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Britannica Sources used in this answer

How did free association with the United States work for Palau, the Marshall Islands, and the Federated States of Micronesia?

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Map of the Pacific Islands region showing political boundaries, major island groups, and countries such as Papua New Guinea, Fiji, Samoa, French Polynesia, and Kiribati. The map uses color shading to indicate elevation and ocean depth, with key islands and capitals labeled throughout the central and southwestern Pacific Ocean.
Pacific Islands

Free association is a political arrangement established through the Compact of Free Association between the United States and the republics of Palau, the Marshall Islands, and the Federated States of Micronesia.12

Under this framework, these nations transitioned from being part of the Trust Territory of the Pacific Islands to becoming sovereign, self-governing states. The specific terms of the relationship function as follows:1

  • Internal Governance: Each republic maintains full authority over its internal affairs and self-government.12
  • Foreign Affairs: The republics possess substantial authority to conduct their own foreign relations.1
  • Defense and Security: The United States retains full responsibility and authority for the defense and external security of these nations.12
  • Financial Support: The agreement includes provisions for the United States to provide financial assistance to the associated states.2

The Federated States of Micronesia and the Marshall Islands entered this status in 1986, while Palau followed in 1994. These compacts allow for the alteration of the relationship or the pursuit of full independence, provided such changes are approved through popular referenda.12