Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698745411371.pdf (Micronesia, Federated States of)
STANDING COMMITTEE REPORT NO.

19-156 RE: C.R.

No.

19-29/R&D SUBJECT: TO RATIFY THE MTEC TREATY BETWEEN FSM, RMI AND ROP.

SEPTEMBER 20, 2016 The Honorable Wesley Simina Speaker, Nineteenth Congress Federated States of Micronesia Fifth Regular Session, 2016 Dear Mr. Speaker: Your Committee on Resources and Development, to which was referred C.R.

No.
No.

19-29, entitled: “A RESOLUTION TO RATIFY THE TREATY BETWEEN THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF THE MARHSALL ISLANDS, AND THE REPUBLIC OF PALAU CONCERNING THE ESTABLISHMENT OF THE MICRONESIAN TRADE ECONOMIC COMMUNITY AND THE PROTOCOL ON THE CONFERENCE STRUCTURE, SECRETARIAT, AND FINANCIAL MATTERS OF THE MTEC, SIGNED ON BEHALF OF THE THREE STATE PARTIES ON SEPTEMBER 30, 2014.”, begs leave to report as follows: The intent and purpose of the resolution are expressed in its title.
Congressional Resolution No.

19-29 is a treaty establishing the Micronesian Trade and Economic Community (MTEC) and the Protocol on the Conference Structure, Secretariat, and Financial Matters of the MTEC.

The MTEC is the legal framework focusing on the development of trade and investments within the Governments of the Federates States of Micronesia, the Republic of the Marshall SCRL 19-180/CR 19-29/R&D Committee STANDING COMMITTEE REPORT NO.

19-156 RE: C.R.

No.


19-29/R&D SUBJECT: TO RATIFY THE MTEC TREATY BETWEEN FSM, RMI AND ROP.

SEPTEMBER 20, 2016 Islands, and the Republic of Palau.

In the future, the countries in this sub-region can join, namely Guam and the Commonwealth of the Northern Marianas Islands.

The FSM Department of Resources and Development is currently the Interim Secretariat of the MTEC.
Historical background of the Treaty The Micronesian Trade Committee (MTC) Interim Secretariat in close consultations with officials of the FSM, RMI, and Palau prepared the first draft of the Treaty.

Several consultations on the first draft of the Treaty were conducted in the FSM in January 2014 followed by the RMI and Palau in March 2014.
The trade, legal, and foreign affairs officials, as well as legislative counsels and private sector representatives from the three countries discussed and reviewed the first draft of the Treaty, and recommended among other things, proposed textual language to develop a revised draft of the Treaty.

The revised draft of the Treaty was circulated to all stakeholders for further comments.
Hundreds of stakeholders representing all segments of the societies and governments in the three countries were consulted, which they provided input to the revised draft of the Treaty.

After long and tedious hard work of all stakeholders, the text of the Treaty was finalized on September 1, 2014.

And, on September 3, 2014, the Treaty was signed in Apia, Samoa, by H.E.

Emanual Mori, President of the Federated States of Micronesia, H.E.
Christopher J. Loeak, President of the Republic of the Marshall Islands, and H.E.

Tommy Remengesau Jr., President of the Republic of Palau.

As in all treaties or agreements, it is a requirement that once the President of the Federated States of Micronesia signs an agreement or treaty, the FSM Congress needs to ratify the Treaty or agreement.

Hearing in the states Your Committee conducted a series of public hearings on the said resolution in the four FSM states to receive their views and comments.
The State of Yap fully supports the Treaty and recommends its ratification.

The comments your Committee received during the hearing in Chuuk included: -2- STANDING COMMITTEE REPORT NO.

19-156 RE: C.R.

No.

19-29/R&D SUBJECT: TO RATIFY THE MTEC TREATY BETWEEN FSM, RMI AND ROP.

SEPTEMBER 20, 2016 • Is there in the Treaty a provision to settle dispute in the Micronesian Way?
Article 19 of the Treaty contains language that in the event that there is no settlement of issues, the Secretary General will have the discretion to make a decision; • If we talked about trade, are immigration issues also part of this exercise and is there a provision in the Treaty that contains illegal trade.

The Treaty governs the rule of law, good governance, human rights and democracy; • What provisions in the Treaty specifically explain the barriers and constrains in trade.
Article 5 of the Treaty invites all countries to collaborate with each other on trade barriers; • A concern was raised during the hearing in Pohnpei state whether this Treaty will affect the foreign investment in Pohnpei, especially with potential investors to Pohnpei.

Pohnpei state leadership was assured that National and State governments should consult each other on sectors in trade on the specific powers the state has.
If an investor needs to engage in a sector, which the state has jurisdiction over, then that specific sector rests with the state jurisdiction; • In regards to the Most Favorite Nation (MFN) clause under the Amended Compact, the MFN clause under the Amended Compact does not affect the three current members under this MTEC Treaty.

Your Committee informed the respective leaderships that the Government of the Republic of the Marshall Islands had already ratified this Treaty.
It is only the two other Member States (FSM and ROP) that have yet to ratify it.

Pursuant to Article 26(2) of the Treaty, this treaty shall enter into force thirty days after the deposit of the instruments of ratification by two-thirds of the Member States.

So if this resolution is adopted, then the Treaty shall enter into force once the obligation in Article 26(2) of the treaty is fulfilled.
This sub-regional initiative (MTEC) will contribute towards integrating the economies of the Member States, create new opportunities for trade, investments, and accelerate reforms that can increase economic growth leading to sustainable economic development.

-3- STANDING COMMITTEE REPORT NO.

19-156 RE: C.R.

No.

19-29/R&D SUBJECT: TO RATIFY THE MTEC TREATY BETWEEN FSM, RMI AND ROP.

SEPTEMBER 20, 2016 Your Committee wishes to offer an amendment to the resolution as follows: 1.
Page 2, line 21, delete “First Regular”, and insert “Fifth Regular” in lieu thereof.

CONCLUSION Your Committee on Resources and Development is in accord with the intent and purpose of C.R.

No.

19-29, and recommends its adoption in the form attached hereto as C.R.

No.

19-29,C.D.1.
No.

19-29,C.D.1.

Respectfully submitted, /s/ David W. Panuelo /s/ Alik L. Alik David W. Panuelo, chairman Alik L. Alik, vice chairman /s/ /s/ Victor V. Gouland /s/ Victor V. Gouland, member Florencio S. Harper, member /s/ /s/ Berney Martin Berney Martin, member /s/ /s/ Joseph J. Urusemal Joseph J. Urusemal, member /s/ /s/ Robson U. Romolow Robson U. Romolow, member -4-