President Surangel Whipps Jr. appeared before the United States Senate Committee on Energy and Natural Resources on July 13, 2023, to urge passage of the legislation implementing the Compact of Free Association Review Agreement.

The legislation proposal includes the Compact Review Agreement, signed in May of this year by Palau Chief Compact Negotiator Minister Kaleb Udui Jr. and US Special Envoy Joseph Yun, and includes nearly $900 million to fund Palau’s needs over the next 20 years. 

In his testimony, President Whipps said that Palau and the US had an inequitable relationship under the Compact where the US has strategic rights over the Palau land and water “without end” but only provides funding to Palau for 50 years.

The proposal before the US Congress will correct this inequity, said Whipps, by providing the basis for financial and programs assistance to continue on the same terms after.

In the testimony, Whipps claims that China has made inroads into Palau through its control of Palau’s tourism market and direct investments with individuals.  He further claims that China has offered to send “more tourists than ever and make huge investments in a new industry if Palau shifts” and denies Taiwan.

Palau supports Taiwan’s right to exist, which contradicts China’s One China Policy and its view of Taiwan as China’s province.  Whipps said that Palau’s stance toward Taiwan has cost Palau its economy and continues to do so.

Whipps urged the United States to do more than just pass the proposal.  He recommends lifting the interest and attention afforded the FAS to the same level as that given to Australia, New Zealand and others.  He said the Office of Freely Associated States Affairs be re-established at the State Department, similar to the Office of Australia, New Zealand and Pacific Island Affairs.

He further asked the US Congress to complete all the negotiations relating to the proposal while Ambassador Yun is in office.

U.S. Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources (ENR), in his opening statements, said that “ the proposal that the Administration sent is extensive.

“It includes a request for $7.1 billion over twenty years and numerous reforms to existing programs.

“This proposal requires our scrutiny.

“I look forward to working with you and other members of this committee to ensure that the Administration’s proposal is fiscally responsible and does reflect our national security interests.”

Both Palau and the Federated States of Micronesia have earlier signed their Compact Review Agreement MOUs.  The Republic of the Marshall Islands is still negotiating its Compact Review. 

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