The House has approved a compact between the United States, the Federated States of Micronesia and the Marshall Islands ending 38 years of U.S. trusteeship over the islands. It awards the Pacific islands sovereignty over domestic affairs, but requires consultation with the United States on foreign policy.
Under the pact, the United States "retains the right in perpetuity to deny any foreign power a military presence" on the islands, which contain two important U.S. military nuclear testing grounds.
The House approved the pact 360 to 12 Thursday night, and Rep. Stephen J. Solarz (D-N.Y.) called the resolution a "historic moment" that let members "participate in an act of formal decolonization." A similar measure is before the Senate.
Initially, two committees -- Ways and Means and Interior and Insular Affairs -- disagreed over the trade and tax provisions in the compact. Ways and Means Chairman Dan Rostenkowski (D-Ill.) said the provisions might create a haven for Americans evading U.S. income tax; Interior Chairman Morris K. Udall (D-Ariz.) said removing the tax concessions might frustrate 14 years of negotiations.
The governments of the Micronesian states and the Marshall Islands had indicated the compact would be unacceptable without tax and trade concessions.
The compromise agreement assures U.S. citizens living and working on the islands an $80,000 exemption on their incomes, an allowance granted U.S. citizens living in foreign nations. U.S. investors would be afforded tax incentives similar to those in commonwealths such as Puerto Rico.
The trust territories, formed in 1947, comprise more than 2,000 islands in the central and western Pacific with a population of about 130,000. In 1969, negotiations to terminate the trusteeship began with the seven districts of Micronesia. Attempts to forge a unified Micronesia failed, and the Federated States are now made up of Yap, Kosrae, Truk and Ponape.
Under the House-passed measure, the United States will protect the Micronesian and Marshall islands from military attack and provide economic assistance of $2.39 billion over the next 15 years.
In exchange, the compact guarantees access to the Kwajalein Atoll in the Marshall Islands, a key U.S. facility for testing the accuracy of intercontinental ballistic missiles, for the next 30 years. The United States will lease the missile range for $9 million a year. Udall said the Kwajalein lease expires at the end of the fiscal year and failure to renew it "would severely undermine our nation's defense."
The United States, under the accord, is committed to clean up Bikini Atoll of the Marshall Islands, site of U.S. nuclear tests. The compact establishes a $150 million trust fund to settle claims against the United States for damages from the nuclear weapons testing program.