February of 2023 saw the Marshall Islands (RMI), the Federated States of Micronesia (FSM) and Palau sign a memorandum of understanding with the U.S. to continue their beneficial “compact of free association (COFA)” deals.
These deals allow the U.S. exclusive jurisdiction over military affairs in a region that when combined with other U.S. territory, equals an area greater than the continental U.S.
With so much trade going through this region and the two most powerful nations being in the Pacific Ocean (Mainland China and the U.S.A.), this area proved crucial geopolitically and economically.
Since the end of World War Two, the Central Pacific has belonged to the U.S. sphere.
In the memorandum of understanding, the U.S. promised to fund 120 million dollars annually for the three COFA nations. This would total 7.2 billion U.S. dollars over the next 20 years, a far cry from what the U.S. would be estimated to spend yearly without these deals.
Due to the importance the COFAs play in military testing, bases, refueling, defense systems and plenty of other key details, the U.S. would be expected to spend at least 1 billion U.S. dollars annually for the next 20 years just to offset the costs of not renewing these COFA deals.
In addition, the COFAs protected U.S. land and allies.
Previously, the whole of Oceania was under the U.S., Australian, New Zealand, U.K. and French security alliances, but the People's Republic of China has recently exerted more influence, luring key allies like the Solomon Islands. This expansion plan included luring the COFAs as well.
The reason for this is that the COFAs are the Eastern borders for allies Philippines, Taiwan and Japan, while also bordering U.S. territories and Hawaii.
In addition, they are key to U.S. policies of defense chains, which map the islands into defensive lines or chains from north to south to create buffer zones between the U.S. and Mainland China. Without them, Mainland China is on the U.S. border, making the U.S. weaker in a potential skirmish.
Therefore, both Republicans and Democrats were in favor of re-signing these deals, as FSM and RMI have been part of the alliance since 1986 and Palau since 1994.
Nevertheless, party politics delayed a bipartisan agreement over a year until March 2024, causing the COFAs states to run on fumes, and creating greater temptation to join Mainland China's growing Pacific alliance.