did it involve an offset? Thank you.

MR RUGGLES: Thank you, Cleo. You have played a - you've been a great partner and voice in highlighting the importance of the COFA, and appreciate your support and engagement on these important relationships. I just wanted to acknowledge that.

The agreement with the RMI as with the other two countries was designed to reflect the priorities of the - of our Pacific partners, the Freely Associated States. And so in negotiating - and I'll invite DAS Nakoa to maybe elaborate, but I'll just say that in negotiating the agreement with RMI, they wanted to at least preserve the option of having some sort of direct individual support distributions for the population. We'll need to sit down with them on the implementation phase and through the Trust Fund Committee that DAS Nakoa chairs and the JEMFAC that Assistant Secretary Cantor chairs to go over those priorities. But it's a bit premature to (inaudible) since we haven't had those discussions.

In terms of offsets, I don't have direct knowledge of that part of the agreement. The Office of Management and Budget handled the negotiations with the Hill on getting the final agreement, so I might refer you to them or to contacts on the Hill on what finally secured the deal. But again, we're just happy it made it through and thrilled at the overwhelming support. Thank you.

MR NAKOA: Thank you. This is Keone Nakoa. First, I want to echo Taylor's comments to thank you and a lot of your work. I don't know that there was perhaps any single specific thing, but there was kind of, like, a groundswell of support. I'm not sure how much to credit any individual, but I know people were definitely paying attention to some of your articles and there were several letters from FAS, from ambassadors, from other countries, and there was also a very strong championing of several members of Congress, particularly of Senate Natural Resource - or House and Senate Natural Resources, Foreign Affairs and Foreign Relations, and HASC and SASC. So I think it was a culmination of a lot of support.

From what I understand, there was no specific offset provided other than things that were contained within the continuing appropriations act in general. And I believe, yes, there - I'll have to consult the letter of the RMI Trust Fund Agreement, but there is the possibility to have distributions that would resemble universal distributions. But that's something that Nitijeļā would have to pass or have additional action if they wanted to access, and then there are specific pieces of the Trust Fund Agreement that would need to be satisfied.

MODERATOR: Okay, I think we have time for one last question. We have Jessica Stone from VOA, based in Washington. Jessica, you should be able to unmute yourself now.

QUESTION: Okay, thank you so much and thanks for doing this call, guys, and congratulations to both of you as well. I wanted to drill down a little bit on the nuclear legacy in the RMI and how that is being handled. As I reported a few months ago, that was a major sticking point. I wonder if that's still your view on it that that was really the thing that had to be settled to get the agreement signed. We all know the congressional saga, but I'm curious how you view handling the nuclear legacy in the RMI going forward.

MR RUGGLES: Hey, thanks, Jessica. I think just objectively this is a sensitive issue, and we remember just on March 1st we commemorated Nuclear Remembrance Day. And I'll just say that the United States has long recognized the effects of the nuclear testing program and has accepted and acted on its responsibility. But the - in negotiating the agreements with RMI, as I mentioned in response to Cleo's question, it's really a desire to be responsive to RMI's priorities and needs while at the same time observing and respecting the fact that we have this agreement from 1986, the so-called Section 177 Agreement where we reached a full and final settlement concerning those issues.

And so I don't want to be - I don't want to belabor the point. As I said, the Nitijeļā is considering legislation. I think we've found an agreement that is robust and provides great discretion for the Government of the RMI to respond to the needs, the health, environmental needs of its population. I don't want to convey the impression that this is a closed chapter or that this is not something that will continue to pop up, that we'll need to work through together, but I do think that the negotiators on our side, led by Ambassador Yun, have crafted an agreement that respects the interests and priorities of both countries. Thank you.

MODERATOR: Oh, I'm sorry. Senior Advisor Ruggles, thank you so much. If you have any closing remarks, I'll turn it back to you now.

MR RUGGLES: Oh, thank you. I'll just say, one, I appreciate the interest. As I said, we had President Simina of FSM in town today. It was a great opportunity meeting with the Deputy Secretary, and I know he also met with Secretary Haaland in Interior and the Peace Corps director and many other meetings that they'll have this week. We certainly are going to be looking for other opportunities to highlight and celebrate implementation of COFA. I do not want to prejudice the outcome of the deliberations in the Marshall Islands, so we'll watch that process carefully and look forward to working with all three governments moving forward.

But really, a historic moment and I'm pleased that we've passed this milestone. So thank you.

MODERATOR: Thank you, Senior Advisor Ruggles. Deputy Assistant Secretary Nakoa, if you have any last words, please go ahead.

MR NAKOA: Thank you so much. And I just really want to echo what Taylor just said. Very much appreciative of all the work of everyone on this call and the interest in this topic. I think that was definitely a piece of how Congress - or why Congress acted. And very much looking forward to implementation stage of this next third generation, or compact three, or however it's being called - working with the United States and the Freely Associated States.

So there's a lot more to come, a lot - a very busy year ahead of us.

MODERATOR: Thank you. That brings us to the end of our time for today. Thanks for your questions, and huge thanks to Senior Advisor Ruggles and Deputy Assistant Secretary Nakoa for joining us. We will provide a transcript of this briefing to participating journalists as soon as it's available, and we'd also love to hear your feedback. You can contact us at any time at [email protected]. Thanks again for your participation and we hope you can join us for another briefing soon. Take care.

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