Foreign Relations: Kwajalein Atoll Is the Key U.S. Defense Interest in Two Micronesian Nations
Published: 2002-01-22T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: The Compact of Free Association continues a defense arrangement that has existed between the United States and two Pacific island nations--Micronesia and the Marshall Islands--since the end of World War II. The United States has exercised only one of the four primary defense provisions contained in the Compact. That provision grants the United States the right to use part of the Kwajalein Atoll in the Marshall Islands to test nuclear missiles and space tracking operations. The United States has never been required to fulfill defense responsibilities under the other three defense provisions contained in the Compact. The Defense Department considers Kwajalein Atoll an important asset that would be costly and difficult to replicate. Ongoing negotiations over the Compact are following a course that would preserve the existing defense and security relationship between the United States and each of these nations.

section_title: Letter
paragraphs: In 1986, the U.S. government entered into separate international  agreements—known collectively as the Compact of Free Association— with the Federated States of Micronesia (FSM) and the Republic of the  Marshall Islands (RMI). The Compact provided for the continuation of a  defense arrangement that has connected the United States and these  Pacific islands since the end of World War II. The Compact obligates the  United States to defend these island nations against attack, while providing  the United States with continued access to the Kwajalein Atoll in the RMI,  which is used for missile testing and space tracking activities. Additional  rights were retained by the United States under the Compact—the ability to  deny access to the islands by third-party militaries and block actions by the  island governments that are incompatible with U.S. defense authority and  responsibilities. These rights reflected Cold War concerns, such as Soviet  influence in the Pacific, that existed at the time the Compact negotiations  took place. Certain defense and economic assistance provisions of the Compact are due to expire in 2001. Ongoing negotiations to renew these  expiring provisions provide the United States with the opportunity to  reexamine its defense and security interests in the region in light of the end  of the Cold War and the current use of Kwajalein Atoll in the RMI as a test  site for missile defense.
In June 2001, we briefed your staffs on defense and security issues related  to the Compact and the ongoing negotiations taking place between the  United States and the FSM and the RMI. Specifically, we reported on (1) whether and how the United States has exercised its defense rights and  fulfilled its defense responsibilities under the Compact, (2) current U.S.  defense and security interests in the FSM and the RMI, and (3) the defense  and security issues that are being addressed in ongoing Compact  negotiations. This report summarizes the content of our briefing.
To address these issues, we reviewed the Compact’s defense provisions as  well as the related defense agreements. We also discussed the use of  Compact-related defense provisions, as well as U.S. defense and security  interests in the Pacific, with officials from the Departments of State and  Defense and U.S. intelligence agencies. Our most recent communication  with both departments occurred in October 2001 and our discussion of the  current U.S. defense interests in the FSM and the RMI takes into account  the Department of Defense’s (DOD) most recent strategy and planning  document, the September 2001 Quadrennial Defense Review. In addition,  we reviewed other strategy documents from DOD and public statements  made by DOD and State officials related to the Compact and Asia Pacific  security issues. We also reviewed public negotiating documents and  discussed ongoing negotiations with Department of State officials and  officials from the FSM and the RMI. Finally, we conducted additional audit  work in response to questions raised during our June 2001 briefing and  incorporated this information into the background and other relevant  sections of this report (see app. I for a detailed discussion of our scope and  methodology, including a summary of this additional work).
subsections: section_title: Background
paragraphs: Located just north of the equator in the Pacific Ocean are the two island  nations of the FSM and the RMI. The FSM is a grouping of 607 small islands  in the western Pacific that lie about 2,500 miles southwest of Hawaii (see  fig. 1). The FSM has a total land area of about 270 square miles and is  comprised of four states—Chuuk, Pohnpei, Yap, and Kosrae—with an  estimated total 2000 population of 107,000, according to FSM officials. The  RMI is made up of more than 1,200 islands, islets, and atolls, with a total  land area of about 70 square miles. The Marshall Islands are located in the  central Pacific about equidistant from Hawaii, Australia, and Japan. The  Marshall Islands had a 1999 total population of 50,840, according to the RMI  census.
During the Second World War, the United States engaged in a Pacific  campaign that liberated the islands of Micronesia from Japanese control.  To administer these islands, the United Nations created the Trust Territory  of the Pacific Islands in 1947. The United States entered into the  trusteeship with the U.N. Security Council and became the administering  authority of the four current states of the FSM, as well as the Marshall  Islands, Palau, and the Northern Mariana Islands. The U.N. trusteeship  agreement made the United States financially and administratively  responsible for the region. In addition, the agreement, which designated  this Trust Territory as a strategic trusteeship, granted the United States the  ability to establish military bases, station armed forces, and close off any  area of the Trust Territory for security reasons. During Senate  consideration of this agreement, Secretary of State George C. Marshall,  General Dwight D. Eisenhower, and Admiral Chester A. Nimitz, among  others, remarked that the agreement gave the United States the complete  and exclusive military control over the islands that was necessary to deny  other militaries access to the islands and prevent their use as a springboard  for aggression against the United States.
In 1986, the United States entered into the Compact of Free Association  with the FSM and the RMI. Through this Compact, the two Pacific Island  nations became Freely Associated States and were no longer subject to  U.S. administration under the U.N. Trust Territory of the Pacific Islands.  The Compact, which consists of separate international agreements with  each country, was intended to achieve three principal goals: (1) secure self- government for each country;  (2) assist the FSM and the RMI in their  efforts to advance economic development and self-sufficiency;  and  (3) ensure certain national security rights for the FSM, the RMI, and the  United States.
The defense and security relationships between the United States and the  FSM and the RMI are governed by Title Three of the Compact of Free  Association and three Compact-related agreements—the Status of Forces  Agreement, the Military Use and Operating Rights Agreement, and the  Mutual Security Agreement. The provisions of Title Three expire in 2001,  but they can remain in effect during a 2-year negotiating window that ends  in 2003. If Title Three is not renewed by 2003, the Mutual Security  Agreement enters into force and preserves key aspects of the defense and  security relationship between these countries.
There are four primary U.S. defense rights and responsibilities contained in  Title Three of the Compact and the Military Use and Operating Rights  Agreement between the United States and the RMI (see app. II for a listing  of other defense provisions contained in Title Three of the Compact that  are due to expire in 2001):  Title Three obligates the United States to defend the FSM and the RMI  against an attack or the threat of attack in the same way it would defend  itself and its own citizens. According to officials at DOD, this defense  guarantee is stronger than the U.S. commitment to defend its North  Atlantic Treaty Organization (NATO) allies from outside aggression. If  no agreement is reached with the FSM and the RMI on extending Title  Three’s defense provisions, the United States retains a lesser, albeit significant, obligation to defend the islands through its mutual security  agreements with each country.
Title Three provides the United States with the right of “strategic  denial,” the ability to prevent access to the islands and their territorial  waters by the military personnel of other countries or the use of the  islands for military purposes. This right does not expire with Title Three,  because the mutual security agreements between the United States and  the FSM and the RMI contain this right.
Title Three also grants the United States a “defense veto” over actions by  the governments of the FSM or the RMI that the United States  determines are incompatible with its authority and responsibility for  security and defense matters in these countries. Unlike the U.S.  obligation to defend the islands and the right of strategic denial, the U.S.  defense veto will expire in 2001 unless Title Three of the Compact is  extended (or 2003 if negotiations are ongoing for an additional 2 years).
Finally, through the Military Use and Operating Rights Agreement with  the RMI, the United States secured continued access to military facilities  on Kwajalein Atoll.
At the time the Compact was negotiated (1969-1986), the United States was  concerned about the use of the FSM and the RMI as springboards for  aggression against the United States, as they were in World War II, and the  Cold War incarnation of this threat—the Soviet Union. Australia, New  Zealand, and the United States practiced a coordinated Pacific-wide policy  of strategic denial. This policy was successful in preventing the Soviet  Union from establishing a diplomatic mission in the Pacific islands until  1990, when it did so in Papua New Guinea, and limited Soviet efforts to  establish economic ties and enter into commercial fishing agreements.  The United States and its allies blocked these diplomatic and economic  efforts by the Soviet Union out of concern that closer relations with Pacific  island governments could eventually lead to Soviet political involvement in  and military access to the region.
