Skift Take

The South Pacific Islands are of huge strategic interest to both the U.S. and China. The United States is scrambling to ink a deal that would deliver new economic assistance to the islands ahead of China making investments, particularly in tourism.

Tom Lowry

The United States and the Marshall Islands agreed to try to reach a deal on U.S. economic assistance by late 2022, according to a statement seen by Reuters on Friday, a sign of momentum in talks as Washington worries about China’s expanding Pacific influence.

Joseph Yun, U.S. special envoy for Compact of Free Association (COFA) negotiations, was in the Marshall Islands last week for the first in-person talks with the strategic Pacific island country since December 2020. The next talks will be in Washington in late July.

The signed joint statement said Yun and Marshall Islands foreign minister Kitlang Kabua hoped to ink a memorandum of understanding by September with the “aim to complete the Compact talks by late fall or early winter.”

It said the two sides affirmed the importance of continuing U.S. economic assistance beyond 2023 when it is due to expire.

They also discussed the legacy of U.S. nuclear tests in the Marshall Islands, the statement said, an issue that had been a sticking point prior to Yun’s appointment in March.

Islanders are still plagued by the health and environmental effects of the 67 tests conducted from 1946 to 1958, which included “Castle Bravo” at Bikini Atoll in 1954 – the largest U.S. bomb ever detonated.

Washington has long had special diplomatic relationships with the Marshall Islands, Palau and the Federated States of Micronesia (FSM) that give it military access to a huge strategic swath of the Pacific.

But the three Pacific island countries have complained that assistance has not kept pace with U.S. obligations. Yun is also responsible for negotiations on renewing COFA deals with FSM and Palau, which expire in 2023 and 2024.

China has increased economic, military and police links with Pacific island nations, and made commercial and tourism-related overtures to the Marshall Islands, Palau and FSM, which are hungry for foreign investment.

China’s increasing regional influence was highlighted by its security pact with the Solomon Islands this year, a move that fanned concerns in Australia, New Zealand and the United States.

(Reporting by Michael Martina and David Brunnstrom; Editing by David Gregorio)

This article was written by Michael Martina from Reuters and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].