Palau President Surangel Whipps Jr briefed Palau’s leadership this week on the successful passage of the Compact Review Agreement through the United States Congress.

This development marks a significant milestone in bilateral relations between the two nations and represents a notable achievement for his administration.

“Two things, the Compact Agreement funding was double that of the first offer and it passed a year ahead of its expiration date,” said Minister Kaleb Udui, Chief Negotiator for the Compact Review 2024.

After encountering two unsuccessful attempts to attach the agreement to other bills, President Whipps expressed relief at its passage.

He highlighted the arduous journey to secure approval from the U.S Congress and credited the achievement to the strong relationships fostered with high-level officials in various U.S government agencies and Congress.

Recognising the pivotal role played by the Palau Negotiating Team, led by Chief Negotiator Minister Kaleb Udui Jr, and the Palau Economic Advisory Group, Whipps emphasized the collective effort that led to the agreement’s success.

The Compact Review Agreement, adopted with overwhelming support from both houses of the U.S Congress, presents numerous benefits for Palau. It doubles the initial amount offered, totaling US$889 million over 20 years, with a 2 percent yearly inflation adjustment and no financial cliff at the end of the term. The yearly allocation includes US$10 million for debt repayment, US$5 million for infrastructure development, US$5 million for maintenance, and US$20 million for operational costs.

In addition to financial provisions, negotiations are ongoing to determine Palau’s eligibility for various U.S federal programmes, including access to benefits such as food stamps, women and infant subsidies, and income supplements for Palauans living in the United States. The continuation of the PELL Grant programme and inclusion of the Post Office in the agreement further solidified Palau’s integration into U.S federal services.

Other benefits include the extension of Veteran services to veterans in Palau, continuation of the Head Start Programme, and eligibility for Palauan students to receive in-state tuition rates in the U.S.

President Whipps underscored the challenges faced during negotiations, particularly addressing US leaders’ perceptions of Palau. The strategic approach involved conveying Palau’s needs while emphasising the mutual benefits of the agreement.

“The successful passage of the Compact Review Agreement ensures that children’s future is protected, with fewer loans and better economic prospects,” said Whipps.

Palau will be signing and exchanging diplomatic notes with the United States next week, allowing for quicker drawdown of funds.