More information about Micronesia is available on the Micronesia country page and from other Department of State publications and other sources listed at the end of this fact sheet.
U.S.- FEDERATED STATES OF MICRONESIA (FSM) RELATIONS
Following World War II, the islands of what is now the Federated States of Micronesia (FSM) became part of the United Nations strategic trust territory, Trust Territory of the Pacific Islands under the administrative control of the United States. The FSM became independent in 1986, with the entry into force of the Compact of Free Association with the United States that included 15 years of substantial development aid. An Amended Compact entered into force in 2004 containing an additional 20 years of financial assistance, but the relationship of free association continues indefinitely.
The FSM is a sovereign nation. The United States and the FSM have full diplomatic relations and maintain deep ties and a cooperative relationship. While the government is free to conduct its own foreign relations, it does so under the terms of the amended Compact. Under the amended Compact, the United States has full authority and responsibility for the defense and security of the FSM. Eligible FSM citizens are allowed to live, work, and study in the United States without visas. FSM citizens volunteer to serve in the U.S. Armed Forces at per capita rates higher than most U.S. states
U.S. Assistance to the Federated States of Micronesia
Pursuant to the amended Compact, the U.S. Government provides economic and program assistance. The United States provides over $110 million in assistance every year, along with a variety of federal grants and services, until FY2023, including progressive dedication of a portion of the annual assistance to a jointly managed trust fund. The assistance provisions are aimed to assist the FSM on its path to economic advancement self-sufficiency post 2023. The governments of the United States and the FSM established a Joint Economic Management Committee (JEMCO), consisting of representatives of both nations, which is responsible for ensuring that assistance funds are focused effectively and properly accounted for, with the aim of fostering good governance and economic self-reliance. Grant assistance under the amended Compact focuses on six sectors: education, health, infrastructure, public sector capacity building, private sector development, and the environment. The JEMCO identified an additional sector for U.S. grant assistance: enhanced reporting and accountability. Amended Compact grants are primarily funded through and administered by the Department of the Interior.
Reflecting the strong legacy of trusteeship cooperation, many U.S. federal agencies operate programs in the FSM. These include the Federal Aviation Administration, U.S. Postal Service, Small Business Administration, U.S. Agency for International Development, Department of Energy, Department of Agriculture, Department of Health and Human Services, Department of Education, Department of State, and the Department of the Interior.
The FSM is highly vulnerable to natural disasters and the potential effects of climate change. U.S. assistance also focuses on strengthening FSM’s climate resilience through disaster management.
Bilateral Economic Relations
The FSM’s national government plays a central role in the economy as the recipient and distributor of amended Compact funds to the states. Subsistence farming occupies half of the adult population. Of the adults working in the cash economy, more than half are employed in the public sector, earning 58% of total national wages. Unemployment is 16%. The United States is FSM’s largest trade partner. Total exports were only 24% of imports in 2016, with the trade deficit roughly equal to all of the aid provided by the U.S., China, Japan and Australia. Almost 8,000 U.S. citizens visited FSM in 2016.
FSM’s Membership in International and Regional Organizations
The FSM and the United States belong to a number of the same international organizations, including the United Nations, Asian Development Bank, International Monetary Fund, and World Bank. The Federated States of Micronesia was admitted to the United Nations on September 17, 1991. Outside the region, FSM is a member or participant of the ACP (Cotonou Agreement), the Alliance of Small Island States, the Economic and Social Commission for Asia and the Pacific (ESCAP), the Food and Agriculture Organization (FAO), the G-77, the International Bank for Reconstruction and Development, the International Civil Aviation Organization, the International Red Cross and Red Crescent Movement, the International Development Association, the International Finance Corporation, the International Olympic Committee, the ITU, the NAM and the World Meteorological Organization.
FSM is a full member of the Pacific Islands Forum, the Pacific Regional Environment Programme (SPREP), and the Pacific Community (SPC). The FSM also is a member of the Western and Central Pacific Fisheries Commission (WCPFC), the headquarters of which are located in the FSM. In addition, the FSM is one of the eight signatories of the Nauru Agreement Concerning Cooperation in the Management of Fisheries of Common Interest that collectively controls 25-30% of the world’s tuna supply and approximately 60% of the western and central Pacific tuna supply.
Principal embassy officials are listed in the Department’s Key Officers List.