Marshall Islands, US seal Compact renewal

Oct 26, 2023 | Blog, News, Pacific

In a historic ceremony held at the East-West Center in Honolulu, the Marshall Islands signed the Compact of Free Association on 16 October, marking the final renewal of its Compact relationship with the United States. The signing was celebrated as a major milestone by both parties, underscoring the mutual benefits of this agreement.

The key aspects of the signing included the following agreements:

  1. Amended Compact of Free Association: This 20-year agreement, running until 2043, solidifies the ongoing partnership between the Marshall Islands and the United States.
  2. Fiscal Procedures Agreement: This agreement outlines oversight and accountability measures for US grant funding to ensure it is utilised effectively.
  3. Trust Fund Agreement: Covering both the existing over $700 million Compact Trust Fund and an additional $700 million in funding, this agreement focuses on addressing the needs of the Marshallese people, especially in response to the nuclear test legacy and other related challenges.

The significance of the agreement was underscored by the acknowledgment that the United States had inadequately addressed the nuclear test legacy in previous negotiations. However, the new Compact allows the Marshall Islands to utilise the additional $700 million to respond to these pressing concerns and other vital needs.

One notable aspect of the new agreement is the long-term commitment between the two nations. The United States has agreed to continue its support beyond the initial 20-year Compact funding period, with a focus on maintaining their mutual obligations.

Perhaps the most significant change in the new Compact is the Marshall Islands’ ability to set its own budget priorities. This newfound autonomy in determining financial allocations will allow the nation to better address its specific needs and challenges.

The signing ceremony was attended by numerous dignitaries, including President David Kabua and First Lady Ginger Kabua, and was also viewed online by many people.

Australia and the Marshall Islands:

Australia and the Marshall Islands share an important relationship, primarily through their membership in regional and international organisations such as the Pacific Islands Forum. While this latest Compact of Free Association renewal between the Marshall Islands and the United States may not have a direct impact on Australia’s relationship with the Marshall Islands, it does underscore the significance of maintaining stability and security in the Pacific region.

Australia has a vested interest in the stability and well-being of its Pacific neighbours, as demonstrated by its various aid and development programs. The renewal of the Compact, with its emphasis on addressing issues like the nuclear test legacy and the Marshallese people’s needs, aligns with Australia’s broader goals in the region. The Pacific region faces common challenges related to climate change, security, and economic development, and collaborative efforts with nations like the Marshall Islands are essential in addressing these issues.

Therefore, while not directly altering Australia’s relationship with the Marshall Islands, this Compact renewal emphasises the shared commitment to the Pacific’s welfare and serves as a reminder of the importance of regional cooperation and support in the face of challenges that transcend national boundaries.

During Foreign Minister Penny Wong’s visit to RMI in October 2022, she announced a five-year, $2.5 million climate initiative to implement components of RMI’s National Adaptation Plan, strengthening water and food security and supporting climate governance and advocacy. Additionally, Australia is providing $3 million to a multi-partner project that supports RMI in adapting to increasing climate risks, specifically focusing on water security interventions to enhance resilience against disasters and climate-induced drought impact.

Australia’s Pacific Flights Program has facilitated the re-establishment of regular commercial flights connecting RMI to Australia, the Federated States of Micronesia, Kiribati, and Nauru, ensuring continued access to international ports and markets. Australia also plays a crucial role in assisting RMI to improve sexual health outcomes among youth and women through regular safety checks of health facilities and the provision of additional reproductive health materials in outer atolls.