However, since the Cold War ended, the security environment in the Asia  Pacific region has changed. The coordinated Pacific-wide policy of  strategic denial ended with the dissolution of the Soviet Union; and the  United States does not exhibit the same degree of concern about the  influence of other foreign governments in the Pacific islands today. For  example, China has seven embassies in Pacific Island countries,  conducted $168 million worth of bilateral trade with the South Pacific in  1999, reportedly provided millions of dollars in economic assistance, and  built a civilian space launch tracking facility in Kiribati—an island nation  southeast of the FSM and the RMI. Taiwan also has a presence in some  Pacific Island nations through diplomatic and economic ties and annual  port visits by navy cadets. However, while China and Taiwan may have  made greater diplomatic and economic inroads into the Pacific than the  Soviet Union did, they lack the military power projection capabilities that  defined the Soviet threat. The former Soviet Union was considered an  expansionist superpower with a large “blue water,” or ocean-going, navy  that was oriented toward the Pacific and capable of threatening the United  States and its allies. In contrast, China, for instance, is currently considered  to be a regional military power without a developed blue water naval  capability or power projection capabilities that extend out far beyond its  coastal waters.
section_title: The United States Has Maintained a Presence at Kwajalein Atoll but Has Not Exercised the Compact’s Other Principal Defense Rights
paragraphs: While the United States has maintained facilities on Kwajalein Atoll for  military use, it has not exercised its other primary defense rights nor has it  been required to fulfill its responsibilities contained in the Compact: (1) it  has not had to defend the FSM and the RMI from an attack or the threat of  an attack; (2) it has not invoked its right to deny access to the islands by  foreign militaries or for military purposes; and (3) it has never had to veto  an action by either the FSM or the RMI because the action was  incompatible with the U.S. responsibility and authority for defense and  security matters. As a result, these provisions remain untested.
subsections: section_title: Kwajalein Rights Exercised
paragraphs: The United States has made extensive use of its access rights on Kwajalein  Atoll in the RMI, which it secured through the Military Use and Operating  Rights Agreement with that country (see fig. 2). The United States regularly  conducts intercontinental ballistic missile (ICBM) tests, missile defense  tests, and space tracking operations from facilities on the atoll that are  under the authority of the U.S. Army (see fig. 3). Several ICBM tests are  held annually. Regarding missile defense testing activity, a seventh national  missile defense test was held in December 2001. Finally, equipment on the  atoll is used for space-related activities such as observing space objects  and tracking foreign launches (see app. III for more detailed information on  U.S. operations and facilities on Kwajalein Atoll).
section_title: No Other Provisions Invoked
paragraphs: According to DOD officials, the United States has never had to defend the  FSM or the RMI. DOD and Department of State officials have also stated  that the United States has never invoked its right of strategic denial or  utilized its defense veto. However, a May 2001 port visit by three  Taiwanese naval vessels in the RMI almost provided a test of these two  provisions. In January 2001, the government of the RMI sought approval  from the U.S. government for a 3-day port visit by the Taiwanese ships. The  United States denied this request in a diplomatic note but did so without  mentioning the strategic denial or defense veto provisions of the  Compact. Even though the United States did not cite these provisions in  its written denial, the RMI, in its reply, argued that the strategic denial and  defense veto provisions were not appropriate in this case and that the  government’s ability to conduct its own foreign relations must be  respected. The United States dropped its objection to the proposed visit  following this appeal and a February 2001 port visit by these same ships in  Palau. (See app. IV for time lines detailing the history of the four principal  Compact defense provisions.)
section_title: Continued Access to Kwajalein in the RMI Is the Compelling U.S. Defense Interest in the Area
paragraphs: Continued access to the Kwajalein Atoll in the RMI is the compelling U.S.  defense or security interest in the FSM and the RMI that U.S. officials have  identified. U.S. facilities located on Kwajalein complement the geographic  characteristics that have helped to make the atoll an important part of U.S.  ICBM testing, missile defense testing, and space surveillance operations.  From a broader regional security perspective, the FSM and the RMI are not  currently strategically important to the United States. In addition, other  defense and security interests cited by U.S. officials, such as the right of  strategic denial, the proximity of vital transit routes, and support in the  United Nations, have been overstated.
subsections: section_title: Kwajalein Is Important to U.S. Missile Testing and Space Operations
paragraphs: Senior U.S. policymakers agree that continued access to missile testing and  space-tracking facilities on the Kwajalein Atoll in the RMI is the most  important U.S. defense interest in the FSM and the RMI. DOD has  described the U.S. Army facility on Kwajalein Atoll, known as the Ronald  Reagan Ballistic Missile Defense Test Site, as an important and unique  national asset that would be difficult and expensive to replace. In addition,  the DOD agency responsible for missile defense testing, the Ballistic  Missile Defense Organization (now the Missile Defense Agency), has  determined that currently no acceptable alternative site exists for missile  defense testing against ICBM class threats. The atoll has been the test site  for ballistic missile systems for decades. The facility, which is one of two  sites listed in the 1972 Anti-Ballistic Missile (ABM) Treaty between the  United States and the Soviet Union, is used for long-range missile defense  testing among other missions. According to the U.S. Army Space and  Missile Defense Command (SMDC), the testing range’s remote ocean  location in a sparsely populated area provides an acceptable environment  for ballistic missile testing with minimal environmental impact; and the  atoll’s location near the equator is beneficial for space object and foreign  launch observation. To support missile testing activities, Kwajalein Atoll  has become the home to sophisticated radar, optics, and telemetry  equipment (see fig. 4).
section_title: FSM and RMI Currently Lack Broad Strategic Importance for United States
paragraphs: From a more regional or global point of view, the FSM and the RMI  currently play no role in the execution of U.S. defense and security  strategy. The East Asia Strategy Report, published periodically by DOD  since 1990, refers to these countries as U.S. defense obligations, not as U.S.  defense assets. Congressional hearings on U.S. defense and security  issues in the Asia Pacific region since 1997 have been devoid of references  to these countries. In addition, the United States has never officially  responded to an offer the FSM, Guam’s neighbor, made in 1998 to  preposition military forces in its territorial waters. Portions of a 1999 DOD  Assessment of U.S. Defense and Security Interests in the region provided to  us by the FSM and the RMI also concluded the United States has no current  requirement to preposition equipment in either of these countries. Finally,  the former and current ambassadors to these countries, as well as  representatives from DOD’s Pacific Command, have told us that the FSM is  no longer strategically important to the United States, while the RMI only  remains important because of Kwajalein.
