Warily eyeing China’s Pacific influence, US talks up US$7.1 billion in aid

The renewal of funds for the Marshall Islands, the Federated States of Micronesia and the Republic of Palau – known collectively as the Freely Associated States – had been held up for months by broader infighting in Congress over budgetary issues, even though they enjoyed widespread bipartisan support.

Palau President Surangel Whipps Jnr, who faces an election later this year, cautioned in a February letter that was made public that the Chinese Communist Party was seeking to take advantage of the American delay.

“Every day it is not approved plays into the hands of the CCP and the leaders here … who want to accept its seemingly attractive economic offers at the cost of shifting alliances, beginning with sacrificing Taiwan,” he wrote.

“The PRC has already offered to ‘fill every hotel room’ in our tourism-based private sector – ‘and more if more are built’ – and US$20 million a year for two acres for a call centre,” he wrote, using the abbreviation for the People’s Republic of China.

“We understand the past several months have been frustrating for, and uncertain for our friends in the Pacific,” said Taylor Ruggles, the State Department’s senior adviser for the implementation of the pact through which funds are allocated, known as the Compact of Free Association.

“We’ve heard their concerns about getting it done, and frankly we shared those frustrations.”

03:15

Chinese foreign minister starts Pacific tour, offering security and free trade pacts

He said it was a sign of the COFA agreement’s importance that it was passed while other national security priorities are still stalled in Congress.

“This relationship really supports the security, stability, freedom and prosperity throughout the Indo-Pacific,” Ruggles said.

Under the COFA