Thus as part of the move towards independence the US began negotiations with individual 
states to create Compacts of Free Association between each state and the United States '??. 
The premise was clear for each side. For the United States they would gain control of the 
Defence of the three states and have the ability to build bases and conduct military activities. 
For the Compact states they gained protection from the United States in the event of a threat 
and a package of economic support to offset the loss of control of a sphere of their sovereignty. 
The military provisions also allowed citizens of the Compact States to participate in the defence 
of their countries by joining the United States armed forces'®. The precise terms of each 
Compact are slightly different and they took a number of years to negotiate as both parties 
sought to maximize unilateral benefit. 
One key component of the Compacts of Free Association was the retention of full sovereignty 
by the three Compact States. In other arrangements states have ceded elements of 
sovereignty in return for financial or physical security, such as the Cook Islands arrangements 
with New Zealand''? or the arrangements in place between Britain and many of its overseas 
territories like the Cayman Islands, Bermuda or Gibraltar’. This had meant that these 
territories have degrees of autonomy but are not independent in a sovereign sense. In contrast, 
the Compact states are all UN members and engage in their own foreign policies including 
sending and receiving Ambassadors. By contrast the Cook Islands, Bermuda, Cayman Islands 
and Gibraltar are all members of the Commonwealth, all use their own currency and all have 
their own police forces, courts and elected assemblies, but they are not members of the UN 
and are not considered sovereign in international law. 
The effect of these Compacts on the defence and security of the three states has been to have 
the military protection of the world’s only superpower. Thus, for existential military threats, the 
Compact States sit under the most secure umbrella on earth. In addition as the citizens of all 
three states are permitted to serve in the US military they can actively participate in the force 
that provides that security. This is something that the citizens of all three states have done in 
great numbers with all three states having higher recruitment rates for the US military than any 
actual state of the United States. This has come at cost too where the casualty rate amongst 
FSM, RMI and Paluan populations during the wars in Afghanistan and Iraq was higher than 
  
'% Compacts of Free Association http://uscompact.org/about/cofa.php 
'% Donald R. Shuster, The Republic of Palau and its Compact, 1995-2009, The Journal of 
Pacific History, Volume 44:3, 2009, 329-330. 
19 Cook Islands Relationship with New Zealand http://Www.ck/govt.htm#nz 
"1! Foreign and Commonwealth Office (UK), The Overseas Territories: Security, Success 
and Sustainability, (London: The Stationary Office, 2012), 8-9.