In 2001, two reports called for increasing the U.S. presence in the Western  Pacific, but neither offered any definite role for the FSM or the RMI. DOD’s  2001 Quadrennial Defense Review, released on September 30, sets out a  new strategic vision for defense planning purposes. The review noted the  U.S. overseas presence posture, concentrated in Western Europe and  Northeast Asia, was inadequate for the new strategic environment in which  U.S. interests are global and potential threats are emerging in other areas of  the world. The report called for, among other things, increasing U.S.  presence in the Western Pacific. As a result, the Navy will increase its air  craft carrier presence in the Western Pacific and explore basing options for  an additional three to four naval combat vessels and guided cruise missile  submarines in that area, while the Air Force will ensure that sufficient  refueling and logistics support capabilities are in place. DOD has stated  that the FSM and the RMI may not ultimately be involved in any of the  above decisions. A 2001 RAND report on U.S. force posture in Asia  reached some of the same conclusions as the Quadrennial Defense Review  when it highlighted Guam as the most suitable location for an increased  U.S. Air Force presence in the region.
section_title: Other U.S. Interests Are Overstated
paragraphs: In addition to Kwajalein, U.S. policymakers have cited three main U.S.  interests in the FSM and the RMI: strategic denial, sea lines of  communication, and support from the FSM and the RMI for U.S. positions  in the U.N. General Assembly. However, assessments concerning strategic  denial and its contribution to U.S. security are mixed. Furthermore, our  analyses concluded that the effect of strategic denial, the importance of sea  lines of communication in the region, and the degree of support received  from the FSM and the RMI for U.S. positions in the United Nations have  been overstated.
subsections: section_title: Strategic Denial: No Consensus on Value, Effect Overstated
paragraphs: First, there is a lack of consensus about the value of strategic denial in the  post-Cold War era. Different elements of DOD and the Department of State  have offered a range of opinions on the subject, calling the policy  everything from “essential” to “irrelevant.” In the past 3 years, strategic  denial has been described as  “essential” to counter future uncertainty in the region, by the Office of  the Assistant Secretary of Defense for International Security Affairs;  “a very real interest,” if not as urgent as during the Cold War, by the  Assistant Secretary of State for East Asia and the Pacific;  “a prudent insurance policy” for U.S. security in the Pacific, by the  Department of State’s Office of Compact Negotiations; and  “a policy of the past” that is “irrelevant now with the end of the Cold  War,” by the Commander in Chief, Pacific Command.
Furthermore, statements that have overstated the scope of strategic denial  raise questions about the value assigned to this U.S. right and its  contribution to U.S. defense and security interests. Strategic denial only  covers the land and the 12-mile territorial waters around each island of the  FSM and the RMI (see fig. 5). The geographic limits of strategic denial were  defined by section 461(c) of the Compact, which states that the FSM and  the RMI include the land and water areas to the outer limits of the  territorial sea and air space above such areas as recognized by the United  States. The United States, as a result of its acceptance of most of the  provisions in the 1982 U.N. Convention on the Law of the Sea as customary  law, recognized the 12-nautical mile limit for the FSM and the RMI’s  territorial seas and therefore for strategic denial. However, various  statements by U.S. and foreign officials have described strategic denial as  exclusive U.S. military control over a large, contiguous area of the Pacific  Ocean. Specifically,  An official in the Office of Compact Negotiations at the Department of  State described strategic denial as “the most significant U.S. interest at  the time the Compact was negotiated” because of the value placed on  denying military access to “over half a million miles of the Pacific Ocean  between Hawaii and Guam” in a paper presented at the 2001 Island State  Security Conference.
The Assistant Secretary of State for East Asia and the Pacific testified at  a 1998 congressional oversight hearing on the Compact that strategic  denial “means taking a vast stretch of the Pacific and maintaining U.S.  military control and ensuring we could deny access to the ships of other  countries.”
A staff briefing paper submitted for the record during the same 1998  hearing stated that the U.S. right of strategic denial and defense veto  gave the United States “exclusive military rights and legal defense veto  over third party use of any land, ocean, or airspace of the islands.” This  paper stated that strategic denial included the islands’ 200-mile  exclusive economic zone, “an area larger than the continental United  States” (see fig. 5).
The RMI Minister of Foreign Affairs and Trade testified in the 1998  hearing that the RMI “provides the United States strategic denial rights  over 1 million square miles of the Central Pacific.”
Finally, in a paper presented at the 2001 Island State Security  Conference, the Executive Director of the Joint Committee on Compact  Economic Negotiations for the FSM stated that “strategic denial and the  defense and security concessions in the Compact established an  internationally recognized U.S. zone of influence covering the 1,000,000  square miles of the FSM’s exclusive economic zone in the western  Pacific.”
These statements, if taken literally, not only overstate the scope but also  the effect of strategic denial. While the right of strategic denial prohibits  third countries from establishing land-based operations in the FSM and the  RMI, the United States cannot use this right to prevent ships from  conducting military activities outside of the 12-mile territorial waters of  these countries. For example, in the mid-1980s and early 1990s, there were  numerous reports of Russian trawlers collecting information in the waters  around Kwajalein. Further, the United States recognizes that under  international law and custom, military vessels have a right to “innocent  passage” through the coastal waters of the islands. According to DOD and  the Department of State, these rights are identical to those that the United  States exercises in its own territorial waters. However, Department of  Defense officials have noted that in denying third-country access to land  facilities, the right of strategic denial limits the ability of other nations to  undertake long-term naval operations in the area, and makes activities in  the region, such as surveillance, more costly.
The importance of sea lines of communication, or sea routes, that run near  or through the FSM and the RMI is another area in which the value of U.S.  interests has been overstated. While U.S. policymakers have stated that the  critical commercial and military transit routes run near or through the FSM  and the RMI, there is evidence to the contrary. Officials from the  Department of the State and the U.S. Army in the RMI told us that one of  Kwajalein’s positive qualities was its isolated location, away from  commercial shipping lines. In addition, a 1992 analysis of U.S. defense  interests in the Pacific Islands stated that the FSM and the RMI lie well to  the south of many north Pacific sea and air lines in peacetime; it is only  when these north Pacific lines are threatened that air and sea movements  would shift southward to minimize adversary interdiction. Our analysis of  U.S. trade flows in the Pacific supports these two assessments. Of the less  than 23 percent of total U.S. trade that crosses the Pacific, more than 61 percent (or about 14 percent of total U.S. trade) involves Japan, China,  Taiwan, and Korea, all of which lie north of the FSM and the RMI. Other  discussions of Pacific sea lines by U.S. officials and policy analysts have  concentrated on chokepoints in Southeast Asia (see fig. 6). An analysis of  these chokepoints in a 1996 National Defense University publication, stated  that in the event all the strategic straits in Southeast Asia are closed or  blocked, trade flows originating from the Middle East and South Asia could  be rerouted south of Australia. Depending on the final destination of these  goods, the rerouted ships could possibly pass near or through the FSM.  Although the chokepoints analysis does not specifically illustrate how U.S.  trade flows from this area would be affected, it appears they would transit  south of the FSM and the RMI in this scenario.
Finally, the level of support from the FSM and the RMI for U.S. positions in  the U.N. General Assembly has been overestimated. Although U.N. voting  does not directly relate to U.S. defense and security interests, U.S.  government officials consistently referred to the support of these countries  in the United Nations as one aspect of the strategic importance of these  countries to the United States. In fact, an official in the Department of  State’s Bureau of International Organizations called the FSM “the number  one friend of the United States at the United Nations,” while the RMI was  referred to as “one of the better members” of the General Assembly. These  assessments were based on measures of voting coincidence that appeared  in the 2000 edition of the department’s report to Congress, Voting Practices  in the United Nations. In 2000, the FSM was said to have voted with the  United States 100 percent of the time, while the RMI was credited with  casting an identical vote about 74 percent of the time. However, the  Department of State’s methodology does not take into consideration those  occasions when the countries were absent or abstained from voting.  Including these absences and abstentions drops the countries’ voting  coincidence numbers to about 54 percent and 52 percent, respectively (see  table 1). While these countries have agreed with the United States about as  often as the average NATO country, support on a few issues identified as  important by the Department of State, such as votes involving the Middle  East and other issues where the United States is often isolated, and the  numbers reported in the Department of State report have led to a  perception of much stronger support than our analysis indicates (see app. V for more discussion of the Department of State report Voting  Practices in the United Nations).
section_title: Current Negotiators Have Expressed Their Intent to Preserve the Status Quo on Defense and Security Relations
paragraphs: The ongoing Compact negotiations have resulted in agreements in  principle between the United States and the FSM and the RMI, respectively,  to continue their existing defense and security relationships. Without a  renewal of the Compact’s defense provisions, one of the four primary U.S.  defense rights and responsibilities will completely expire at the end of the  negotiating period in 2003—the U.S. defense veto. U.S. officials believe that  continued economic assistance is important to reaching a final agreement  on renewing the Compact’s defense provisions, providing a favorable  environment for the United States to exercise its defense rights, such as  strategic denial and Kwajalein access, and advancing U.S. interests.
