U.S. Issues in the Pacific Islands: Setting Priorities

U.S. Issues in the Pacific Islands: Setting Priorities

97-1049 F
CRS Report for Congress
Received through the CRS Web
U.S. Issues in the Pacific Islands:
Setting Priorities
December 8, 1997
(name redacted)
Senior Specialist In International Politics
Foreign Affairs and National Defense Division
Congressional Research Service ˜ The Library of Congress

U.S. Issues in the Pacific Islands: Setting Priorities
Summary
The participants in a CRS Seminar on U.S. relations with Pacific Island states
and territories came to consensus on several areas..
They are that the U.S. Government bears greatest responsibility for the three
U.S. territories (Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands (CNMI)), and for the three self-governing states in free association
with the United States (the Republic of the Marshall Islands, the Federated States of
Micronesia, and Palau). Current issues center on Guam’s seeking change in its
political status, immigration flows affecting Guam and CNMI, and future funding for
U.S. programs in the Republic of the Marshall Islands (RMI) and the Federated
States of Micronesia (FSM). Seminar participants explained that congressional and
other U.S. policymakers have deliberated over Guam's status and immigration issues,
and will take up soon the future funding for RMI and FSM, but no final decisions
appear imminent.
U.S. Government interest in other Pacific Island states and territories is not
always matched by resources. Issues center on how best to channel limited U.S.
Government resources to promote a positive U.S. image while supporting regional
peace, development and political pluralism. Seminar participants highlighted the
difficulties in achieving good results for U.S. policy in an atmosphere of constrained
U.S. Government funding.

Contents
Pacific Island Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Changing U.S. Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Issues with U.S. Territories and Freely Associated States . . . . . . . . . . . . . . . . . . 4
Regional Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Political Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Environmental Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Map of the Pacific Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
List of Tables
Table 1. Members of the South Pacific Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
This report draws in part on information presented at a CRS-hosted seminar held on
October 17, 1997. This seminar was made possible in part by a grant from the Henry
M. Jackson Foundation.

U.S. Issues in the Pacific Islands:
Setting Priorities1
Pacific Island Trends
The 14 sovereign states and other territories that make up the Pacific Islands
comprise a vast area, an “ocean continent.” Amid this large expanse of ocean are
many, generally small islands. The territory is often densely populated, but given the
limited land, the overall population of the Pacific Island states and territories is
small, about 6 million. (See map and Table 1).
Societies and cultures vary greatly. Convention divides the indigenous peoples
of the islands into three groupings: Polynesians, Melanesians, and Micronesians.
These divisions have their limitations, but remain in general use. Polynesia includes
the Cook Islands, French Polynesia, Nine, Western Samoa, American Samoa,
Tokelan, Tonga, and Tuvalu, as well as Hawaii and New Zealand. Melanesia
includes the largest states in the region, Papua New Guinea and the Solomon Islands,
as well as New Caledonia and Vanuatu. Fiji is geographically halfway between
Melanesia and Polynesia. Micronesia is made up of the northernmost of the islands:
Nauru, Kiribati, Guam, the Northern Marianas, the Marshall Islands, the Federated
States of Micronesia, and Palau.
Amid great geographic and cultural diversity, several generalizations prevail.
Democratic Institutions. With few exceptions, the independent states follow
democratic political practices, generally in line with the British parliamentary
system. Laws and institutions support individual rights, free speech, freedom of the
press and transparent mechanisms for the transfer of government powers that are
ultimately accountable to the people. Tonga, a monarchy, is an exception to this
pattern. Ethnic Fijians backed by military force took power there in the late 1980s
in an effort to curb the rising influence of citizens of Indian background. A
protracted period of constitutional uncertainty ensued, but leaders of the two
communities (native Fijian and Indian) appeared to have resolved major differences
by the mid-1990s as generally accepted constitutional rule resumed. Papua New
Guinea has faced repeated crises as it has attempted to deal with a protracted armed
1 Source note. This report draws in part on information presented at a CRS-hosted
seminar held on October 17, 1997 which was made possible in part by a grant from the
Henry M. Jackson Foundation. Speakers at the Seminar were Evelyn Colbert, author, The
Pacific Islands; Allen Stayman, U.S. Department of Interior; Suzanne Butcher, U.S.
Department of State; Manase Mansur, House Resource Committee. For background, see
Bruno, Andorra and Laney, Garrine, U.S. Insular Areas and Their Political Development,.
CRS Report 96-579G, June 17, 1996; and Sutter, Robert, Australia, New Zealand and the
Pacific Islands: Issues for U.S. Policy in the 1990s, CRS Report 95-794S, July 5, 1995.

