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Foreign Affairs

Diplomatic Relations

As of October 22, 2002, the FSM had established diplomatic relations with 50 countries. You can access the full list.

Compact of Free Association

Negotiations between the FSM and the United States began in 1968 on a post-trusteeship relationship. The FSM was represented by its Commission on Future Political Status and Transition, under the Chairmanship of the Honorable Andon Amaraich. A treaty between the two sovereign nations, known as the Compact of Free Association (the Compact), was signed on October 1, 1982. Thereafter, following a complex period of negotiating related agreements and the completion of constitutional processes of ratification, the Compact entered into force on November 3, 1986. See US Public Law 99-239, January 14, 1986, for the text of the Compact and related provisions of US law enacted at that time.

The Compact is an innovative adaptation of the status known in international law as, "free association." In previous instances, a sovereign metropolitan power had devolved limited sovereignty upon a non-sovereign entity (typically a colony) existing within its body, reserving to itself whatever governmental functions or attributes, such as citizenship, might be appropriate in the circumstances. The instrument of devolution, necessarily, had been a unilateral act of the metropolitan power, and its terms operated to transfer to the receiving party only such governmental powers as the sovereign power chose to convey. Such instrument thus became organic to the birth of limited self-government in the freely- associated entity.

In the case of the FSM, however, the inherent sovereignty of the people and their constitutional government had never been owned by a metropolitan power. The US, in accepting the Trusteeship, expressly forswore any assumption of sovereignty over the islands. The FSM Constitution is the only document organic to the Nation's sovereign existence.

The FSM Constitution provides, in Article IX, Section 4, for a process by which the delegation of major governmental powers can be accomplished. This process was carefully followed and completed after the nationwide referendum on the Compact in June 1983. Thus, the responsibility for defense and security accepted by the United States under the terms of the Compact is delegated to the United States under the FSM Constitution, and is not reserved by the United States. This crucial distinction underpins the FSM' s existence today as a sovereign State within the international community. It is on this basis that the FSM perfected full diplomatic relations with the United States in 1989, and secured Membership in the United Nations in September 1991.

The consistent encouragement by the US Government to the people of the FSM throughout the lengthy and complex process outlined above is consistent with the ongoing worldwide commitment of the US to fostering democratic ideals, and provides the foundation for what promises to be a lasting bond between the two countries.

The Compact of Free Association was seen by both FSM and the US as a vehicle to secure a responsible level of assistance, financial and otherwise, that would enable the continuation of FSM's progress economically, ensure the solidification of stable democratic government and provide for the maintenance of US' essential security interests in the Region.

On November 3, 1996, the FSM enters the last five-year cycle of the Compact's package of financial assistance. Levels of grant funding, which started out in 1986 at $60 million and dropped in 1991 to $51 million, will decrease now to $40 million annually through 2001. The overall US assistance, however, includes a number of federal programs and technical assistance which, currently, adds a value of approximately $50 million annually to the package. Locally-generated revenues in FSM have shown an increase each year since FY 1993, when they stood at $56.5 million. Other foreign country-donors, such as Japan, China and Australia, have initiated assistance programs which are specifically targeted and not insignificant, but their scale is, and is likely to remain minor by comparison to the United States.

The Compact mandates that at least 40% of grant funds must be expended in the capital account. The ADB finds that this requirement has been met thus far by FSM, resulting in the completion of many essential infrastructure projects. The problem lies in the slow pace of economically productive growth in the private sector, and the large government payrolls. This has resulted in a relatively comfortable living environment where most economic activity is in infrastructure development, services and sales of consumer goods, all largely dependent on continued outside financial assistance. In this light, it can be seen that private sector development in and of itself is not the complete answer.

At this writing, ten years into the Compact relationship, it can be said that the Compact is serving its purpose very well. Much has been accomplished since 1986. A visitor to FSM today who last saw it in 1986 cannot help but be impressed with the improved transportation services and facilities, one of the best local and international communications systems in the Pacific, reliable power and water in most locations, paved roads, better housing, better schools and hospitals, new hotels and restaurants, well-stocked stores, the showcase new National Capitol facilities and the new College campus, to name only a few.

The complex system of transmitting and monitoring Compact funds has been carefully managed by the US Department of the Interior. The Department of State has effectively coordinated the Compact-related activities of a number of Executive agencies through the Inter-Agency Group, and has encouraged and supported FSM's efforts to establish its role within the international community. The Interior-related Committees and subcommittees in the US Congress have made possible many advances through support of programs and projects related to, but not specifically within the terms of the Compact.

There is every reason to believe that the long-term close relationship with the US envisioned in the Compact will be maintained. In the first ten years, the commonality of interests between the two countries that gave birth to this relationship has been confirmed in practice, and should grow stronger still as FSM moves to overcome current obstacles through implementing measures such as those discussed above. There are no quick and easy answers to the problems of development in this remote region of the World, but the US has earned a deserved place in the Region as a primary sponsor of democracy and stability. Through this sponsorship the people of the FSM maintain faith in the eventual attainment of their ability to provide for themselves and future generations.

For more information on the Compact and the renegotiation process, you may wish to consult the FSM Joint Committee on Compact Economic Negotiations (JCN).

Membership in International Organizations

The FSM, along with the Marshall Islands, North Korea and South Korea, joined the United Nations on September 17, 1991. The FSM is also a member of a wide range of regional and other international organizations. For more information on FSM foreign affairs activities, please see the Department of Foreign Affairs page.

Military & Defense

The United States is responsible for the defense of the FSM under the Compact of Free Association.