subsections: section_title: Agreement in Principal Reached on Extending Defense Provisions
paragraphs: All parties to the current Compact negotiations have expressed their intent  to preserve the status quo on defense and security matters. During  negotiations with each country, the United States and the FSM and the RMI,  respectively, have issued joint statements calling for the continuation of the  defense and security relationship set forth in Title Three of the Compact. If  such an agreement is reached, the U.S. defense veto would be extended as  well as the U.S. obligation to defend these countries as the United States  defends itself and its citizens. If an agreement on economic assistance is  not reached by 2003, the defense veto will expire; and the United States will  retain a lesser, albeit still significant, obligation to defend the FSM and the  RMI. According to a representative from DOD’s Pacific Command, U.S.  defense interests would not be hurt by the loss of the defense veto. Finally,  the United States has already secured continued access to Kwajalein  through 2016, by exercising its option to unilaterally extend the Military  Use and Operating Rights Agreement with the RMI.
section_title: U.S. Rights and Interests Facilitated by Economic Assistance
paragraphs: Officials from the Department of State’s Office of Compact Negotiations  have indicated that the agreement in principle to extend the defense and  security provisions contained in Title Three is part of a package (as  indicated in the joint statements signed by the parties) that would also  include continued U.S. economic assistance, as well as various other  measures, such as increased accountability over the use of Compact funds.  In addition, statements from both DOD and the Department of State have  described linkages between continued economic assistance and the ability  of the United States to exercise its defense rights. A June 2001 statement,  by a representative from the Department of State’s Office of Compact  Negotiations, argued that continued economic assistance was justified by  U.S. interests such as strategic denial, political and economic stability,  support for U.S. positions in international and regional organizations,  access to Kwajalein, and the need to provide a positive context for the  United States to exercise its defense rights. Similarly, in a June 2000  congressional hearing on the Compact, an official from the Office of the  Assistant Secretary of Defense for International Security Affairs, stated  that providing continued Compact assistance was in the best interest of the  United States because it helps preserve access to key defense interests for  our forces while denying potentially hostile forces access to U.S. economic  and defense interests in the region. Finally, the Executive Director of the  Joint Committee on Compact Economic Negotiations for the FSM, has  stated that the defense rights delegated to the United States under the  Compact are linked to the economic assistance provided by the United  States. Furthermore, it is the FSM’s position that the economic, political,  and security goals of the Compact are closely interrelated; thereby making continued economic assistance an important part of the sustained political  development and economic advancement necessary to attain the mutual  security goals of the FSM and the United States.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD, the Department of State, and the  Department of the Interior, as well as the governments of the FSM and the  RMI, for comment. The Departments of State and the Interior chose not to  provide comments on the draft report. Regarding its decision not to submit  comments, the Department of State said that it had been working with us  since June 2001, when we presented this material in briefings to  congressional staff, and had, during that time, made its views on U.S.  defense interests in the FSM and the RMI known. DOD emphasized in its  comments that the U.S. right to exclude third-country militaries from the  territory of the FSM and the RMI remains an important one due to future  uncertainty about events in the region. It also noted that it would be unwise  to assume that the end of the Cold War has lessened the strategic  importance of Micronesia to U.S. interests. In our response to DOD’s letter,  we cite a passage from a DOD assessment that states that the strategic  importance of the FSM and the RMI has in fact lessened over the past  50 years.
The FSM government also disagreed with our conclusion that the FSM  currently lacks broad strategic importance for the United States and that  the importance of certain security interests involving the FSM has been  overstated. In its comments, the RMI government stressed its strategic  significance and historic contribution to the United States as a site of  nuclear test and argued that the rights granted to the United States under  the Compact have been significant. The RMI government also expressed  the view that we have not properly characterized the relationship between  the United States and the U.N. Trust Territory of the Pacific Islands at the  time of Compact negotiations and thus had overemphasized the U.S. desire  to address Cold War concerns in the Compact, while de-emphasizing the  role other issues played in the negotiations. We disagree with most points  made by the FSM and RMI governments; and, in responding to comments  from these two countries, have made reference to report passages that  support our views. The RMI government also stated that we should  distinguish between economic assistance provided to the FSM and the  RMI. We agree, and have provided separate assistance figures for each  country. Comments received from DOD, as well as the FSM and RMI  governments, and our assessments of them are included in appendixes VI  through VIII.
We are sending copies of this report to the Secretary of Defense, the  Secretary of State, the Secretary of the Interior, the President of the FSM,  the President of the RMI, and interested congressional committees. We will  also make copies available to other interested parties upon request.
If you or your staff have any questions regarding this report, please call me  at (202) 512-4128. Other GAO contacts and staff acknowledgments are  listed in appendix IX.
section_title: Objectives, Scope, and Methodology
paragraphs: In June 2001, we briefed the staffs of the Chairman of the House Committee  on Resources, the Ranking Minority Member of the House Committee on  International Relations, the Chairman of the Subcommittee on East Asia  and the Pacific, House Committee on International Relations, and  Congressman Bereuter on defense and security issues related to the 1986  Compact of Free Association and the ongoing negotiations taking place  between the United States and the Federated States of Micronesia (FSM)  and the Republic of the Marshall Islands (RMI). Specifically, our briefing  addressed (1) whether and how the United States has exercised its defense  rights and fulfilled its defense responsibilities under the Compact, (2) the  current U.S. defense and security interests in the FSM and the RMI, and  (3) defense and security issues that are being addressed in the ongoing  Compact negotiations.
Since June, we have conducted additional audit work in response to  questions raised during those briefings. These questions prompted us to  address the uniqueness of the U.S. obligation to defend these islands, the  influence of foreign governments in the region, and the utility of some  defense provisions in the current Asia-Pacific security environment.
subsections: section_title: Whether and How the United States Has Exercised Compact Defense Rights and Fulfilled Its Defense Responsibilities
paragraphs: To address this objective, we reviewed the Compact’s defense provisions  (Title Three) as well as the related defense agreements (the mutual security  agreements, the military use and operating rights agreements, and the  Status of Forces Agreement) and discussed these documents with  Department of Defense (DOD) and Department of State officials to identify  the principal defense and security provisions. We also reviewed the  congressional hearing record on the Compact, going back to 1984 oversight  hearings, to determine the specific defense and security provisions that  were focused on in statements and discussions. We then discussed the  degree to which the U.S. government has invoked its defense rights or  discharged its defense responsibilities with these same officials (DOD  agencies interviewed included the Office of the Secretary of Defense, the  Office of the Joint Chiefs of Staff, the U.S. Pacific Command, the U.S. Army  Space and Missile Defense Command, and the Ballistic Missile Defense  Organization. Department of State offices interviewed included the Bureau  of East Asia and Pacific Affairs, the Office of the Legal Advisor, and the  Office of Compact Negotiations). We also interviewed Department of State  officials and reviewed Department of State documentation pertaining to  the recent visit of Taiwanese ships to the RMI and Palau. To review U.S.  operations at Kwajalein Atoll, we visited the atoll islands of Kwajalein and  Roi-Namur in April 2000 to tour the facilities and discuss DOD activities on  the islands with U.S. government officials, including the range Commander,  as well as contractor personnel. We also visited the nearby island of Ebeye  and toured facilities built by the U.S. military, as well as housing used by  relocated mid-atoll Marshallese citizens. We also discussed Ebeye  development projects involving schools, hospitals, and infrastructure  improvements, with local development authority officials and reviewed  associated documentation.
section_title: Current U.S. Defense and Security Interests in the FSM and the RMI
paragraphs: To conduct our work in this area, we discussed U.S. defense and security  interests in the FSM and the RMI with officials from DOD, the Department  of State, the Central Intelligence Agency, and the Defense Intelligence  Agency. Furthermore, we obtained the views of the former U.S.  Ambassador to the FSM and the current and former U.S. ambassadors to  the RMI. We reviewed DOD reports (2001 Quadrennial Defense Review,  East Asia Strategy Reports and classified assessments of U.S. defense and  security interests in the countries), statements by the Commander in Chief  of the U.S. Pacific Command, congressional testimony on the Compact  (from 1984 through 2000) and U.S. defense interests in the Asia Pacific  region (from 1998 through 2000), and the 2001 RAND report entitled The  United States and Asia: Toward a New U.S. Strategy and Force Posture.  We also reviewed the legislative history of the Compact.