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seccessionist movement in the island of Bougainville, but the government has
adhered to democratic political practices.
Disorderly Politics. Pacific Islands politics tend to be disorderly by Western
standards. Parties are often small, and subject to shifting alliances. Senior leaders,
rather than party loyalty, tend to guide the rank and file. Given the small overall
population and the high level of political activity, popular involvement in politics is
high. Reports of government waste or misallocation of resources reflect what is
believed to be a fairly widespread problem of political corruption. Violence is rarely
used as a political tool, and there is no tradition of revolutionary violence in the
region.
The Christian churches are strong in most island states and play an important
and generally stabilizing political role. Several states give special leadership
privileges to leaders of the indigenous peoples, the so-called chiefs.
Regional Cooperation. Along with Australia and New Zealand, the Pacific
Island states cooperate to seek common interests in regional groups, notably the
South Pacific Forum. Through the Forum and other means, the small countries are
able to make their views known internationally and preserve their interests in dealing
with outside powers over such issues as fishing, nuclear safety, waste disposal and
others.
Recent Problems. Heading the list are difficulties caused by small size and vast
distances. These make establishing effective economies very difficult. Papua New
Guinea, Fiji and the Solomon Islands are basically self sustaining, or at least have the
resource base to be self sustaining. Others have to fall back on outside aid. In a
world environment where foreign aid is decreasing, many Pacific Island states face
problems in maintaining current economic standards. As a region, the Pacific Islands
receive the highest per capita level of aid in the world according to seminar
participants.
Modernization and globalization also pose serious problems. The transition
from traditional to urban life has been accompanied by widespread aid dependency,
substance abuse and social dislocation in some island communities. Ending trade
preferences under terms of the World Trade Organization also is seen as threatening
island producers. The islands are vulnerable to underworld groups using them as
transit stops or locales for money laundering, drug smuggling, and other illegal
activities.
Changing U.S. Interests
U.S. interests in this vast region have changed in recent years. After World War
II, the United States for several decades followed a passive policy, relying partly on
Western colonial powers, Australia and New Zealand, to maintain the largely
unchallenged U.S. interest in unimpeded military access to the region.
Developments were seen to be generally favorable to American interests. For the
most part, democratically elected governments controlled the region, encouraged free
market economic development, and were friendly toward the United States. These

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governments served U.S. interests by allowing U.S. warships and aircraft to be based
in, stop at, and pass through their territory, and by rebuffing repeated Soviet efforts
to gain influence in the region. As a result, the United States enjoyed secure lines
of communication through the Pacific to Asia, the Indian Ocean, and the Persian
Gulf.
In the mid-1980s, New Zealand’s new anti-nuclear policies had a serious impact
on military and security cooperation under the U.S.-Australian-New Zealand
(ANZUS) alliance — the linchpin of the U.S.-backed collective security in the
region. The U.S.-New Zealand leg of the alliance became moribund. The Soviet
Union also played a more active diplomatic and commercial role with the sometimes
unstable, recently independent Pacific Island countries. U.S. policy became more
active in considering ways to secure military access and other interests.
The demise of the Cold War and other recent developments have given U.S.
policy a decidedly less military cast. Today, American interests and policy concerns
remain active but are dispersed over a range of security, economic, political, and
environmental concerns. Many of the issues relate to only one or a few of the over
20 states, territories, or other political entities that comprise the Pacific islands.
At present, there are three U.S. territories in the region (Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands (CNMI)). The
United States maintains military bases in the U.S. territory of Guam. The United
States also leases an important missile test site at Kwajalein, in the Marshall Islands,
and leases territory for possible future military use in the Northern Mariana Islands.
The United States continues extensive government programs in the U.S. insular
areas of Guam, the Northern Mariana Islands, and American Samoa, and the freely
associated states of Marshall Islands, Federated States of Micronesia, and Palau.
Elsewhere in the Pacific, the United States has relied mainly on the diplomatic and
aid efforts of Australia, New Zealand, France, Japan, and Great Britain to support
mutually pursued interests, help the resource-poor island countries maintain basic
government services, and promote economic development.
U.S. assistance to Pacific Islands countries not in free association with the U.S.
is small. U.S. trade with the region is only a tiny fraction of overall U.S. foreign
trade. American tuna fishing fleets use regional fishing grounds, including those
areas claimed as exclusive economic zones (EEZs) by some island states. The U.S.
Government finds strong support from South Pacific countries in its opposition to
driftnet fishing, when it encourages international efforts to study and take measures
to deal with potential global warming and restricts acts that would endanger the
environment through testing nuclear weapons, destroying chemical weapons, or
depositing toxic or other waste in the ocean.

