The two sides initialled a new Compact of Free Association agreement (COFA) in Palau after the US reached a similar agreement with Micronesia on Monday.
“It’s a historic day!!” the office of Palau president Surangel Whipps Jr posted on its Facebook page. “God bless Palau! God bless the United States of America! God bless us all!”
US presidential envoy Joseph Yun told a ceremony the pact with Palau would be formally signed next week in Papua New Guinea. He told Reuters this week a renewed COFA with Micronesia would also be signed on Monday in Port Moresby.
Biden was due to attend that ceremony, but on Tuesday he called off what was to have been a brief stopover in Papua New Guinea due to the US debt ceiling crisis.
Analysts said calling off the stop was a blow to US credibility in the Pacific island region, which has long felt neglected by Washington.
Yun told Reuters on Monday he expected to be in the Marshall Islands from Thursday until Sunday, but was “doubtful” its COFA agreement could be finalised at the moment.
Washington first reached COFA accords with the three island states in the 1980s, under which it retains responsibility for their defence and provides economic assistance while gaining exclusive access to huge strategic swathes of the Pacific in return.
Renewing them has become a key part of US efforts to push back against China’s bid to expand its influence in the Pacific. Chinese diplomats have been courting the region and China’s construction and mining companies have expanded their business in many of the island nations.
The Marshall Islands COFA is due to expire this year. Yun give no reason for the hold-up in renewing that, but a parliamentary election is expected there in November.
He said last month “topline” agreements would provide the three COFA states with a total of about US$6.5 billion over 20 years.
Last year, more than 100 arms-control, environmental and other activist groups urged the Biden administration to formally apologise to the Marshall Islands for the impact of massive US nuclear testing there and to provide fair compensation.
Marshall Islanders are still plagued by health and environmental effects of the 67 US nuclear bomb tests from 1946 to 1958, which included “Castle Bravo” at Bikini Atoll in 1954 – the largest US bomb ever detonated.