For our examination of the scope and effect of strategic denial, we  reviewed the 1982 United Nations (U.N.) Convention on the Law of the Sea,  received a legal interpretation of the relevant Compact provision from DOD  and the Department of State, located and examined statements in the  congressional record, interviewed officials from DOD and the Department  of State, and worked with the National Imagery and Mapping Agency to  produce a map of the territorial boundaries of the FSM and the RMI.
For our examination of important sea lines of communication, we reviewed  statements from congressional hearings on the Compact that referred to  these sea routes; analyzed Department of Commerce data on U.S.-Pacific  trade flows (2000 data on total trade by U.S. Pacific ports); explored the  issue of chokepoints in academic papers, government documents, and  Chokepoints: Maritime Economic Concerns in Southeast Asia; and  studied works on U.S. interests in the region written by former U.S.  officials, such as The United States and the Pacific Islands, by John  Dorrance.
Finally, for our examination of voting in the U.N. General Assembly, we  analyzed the data on the voting behavior of the FSM and the RMI contained  in the Department of State’s annual report Voting Practices in the United  Nations and data from the United Nations on voting margins, and  interviewed current and former Department of State officials from the  Bureau of International Organization Affairs, the Bureau of East Asia and  Pacific Affairs, and the U.S. Mission to the United Nations.
section_title: Defense and Security Issues in the Ongoing Compact Negotiations
paragraphs: To address our third objective, we examined the Compact and its related  agreements to determine the status of certain defense provisions after  2001; interviewed officials from DOD and the Department of State as well  as the FSM and RMI governments; and reviewed joint communiqués issued  in 2001 by the U.S. government and the governments of the FSM and the  RMI, regarding negotiating principles related to defense matters.
We performed our work at various points from December 1999 through  October 2001, simultaneously with our efforts for other related  assignments. Our work was conducted in accordance with generally  accepted government auditing standards.
section_title: Expiring Defense-Related Provisions of the Compact
paragraphs: As mentioned in this report, the defense veto contained in the Compact’s  Title Three is due to expire in 2001 (or 2003 if negotiations continue for an  additional 2 years). In addition to this provision, Title Three contains other  provisions that are due to expire in 2001 or 2003. These include provisions  stating that:  The government of the United States shall not, in the FSM or the RMI,  test by detonation or dispose of any nuclear weapon, nor test, dispose  of, or discharge any toxic chemical or biological weapon.
The government of the United States may invite members of the armed  forces of other countries to use military areas and facilities in the FSM  or the RMI, in conjunction with and under the control of U.S. armed  forces.
If, in the exercise of its authority and responsibility under Title Three,  the government of the United States requires the use of areas within the  FSM or the RMI in addition to those for which specific arrangements are  concluded, it may request the government concerned to satisfy those  requirements through leases or other arrangements. The FSM or RMI  governments shall sympathetically consider any such request and shall  establish suitable procedures to discuss it with and provide a prompt  response to the U.S. government.
The government of the United States shall provide and maintain fixed  and floating aids to navigation in the FSM and the RMI at least to the  extent necessary for the exercise of its authority and responsibility  under Title Three.
Subject to the terms of the Compact and related agreements, the  government of the United States, exclusively, shall assume and enjoy, as  to the FSM and the RMI, all obligations, responsibilities, rights and  benefits of  any defense treaty or other international security agreement applied  by the government of the United States as Administering Authority of  the Trust Territory of the Pacific Islands as of the day preceding the  effective date of the Compact and  any defense treaty or other international security agreement to which  the government of the United States is or may become a party that it  determines, after appropriate consultation with the FSM or RMI  government, to be applicable to the FSM or the RMI.
Any citizen of the FSM or the RMI shall be eligible to volunteer for  service in the armed forces of the United States. (Of note, volunteers  must meet the required mental, physical, and moral qualifications to join  the U.S. armed forces. For 1998, 42 FSM citizens and 8 RMI citizens  enlisted in the U.S. Army).
The government of the United States shall have enrolled, at any one  time, at least two qualified students, one each from the FSM and the  RMI, in each of the U.S. Coast Guard Academy and the U.S. Merchant  Marine Academy.
The governments of the United States and the FSM or the RMI shall  establish two Joint Committees empowered to consider disputes under  the implementation of Title Three and its related agreements.
In addition to these Title Three provisions, the Military Use and Operating  Rights Agreement with the FSM, which authorizes up to four Civic Action  Teams (CAT) in the FSM, will also expire in 2001. There are currently three  CATs in the FSM. CATs are to conduct activities that focus on the special  development needs of the country and are to provide training for the local  population in general engineering skills. CAT teams work on projects (such  as roads and school improvements) that the host governments identify. The  teams are composed of one officer and 12 enlisted men and are shared  between the Army, Navy, and Air Force. The CAT team budget for fiscal  year 2001 was close to $2 million, according to a DOD official. This official  told us that while CAT costs are to be shared between the United States and  host governments, the United States has not been receiving the required  funds from the FSM. The U.S. government has raised concerns that CAT  teams are idle too much of the time and work on projects that quickly fall  into disrepair.
section_title: U.S. Military Operations and Facilities on Kwajalein Atoll, Republic of the Marshall Islands
paragraphs: The United States has maintained a military presence in the Marshall  Islands for several decades, and DOD currently conducts ballistic missile  and missile defense testing on Kwajalein Atoll. U.S. equipment on the atoll  also allows for space observation, identification, and tracking activities.  The U.S. government, which provides funding to the landowners of the  Kwajalein Atoll through the RMI government and is a key employer in the  RMI, has also experienced some difficulties with the local Marshallese  population. No recent studies have been completed regarding whether  there is an acceptable alternative site to Kwajalein Atoll for all U.S.  defense-related activities conducted there.
subsections: section_title: A History of U.S. Operations on Kwajalein Atoll
paragraphs: The United States has had a military presence on the Marshall Islands in the  central Pacific Ocean since liberating the islands from the Japanese in 1944  in Operation Flintlock. The U.S. government conducted nuclear tests in  these remote islands near the equator during the 1940s and 1950s, and a  military base was constructed on Kwajalein Atoll to support this testing  (see fig. 7). In 1959 Kwajalein was selected as the testing site for the NIKE- ZEUS Anti-Missile System. In 1964, control of this missile testing range was  transferred from the U.S. Navy to the U.S. Army. During the 1960s and  1970s, the range was used to test rocket systems such as NIKE-ZEUS,  Sprint/Spartan, and Minuteman.
Kwajalein Atoll is currently home to missile and missile-defense testing and  space tracking facilities that use land provided to the U.S. government  under a Compact-related agreement, the Military Use and Operating Rights  Agreement with the RMI. In September 1999, the U.S. government  exercised its right to unilaterally extend the agreement, giving the United  States access to Kwajalein Atoll until 2016. The RMI government pays  Kwajalein Atoll landowners for U.S. use of the atoll. Most U.S. equipment is  located on the Kwajalein Atoll islands of Kwajalein and Roi-Namur, though some equipment is maintained on five other islands in the atoll. The U.S.  testing range on Kwajalein is under the authority of the U.S. Army Space  and Missile Defense Command (SMDC), and as of June 2001, it became  officially known as the Ronald Reagan Ballistic Missile Defense Test Site.  The test site, which is government owned and contractor operated, is  home to about 75 U.S. government personnel as well as about 1,600  contractor staff and 1,000 family members. SMDC estimates that the facility  represents a $4 billion investment.
section_title: Current U.S. Activities and Facilities on Kwajalein Atoll Focus on Missile Testing and Space Operations
paragraphs: The U.S. range on Kwajalein Atoll is used for intercontinental ballistic  missile (ICBM) testing (see fig. 8). One ICBM system that currently uses  Kwajalein for testing is the Minuteman III. Three tests per year of this  system, which was developed in the late 1950s, occur at Kwajalein. Another  ICBM system is the Peacekeeper (one test/year), the newest U.S. ICBM  strategic weapon system. Furthermore, this range is used for long-range  missile defense testing. Seven national missile defense tests have been  conducted, with the most recent test in December 2001.