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Issues with U.S. Territories and Freely Associated States
Political Status of Guam. There is considerable dissatisfaction in Guam over
the territory’s current status under U.S. rule. Recently, attention has focused on
proposals to change Guam from an organized territory to a commonwealth. The new
arrangement would give the local people more control over their own affairs. Some
in Guam have been influenced by perceived advantages gained by the governments
of the commonwealth of the Northern Marianas and by the three freely associates
states.
Migration Issues. Guam and the CNMI complain that they are recipients of
migrants from the poorer freely associated states. Citizens of the latter are allowed
to migrate to U.S. territory. Guam and CNMI seek compensation from the U.S.
Government for the costs of resettling these migrants. And in both areas there is
concern that the inflow of migrants will change the nature of the existing societies.
Meanwhile, migrants from Asia are said to be using the freely associated states
as “way stations” as they seek permanent entry into the U.S. Thus, once they
establish citizenship in the freely associated states, they are able to settle in U.S.
territory.
A special migration issue is posed by the 30,000 "guest workers" from Asia
brought in by hotel, garment factory and other entrepeneurs in the CNMI. (The
CNMI is exempt from U.S. immigration laws). Some see these workers as exploited
by the indigenous people, working for lower pay than the local workers, and creating
a potentially troublesome dual-class structure in the CNMI
Labor Trade Issues. The guest workers in CNMI often work in factories
producing goods (e.g. textiles) for the U.S. market. U.S. labor groups and others,
including some Members of Congress, have criticized the low pay and other
conditions for these laborers. Others charge that some textile shops are established
by companies from China to circumvent U.S. textile quotas on Chinese imports.
Thus, the Chinese supplier provides almost finished goods to CNMI shop workers,
who finish the product, which is then free to enter the U.S. market without quota
restrictions.
U.S. Payments to Freely Associated States. The U.S. relationships with the
three freely associated states, the Republic of Marshall Islands, the Federated States
of Micronesia, and Palua, are governed by the Compacts of Free Association
negotiated in the 1980s. Under the Compacst, the three freely associated states are
fully sovereign internally. Their foreign affairs authority is limited only by the
requirement for consistency with U.S. defense responsibilities. The Compacts'
defense commitment gives the United States the authority to disapprove acts
compromising U.S. security and to exclude third-party military activities. Separate
agreements establish the conditions under which the United States may use land for
defense purposes. Still another agreement sets up an interest-bearing $150 million
endowment fund to settle the claims of Marshall Islanders affected by U.S. nuclear
testing there in the 1940s and 1950s.

CRS-5
The Compacts and related agreements provide for continuing large U.S.
subventions in the form of grant aid, federal programs, and gratis federal services.
In the Marshalls and the FSM the aid provisions and some of those relating to
defense and security will expire in 2001; negotiations on such future arrangements
are to begin in 1999 and will likely result in a reduced financial commitment. This
could pose serious problems for these two aid-dependent states. In Palau the aid
provisions could expire in 2000.
Regional Issues
Political Issues
Leaders in the Pacific for many years often saw the United States following a
policy of benign neglect toward the region. In the 1980s, with New Zealand’s new
anti-nuclear polices and more active Soviet diplomatic and commercial initiatives in
the area, U.S. policy became more attentive against possible threats to U.S. naval
power and military access in the western Pacific. Critics in the region held that this
did little to address regional economic, development, and environmental concerns.
Advocates for a more “effective” U.S. policy argued for an increased U.S.
involvement at various levels — a presence that would allow the United States
Government to hear regional views and adjust U.S. policy where appropriate.
With the support and encouragement of a bipartisan group in Congress
concerned with Pacific Island and Oceanian affairs, the Bush Administration took
important measures to address these problems. In general, the Administration
worked to use diplomacy and greater interchange over security, economic,
environmental, and other issues to promote relations, without requiring a substantial
increase in U.S. Government expenditures to the region. The Clinton Administration
has shown interest in some of these efforts, but on the whole, U.S. attention to the
South Pacific has declined in recent years. Notably, the U.S. closed its embassy in
the Solomon Islands, and closed its respective regional offices for U.S. AID and for
USIA. In general, U.S. officials argue that much U.S. Government interaction with
the region comes through multilateral channels like the South Pacific Forum.2
Security Issues
Specific issues for U.S. security policy focused recently on nuclear issues. New
Zealand’s anti-nuclear policies led to the suspension of U.S. military and security
cooperation with New Zealand under ANZUS. A broadly popular movement in the
region to create a South Pacific nuclear free zone and to press for a halt of French
nuclear testing in French Polynesia posed major problems for U.S. policy during the
1980s and the 1990s. The issues were resolved by the global ban on nuclear testing,
and by the Clinton Administration’s decision to sign the protocols of the South
Pacific nuclear testing in 1996.
2 The South Pacific Forum is the leading regional grouping of the South Pacific. Data
on its Members are listed in Table 1.

