Following World War II, in 1947 under UN auspices as part of the Trust Territory of the Pacific Islands, the U.S. assumed administration of Palau. In 1982, Palau signed a Compact of Free Association with the U.S. Palau gained its independence and established diplomatic relations with the U.S. in 1994, with the entry into force of the Compact, under which the U.S. remains responsible for Palau's defense for 50 years. Palau is a sovereign nation and conducts its own foreign relations. The U.S. and Palau cooperate on a broad range of issues, including strengthening regional security, promoting sustainable development and addressing climate change, and protecting fisheries and the environment. Approximately 500 Palauans serve as volunteers in the U.S. armed forces, and Palau also has one of the highest levels of voting coincidence with the U.S. at the United Nations.
U.S. Assistance to Palau
The U.S. and Palau signed a comprehensive review of the Compact in 2010, with a wide range of federal programs to continue for the next 15 years. By the end of 2011, the value of a trust fund set up under the Compact was approximately $147 million.
Bilateral Economic Relations
The Compact Review has identified U.S./Palauan cooperative efforts to promote trade and investment in Palau which will complement current initiatives to expand and develop a healthy economic partnership.