Range equipment is also used to conduct space observation, identification,  and tracking activities. The range has provided more than 32,000  observations for updating the catalog of near-earth and deep-space objects.  It also responds to assignments for the tracking of new foreign launches  (commercial and military, announced and unannounced) and provides  radar images of high-interest satellites. The facility also supports the  National Aeronautics and Space Administration’s manned and unmanned  space operations and experiments.
To support these activities, the missile range at Kwajalein possesses a  unique collection of technical equipment. The core of the range’s  instrumentation is the Keirnan Reentry Measurements Site, a sophisticated  radar suite. The radar sensors are located on the island of Roi-Namur. Data  are collected across the radar frequency spectrum with a high degree of  accuracy and are analyzed by the Massachusetts Institute of Technology’s  Lincoln Laboratory and other facilities. The Kwajalein range also has  ground-based optics such as tracking instruments, ballistic cameras, and  documentary photography systems. In addition, twelve antennas are used  to receive, record, and process flight data. Furthermore, the range has a  deep-water acoustic sensor array located in the ocean area off the east reef  of Kwajalein Atoll that can determine the precise location of reentry  vehicle impacts. A submersible vehicle is also available to locate debris  within the Kwajalein lagoon. Finally, the range has a launch site on Meck  Island, with additional launch facilities on other RMI islands as well as  Wake Island.
section_title: U.S. Government Provides Funding and Employment Opportunities, but Local Kwajalein Issues Have Posed Difficulties
paragraphs: The U.S. military presence on Kwajalein Atoll has led to tension with the  Marshallese population on the atoll over the years. For example, there were  four periods of protests by Marshallese landowners of the Kwajalein Atoll  prior to enactment of the Compact. According to an SMDC official, these  protests occurred because landowners were concerned that (1) the U.S.  government was not paying enough for its use of various Kwajalein Atoll  islands and (2) following enactment of the Compact, all payments to  landowners and future negotiations regarding use of the atoll would be  conducted on a government-to-government basis, bypassing any direct  dealings with landowners. During the protests, the landowners occupied  Kwajalein Atoll islands, including Kwajalein and Roi-Namur. While no  major missile tests were delayed or cancelled as a result of the protests,  two test missions scheduled for August 1979 were cancelled. Protests  during the 1980s reportedly disrupted the community on Kwajalein and put  a strain on security forces.
Furthermore, the range is a top employer in the Marshall Islands, with  about 1,400 Marshallese employed at the facility and earning a higher wage  than is reportedly available elsewhere in the country. These Marshallese  who are employed at the range are generally not permitted to live on  Kwajalein Island and so live on the small nearby island of Ebeye. In  addition, in 1965 the U.S. Army relocated Marshallese citizens living on  mid-atoll islands to Ebeye so that ballistic missile testing could be  conducted more safely within the mid-atoll area. Ebeye is severely  overcrowded, with more than 9,300 people living on about 90 acres of land  (see fig. 9). Efforts to improve the quality of life on the island, such as the  provision of electricity and potable water, have experienced failures in  recent years. Conditions on the island have reportedly deteriorated over  the last decade, though numerous efforts are now being planned or are  under way to improve the quality of life on Ebeye.
section_title: DOD Has Conducted Few Reviews of Possible Alternatives to Kwajalein
paragraphs: In 1979, DOD conducted an analysis of possible locations for relocating  U.S. facilities on Kwajalein Atoll. Key criteria used to determine the best  alternative site were political supportability, land availability, and  population distribution. DOD determined that the Northern Mariana  Islands were the best alternative to Kwajalein Atoll for establishing a major  DOD test range, with an estimated investment cost of over $2 billion (in  2000 dollars). Other alternative sites were located in the state of Chuuk in  the FSM and in Kiribati, located southeast of the RMI. DOD officials now  view this study as outdated. DOD has not conducted a detailed study  examining potential alternative sites for all the activities undertaken at that  U.S. facility on Kwajalein since 1979. However, the DOD agency  responsible for missile defense testing, the Ballistic Missile Defense  Organization, has conducted some analysis of alternatives to Kwajalein and  has determined that currently no acceptable alternative site exists for  missile defense testing against ICBM class threats.
section_title: Use of Primary Compact-Related Defense Provisions
paragraphs: The United States acquired four primary defense and security rights and  responsibilities as a result the Compact of Free Association and its related  agreements: (1) the obligation to defend the FSM and the RMI against  attack; (2) the right to deny access to foreign militaries and foreign military  activity (strategic denial); (3) the right to prevent the FSM and the RMI  governments from acting in a way that is incompatible with U.S. authority  and responsibility for defense and security matters (defense veto); and  (4) the right to use certain land (i.e., Kwajalein Atoll in the RMI) for military  purposes. Figures 10 through 13 describe the legal provisions in which  these rights and responsibilities are contained, the extent that each  provision has been used since the Compact was enacted in 1986, and what  happens to each provision if agreement is not reached on its renewal  before the negotiating period ends in 2003.
section_title: Measuring the Level of FSM and RMI Support for the U.S. Positions in the United Nations
paragraphs: While the support of the FSM and the RMI for U.S. positions in the United  Nations is not directly related to U.S. defense and security interests, U.S.  officials cite this support and support in other international fora as a  reason for why these islands are strategically important to the United  States. The primary source that officials refer to in these statements is the  Department of State’s annual report on Voting Practices in the United  Nations. This report, which has used a consistent methodology to  compare the votes cast by countries in the U.N. General Assembly with U.S.  votes, has been incorrectly interpreted and used to overstate the level of  support provided by the FSM and the RMI. By excluding instances where  these countries were absent or abstained in their interpretation of this  report, officials have overlooked the report’s cautionary message in its  methodology section. The report indicates that abstentions and absences  are often difficult to interpret, but they make a mathematical difference,  sometimes major, in the voting coincidence results. The case of Palau, a  country near the FSM and the RMI, illustrates this point. An official in the  Bureau of International Organizations at the Department of State  characterized Palau as the number-two friend of the United States in the  General Assembly because of its 100-percent voting coincidence with the  United States in 2000. However, this percentage is based on just 11 identical  votes cast out of a possible 65 votes (about 17 percent) because Palau’s 2 abstentions and 52 absences are not included in the voting coincidence  percentage. Table 1 in our letter shows these differences for the FSM and  the RMI.
The FSM and the RMI have also gained visibility by supporting the United  States on important issues in the General Assembly. Each year the  Department of State report highlights about 13 votes (or 18 percent of total  General Assembly votes) on issues the United States considers important,  such as arms control, Middle East issues, and human rights. On some of  these issues, the United States is one of only a few dissenters, making FSM  or RMI support highly visible. However, officials from the Department of  State and the FSM concede that this support has more symbolic  significance than actual significance given the overwhelming margins on  these votes. For instance, during the 2000 General Assembly, the FSM  joined the United States and Israel as the only dissenters on a resolution  concerning the risk of nuclear proliferation in the Middle East (the RMI  was one of only 8 countries who abstained), and the RMI joined the United  States and Israel as the only dissenters on a resolution critical of the U.S.  embargo of Cuba (the FSM was absent). The vote totals for these  resolutions were 157-3-8 (for-against-abstain) and 167-3-4 respectively.  Table 2 contains information on the number of votes the FSM and the RMI  have cast that are either identical to or the opposite of United States votes  on important issues, as well the number of times they have abstained or  been absent, since their induction into the United Nations in 1991.