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With civil action projects, disaster relief, joint exercises, training and exchange
programs, the U.S. military — notably the United States Navy — has built contacts
with many Pacific Island states. The United States has status of forces agreements
with several Pacific Island States (e.g., FSM, Marshall Islands, PNG, Western
Samoa, and Solomon Islands). The United States provides small amounts of U.S.
military training (IMET) to Papua New Guinea (PNG), Solomon Islands, Tonga,
Vanuatu, and Western Samoa.
Economic Issues
U.S. economic concerns with the smaller, less developed Pacific Island
countries, focus on U.S. assistance to development and U.S. use of local resources,
especially tuna fish.
Many of the small Pacific Island states depend heavily on income derived from
fishing, claiming rights to the fishing resources in large maritime economic zones —
known as Exclusive Economic Zones (EEZs) — around their territory. Most
countries recognize such zones, which are covered by the Law of the Sea convention.
Prior to 1990, the United States took the position that the zones, extending 200 miles
from the island states’ land area, did not apply to tuna, a highly migratory fish
species. As a result, American tuna fishing fleets were perceived as repeatedly
violating the claimed rights of several Pacific Island governments, and some
governments seized and fined U.S. tuna boats. (This position was reversed with
enactment of P.L. 101-627, wherein the U.S. extended jurisdiction over highly
migratory species.)
The U.S. Government attempted to ease the problem by negotiating a regional
fisheries agreement. The accord, in the form of a treaty, was signed on April 2,
1987. Under its terms, the United States agreed to a $12-million annual financial
package to the concerned countries of the region, made up of $2 million from the
U.S. tuna fishing industry ($1.75 million in license fees for 35 boats in the first year,
plus $.25 million in technical assistance) and $10 million in U.S. aid. A U.S.
Government assistance package was divided between $9 million in aid grants and $1
million in project assistance.
The accord was renegotiated and extended in 1992. It involves a 10-year
extension of the previous 5-year agreement, including annual payments of $14
million and $4 million by the U.S. Government and U.S. fishing industry,
respectively.
On development questions, the U.S. Government ended bilateral aid programs
in the 1990s. It focuses on encouraging trade, investment, and other endeavors, often
through multilateral bodies like the Asian Development Bank, to bring greater
economic development to the region. U.S. policy has focused especially on getting
many of the regional governments to trim bloated bureaucracies, cut government
intervention, and allow greater free market activity.

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Environmental Issues
The members of the South Pacific Forum were adamant in their opposition to
the environmental and other dangers posed by French nuclear testing, and for many
years pressed the United States to join them. Ongoing U.S. destruction of chemical
weapons at Johnston Island in the Pacific remains a regional concern. U.S. support
for a curb on driftnet fishing won strong approval from Pacific Island members.
They tend to be less enthusiastic about what many of them see as a lagging U.S.
effort to curb greenhouse emissions to address problems of global warming. Many
of the Pacific islands are low-lying and would be inundated by a rise in the ocean
level caused by global warming.

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Map of the Pacific Islands
Japan
N O R T H
P A C I F I C
O C E A N
Hawaii
Northern
Mariana
Islands
Marshall
Islands
Guam
Palau
1,000 kilometers
(Belau)
Federated States of Micronesia
EQUATOR
(at the equator)
Papua
Nauru
New Guinea
Kiribati
Indonesia
Solomon
Islands
Tuvalu
Tokelau
French
Wallis & Western
Polynesia
Samoa
American
Cook
Futuna
Samoa
Vanuatu
Islands
New
Fiji
Niue
Caledonia
Tonga
Australia
New
S O U T H
Zealand
P A C I F I C
O C E A N
The lines do not constitute recognized territorial boundaries; they merely group islands under the same political jurisdiction.

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Table 1. Members of the South Pacific Forum
Country
Sizea
Population
Economy
per capitab
Australia
7,600,000
1,322,231
$20,720
Cook Islands
240
19,600
2,596
F.S. of Micronesia
720
109,200
1,860
Fiji
18,270
800,500
2,250
Kiribati
717
82,400
662
Marshall Islands
181
59,800
1,598
Nauru
21
11,200
7,205
New Zealand
268,680
3,407,277
16,640
Niue
260
2,500
2,825
Papua New Guinea
461,690
4,141,800
1,111
Solomon Islands
28,450
395,200
529
Tonga
748
99,000
1,262
Tuvalu
26
10,200
373
Vanuatu
14,760
173,900
1,078
Western Samoa
2,860
170,000
1,000
Source: CIA, The World Factbook, 1995. Bank of Hawaii, 1997.
a. Size expressed in square kilometers.
b. Economic figures represent dollars per capita gross domestic product.

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