While the level of support by the FSM and the RMI for U.S. positions in the  U.N. General Assembly has been overstated, these countries have, in recent  years, achieved a level of support that resembles the average North Atlantic  Treaty Organization (NATO) country (see figs. 14 through 16). A closer  look at the voting profiles of the FSM, the RMI, and NATO also reveals the  importance of acknowledging abstentions and absences in measures of  voting coincidence. For example, in 2000, the FSM cast 35 votes (out of 65)  identical to those cast by the United States, while the RMI and the average  NATO country each cast 34 identical votes. However, due to the exclusion  of abstentions and absences from its calculations, the Department of State  reported voting coincidence percentages for the FSM, the RMI, and the  average NATO country that ranged from about 100 percent for the FSM to  74 percent for the RMI to 63 percent for NATO.
section_title: Comments from the Department of Defense
subsections: section_title: GAO Comments
paragraphs: The following are GAO’s comments on the letter from DOD dated  December 7, 2001. 1. This report does not determine whether the right of strategic denial is  essential. However, we did find that (1) strategic denial has never been  invoked (see p. 13); (2) there is a lack of consensus among U.S.  policymakers concerning its value in the post-Cold War era (see p. 17);  and (3) the scope and effect of this right have been overstated in public  statements by officials from the United States, the FSM, and the RMI  (see p. 18). 2. The cited DOD study reached a different conclusion on how the  strategic importance of Micronesia has changed over time than the one  reported in DOD’s letter. According to unclassified portions of this  1999 assessment, the strategic importance of Micronesia to the defense  of American national interests has clearly lessened in the 50 years since  World War II. The study explained that this is the result of a number of  factors, including the advent of intercontinental, nuclear-armed  missiles; refuelable, long-range aircraft; and ballistic missile-carrying  submarines, as well as increases in the operating range and at-sea  endurance of America’s surface naval forces. Finally, the study stated  that the end of the Cold War appears to have removed the only current  blue-water navy and long-range aviation threat to U.S. forces in the  Pacific. This is consistent with our conclusion about the FSM and the  RMI’s current lack of broad strategic importance to the United States  (see pp. 16-17).
section_title: Comments from the Government of the Federated States of Micronesia
subsections: section_title: GAO Comments
paragraphs: The following are GAO’s comments on the letter from the government of  the FSM dated November 19, 2001. 1. We consulted with DOD on numerous occasions following September  11, 2001, to ensure that the conclusions reached in this report still  reflected current U.S. interests in the Asia Pacific region. In addition,  on pp. 16-17 we discuss the Quadrennial Defense Review, which, when  it was released on September 30, set out a new strategic vision for  defense planning purposes. Finally, with regard to the future Asia  Pacific security environment, DOD did not, in response to our request,  provide us with specific information on how the Compact’s defense  provisions might aid the United States in its response to potential  threats such as conflict on the Korean Peninsula, territorial disputes in  the South China Sea and Northeast Asia, and separatism in Indonesia. 2. We acknowledge that such statements have and continue to be made by  senior U.S. policymakers. We examined these statements and gave  officials at both DOD and the Department of State the opportunity to  provide specific examples of the FSM’s strategic importance in the  current security environment. In response, we received some general  information, such as the views of several DOD officials concerning the  utility of strategic denial, which are noted on p. 19. However, this  information did not change the conclusion we reached on pp. 16-17  about the FSM currently lacking broad strategic importance for the  United States. DOD reached a similar conclusion in its 1999 assessment  of U.S. interests in the Freely Associated States (FAS) – the FSM, the  RMI, and Palau. See p. 52, comment 2 for additional information on  DOD’s conclusion. 3. We maintain that the effect of strategic denial, the importance of sea  lines of communication in the region, and the degree of support  received from the FSM for U.S. positions in the United Nations have  been overstated. See p. 63, comments 9-12 and 14, and p. 64, comment  16 for more detailed information. 4. Our report concludes that continued U.S. access to facilities on the  Kwajalein Atoll in the RMI is both the key and compelling U.S. defense  interest in the FSM and the RMI. In this context, “key” means  important, fundamental. Kwajalein is the most important U.S. defense  interest in the two countries. In this context, “compelling” means  convincing. Among the U.S. interests commonly cited in the FSM and  the RMI, including Kwajalein, strategic denial, sea lines of  communication, and U.N. support, we found the evidence supporting  Kwajalein’s importance most convincing. 5. See comment 2. We repeatedly sought to obtain the factual and detailed  underpinnings that support Dr. Campbell and Mr. Smith’s statements,  but DOD did not provide this information. 6. See comment 1. The focus of this report is on current U.S. defense  interests in the FSM and the RMI. However, we examined the potential  role of the FSM and the RMI with regard to the Quadrennial Defense  Review on pp. 16-17 and noted DOD’s views that the FSM and the RMI  may not be included in DOD plans to increase the U.S. presence in the  Western Pacific. 7. The official U.S. Pacific Command position on the strategic importance  of the FSM is classified. This information, as well as classified details of  the 1999 DOD Assessment of U.S. Interests in the FAS, was presented to  the requesters of this report in June 2001. Further, the views from the  U.S. Pacific Command officials, which are included in our report, were  collected from individuals specifically designated by the Command to  respond to our questions. 8. The U.S. Pacific Command has told us that the United States has access  to airfields throughout the FAS. According to the Air Mobility  Operations Center within the Pacific Command Air Force Operations  Center, the U.S. Air Force (USAF) does not use Yap and Chuuk for  refueling as a matter of routine operations. As a rule, when USAF  fighters transit the Pacific Command’s Area of Responsibility they have  tanker escort, which means they do not need to refuel on the ground.  The Air Mobility Operations Center does not keep track of fighter  refueling and cannot verify whether any USAF fighters have refueled at  Yap or Chuuk. However, a Pacific Command representative stated that  it is quite possible that the Marines or Navy could have dropped in for  fuel, but there is no way to provide an accounting of how many times  and for what reasons. He stated that there have been literally hundreds  of flights transiting the Pacific Command’s Area of Responsibility in  support of Operation Enduring Freedom. U.S. pilots are given a great  deal of latitude; and, given countless possible scenarios, some could  have dropped into the FSM to refuel. Finally, he stated that Palau and  Guam have also been used recently for refueling purposes, with Guam  used more often than small airfields when it is convenient. However,  carrier-based aircraft transiting the Pacific Command’s Area of  Responsibility might find a more direct route by flying through the FSM  or the RMI rather than Guam. 9. This report does not conclude that the value of strategic denial is  overrated. However, we did find that (1) strategic denial has never been  invoked (see p. 13); (2) there is a lack of consensus among U.S.  policymakers concerning its value in the post-Cold War era (see p. 17);  and (3) the scope and effect of this right have been overstated in public  statements by officials from the United States, the FSM, and the RMI  (see p. 18). Finally, with regard to the effective area of strategic denial,  we acknowledge both the right to deny land access and the potential  effect of this denial on the ability of other countries to conduct long- term naval operations (p. 19). 10. See p. 21, footnote 24 for a discussion of U.S. trade flows. Our analysis  illustrates that most U.S. Pacific trade passes well north of the FSM and  the RMI. 11. Of note, the examples offered here ignore the fact that strategic denial  would prevent the use of the FSM by a third-party military to threaten  Guam or sea lines. Also, in response to our questions on how U.S.  interests would be affected if a third-party military had a presence in  the FSM or the RMI, DOD focused exclusively on potential surveillance  activities, not threats to Guam or shipping. 12. We have carefully examined these route charts and determined that  they support our finding that the major sea lines of communication  between the United States and Guam as well as key trading partners in  Asia run north of the FSM and the RMI. In addition, we have amended  footnote 23 on p. 21, to note that there are sea lines running between  Australia and Japan that transit the FSM. Finally, these route charts  appear to show that major sea lines between the United States and  Australia lie close to 2000 kilometers away from the nearest point in the  FSM. 13. We provided a classified briefing to our requesters in June 2001. This  briefing included a discussion of contingency war plans and  operational scenarios, as well as other information gathered from U.S.  defense and intelligence agencies. 14. These specific instances of FSM support for U.S. positions were  included in the draft provided to the FSM for comment (see app. V, p. 45, footnote 40, and p. 46, footnote 45). 15. Information on FSM citizens serving in the U.S. armed forces was  included in the draft provided to the FSM for comment (see app. II,  p. 31). 16. This report recognizes that absences and abstentions are an issue for  all the coincidence numbers reported in the Department of State report  in p. 23, footnote 25. Our methodology, which accounts for these  absences and abstentions, was described as fair and valid by a former  Department of State official who prepared the U.N. voting report for  the past 12 years. We also compare the FSM favorably with U.N.  support received from NATO on p. 23 (see also app. III, pp. 47-48). Our  analysis of NATO voting on pp. 47, 48, and 50 applies the same  methodology that we used to calculate the voting coincidences of the  FSM and the RMI. Finally, we discuss FSM support on issues identified  as important by the Department of State on pp 46-47. However, we note  that lopsided vote margins in the U.N. General Assembly means this  support is largely symbolic.
section_title: Comments from the Government of the Republic of the Marshall Islands
subsections: section_title: GAO Comments
paragraphs: The following are GAO’s comments on the letter from the government of  the RMI dated November 19, 2001. 1. This report mentions two incidents where the defense veto, though not  formally invoked, may have had some relevance. On p. 13 in footnote  14, we note that the RMI government once considered a plan to store  third country nuclear waste in the RMI. The threat of the United States  possibly invoking the defense veto, along with a change in RMI  government leadership, may have been responsible for the RMI  government’s final decision against providing storage. Furthermore, on  p. 13 we noted initial U.S. government objections to a 2001 RMI port  call by Taiwanese ships. While the U.S. government never mentioned  the Compact’s defense veto provision during this incident, the RMI did  cite the provision as not being appropriate in this particular instance.  Finally, our objective was to determine which of the key provisions had  been formally invoked, and both DOD and the Department of State  have told us the defense veto remains unused. This report also does not  attempt to assign value to the defense veto provision based on its lack  of usage. 2. This report chose not to speculate on the role strategic denial may have  played in deterring third country militaries from seeking to use the RMI,  because data are not available to determine whether there are any third  countries that would have had an interest in engaging in activities in the  RMI in the absence of this right. We maintain that the evidence shows  that the scope and effect of strategic denial have been overstated in  public statements by officials from the United States, the FSM, and the  RMI (see p. 18). 3. This report does not conclude that hostile actors or foreign powers will  never again attempt to transit RMI waters or develop a presence in the  RMI. Rather we note on p. 13 in footnote 13 that portions of a 1999 DOD  assessment, provided to the RMI, stated that no outside threat to the  FSM and the RMI is likely to emerge over the next 10 to 20 years, and  there are no compelling security interests on the part of any Asian  countries that would manifest themselves in any threat to the FSM and  the RMI. This assessment also stated that no Asian country will have  the military reach to pose a credible threat or domineering presence in  the foreseeable future. 4. This report does acknowledge the importance of nuclear and missile  defense testing in the U.S.-RMI relationship. Appendix III discusses U.S.  activities in the Marshall Islands over the past 50 years. This report also  notes that Kwajalein Atoll is cited by DOD as an “important and unique  national asset that would be difficult and expensive to replace,” thus  giving prominence to the RMI location where missile and missile  defense testing occurs (see pp. 3 and 14).
Reviewing U.S. nuclear testing activities in the Marshall Islands was  outside the scope of our review, though the issue is mentioned in  appendix III. For a discussion of the amount the United States has  spent to address nuclear testing-related issues in the Marshall Islands,  see our report Foreign Relations: Better Accountability Needed Over  U.S. Assistance to Micronesia and the Marshall Islands  (GAO/RCED-00-67, May 31, 2000). 5. This report states that the negotiation of expiring defense and  economic Compact provisions provides the United States with the  opportunity to reexamine its defense and security interests in the RMI  and the FSM. We believe that this is a reasonable and prudent course of  action and one that in no way suggests that the United States should  unilaterally choose to end or alter commitments that require mutual  termination by all parties involved. Of note, in a 1996 testimony, a  Department of State official stated that while U.S. defense  arrangements with the Freely Associated States (FAS) – the FSM, the  RMI, and Palau — have contributed measurably to the security of the  United States and the FAS, it is necessary to review the entire range of  Compact security provisions in light of new global conditions and  stringent fiscal realities as we near the end of the Compact period. 6. The U.S. obligation to defend the RMI and the FSM is mentioned in this  report on p. 7 in order to demonstrate the unique relationship between  the United States and the two Pacific Island nations, and is never  referred to as a burden. This report also states on p. 8 that strategic  denial, the defense veto, and access to RMI land are key provisions of  the Compact that provide rights to the U.S. government. 7. We agree that the factors discussed by the RMI government over the  next three pages—the relationship that developed between the United  States and the RMI as a result of U.S. administration of the Marshall  Islands under the U.N. trust, and U.S. nuclear testing during the 1940s  and 1950s—played a key role in establishing an important framework  for Compact negotiations. However, we maintain, after carefully  reviewing the Compact’s legislative history, that the Compact’s specific  security and defense provisions reflected Cold War concerns that  existed at the time of the negotiations. We also note that the RMI  government did not disagree when we cited three goals of the Compact  in a September 2000 report that are also listed in this report: (1) securing self-government for the RMI and the FSM, (2) assuring  certain national security rights for the RMI, the FSM, and the United  States; and (3) assisting the RMI and the FSM in their efforts to advance  economic self-sufficiency. Our earlier report also noted U.S. concerns  about an expanded Soviet Union military presence in the Pacific at the  time of Compact negotiations. In addition, a 1999 DOD assessment  points out that the Compact was negotiated during the Cold War era in  a vastly different politico-military and security environment, and a State  Department official testified at a 2000 congressional hearing that the  Compact was negotiated and enacted during the Cold War, when the  Soviet Union had a growing presence in the Pacific. 8. Pages 1 and 6 of this report state that the Compact consists of two  separate international agreements, one between the United States and  the RMI, the other between the United States and the FSM. 9. We have revised footnote 5 on p. 6 of the report to show direct Compact  funding provided to the RMI and the FSM separately for fiscal years  1986 through 1998. Further, on p. 2, footnote 1 and p. 6, footnote 5, we  have separated total estimated Compact assistance (direct funding as  well as U.S. programs and federal services) for the RMI from the total  estimated assistance provided to the FSM.
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Ron Schwenn, Mary Moutsos, Mark  Speight, and Rona H. Mendelsohn made key contributions to this report.
section_title: Related GAO Products
paragraphs: Compact of Free Association: Negotiations Should Address Aid  Effectiveness and Accountability and Migrants’ Impact on U.S. Areas  (GAO-02-270T, Dec. 6, 2001).
Foreign Relations: Migration From Micronesian Nations Has Had  Significant Impact on Guam, Hawaii, and the Commonwealth of the  Northern Mariana Islands (GAO-02-40, Oct. 5, 2001).
Foreign Assistance: Lessons Learned From Donors’ Experiences in the  Pacific Region (GAO-01-808, Aug. 17, 2001).
Foreign Assistance: U.S. Funds to Two Micronesian Nations Had Little  Impact on Economic Development (GAO/NSIAD-00-216, Sept. 21, 2000).
Foreign Assistance: U.S. Funds to Two Micronesian Nations Had Little  Impact on Economic Development and Accountability Over Funds Was  Limited (GAO/T-NSIAD/RCED-00-227, June 28, 2000).
Foreign Relations: Better Accountability Needed Over U.S. Assistance to  Micronesia and the Marshall Islands (GAO/RCED-00-67, May 31, 2000).
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