308. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon, Washington, July 8, 1974.1 2



July 8, 1974

SUBJECT: Micronesian Status Negotiations

At Tab B is the report of Ambassador F. Haydn Williams, your Personal Representative for Micronesian Status Negotiations, covering his April round of negotiations with representatives of the five districts of Micronesia. As you recall, he is conducting separate negotiations with representatives of the sixth district, the Marianas.

Ambassador Williams also recommends further amendments to his negotiating instructions.

As you know, Williams earlier had achieved agreement giving the U.S. control of foreign affairs and defense and the Micronesians control over internal government. He reports that he has now reached agreement on the two remaining issues — unilateral termination of the Compact of Free Association and U.S. financial assistance. However, he was able to get agreement on these two issues only by going beyond his current instructions in minor respects on an ad referendum basis, and he therefore is asking your approval of these undertakings.

  • —Unilateral termination. The Micronesians objected to our proposal that the Compact contain pre-negotiated arrangements providing for denial (of Micronesia to third countries for military purposes) and U.S. military basing rights that would survive any termination of the Free Association relationship by 50 years. Instead, Williams subsequently achieved an agreement under which the Compact would be terminated only by mutual consent during first 15 years after the Compact goes into force. Thereafter, the Compact would be terminated unilaterally by either side, but notification to terminate would be followed by a two-year waiting period during which both parties would have to reach agreement on a mutual security agreement covering our continued use of military bases and facilities in the islands. The concerned departments and agencies (Tabs C and D) agree with Williams’ recommendations, and I have no objection.
  • — U.S. Financial Assistance. Williams also achieved agreement on levels of U.S. financial assistance:

For the first 15 years after the Compact goes into force, the annual level would start at $55 million and decrease to $42 million (which is below the $60 million level you authorized).

[Page 2]

As regards the period following the first 15 years, the Micronesians, refusing our proposal that this be left to later negotiations, finally agreed that, if agreement on follow-on levels were not readily achieved in later negotiations, U.S. financial assistance would continue on a scale that would decrease at the same rate as during the first 15 years.

As regards the transition period before the Compact goes into farce, the Micronesians agreed to a Capital Improvements Program (CIP) ranging from $20 million in FY 75 to $35 million in FY 78 and back down to $15 million in FY 80.

Williams recommends that he be authorized to proceed with the above tentative agreements. The concerned departments and agencies agree, with the exception of OMB, which does not want Williams to commit us firmly to levels of CIP during the transition period. Rather, OMB would have the concerned agencies review these figures annually in the course of budget preparation, and reallocate some of the CIP funds to current government operating expenses in Micronesia if they believed necessary. Ambassador Williams objects strongly. He contends that priority must go to leaving Micronesia with an adequate structure by the time we end the trusteeship; he also has obtained Micronesian agreement to gradually declining U.S. support for government operating expenses in Micronesia. I agree with Williams, and also support his recommendations above on other aspects of U.S. financial assistance.

Issue of the Plebiscite and Constitutional Convention

Williams also reached agreement with Micronesian representatives on a tentative schedule for bringing the Compact into force over a six-year period. The departments agree with this schedule, except that they recommend that a major effort be made to hold the plebiscite before, rather than after, the Micronesian Constitutional Convention. They believe that the results of the plebiscite would constrain the possible proclivity of some Micronesian leaders to try to re-open certain provisions of the Compact in the course of drafting a Constitution.

Williams disagrees. He contends that Micronesian leaders strongly want to place both the draft constitution and Compact before the populace in the plebiscite, and that there will not be sufficient time to hold a plebiscite before the Constitutional Convention, scheduled for next April. I support Williams. I would also note that we have adequate leverage in terms of our contemplated financial assistance to contain possible Micronesian back-tracking on the draft Compact.

At Tab A is a draft instruction, in your name, from me to Ambassador Williams embodying my recommendations above.

That you authorize me to me to sign the draft instruction to Ambassador Williams at Tab A.
Approve [RN initialed]

  1. Source: Ford Library, National Security Adviser, NSC East Asian and Pacific Affairs Staff: Files, (1969) 1973–1977, Box 36, Marianas (Working Files) [6]. Secret. Sent for action. Scowcoft initialed the memorandum on behalf of Kissinger. The President initialed his approval of the recommendation. Tab A, a memorandum, July 10, from Kissinger to William, is not attached but is in the National Archives, Nixon Presidential Materials, NSC Institutional Files (H-Files), Box H–281, Folder 6, U/N 90–149. Tab B, an April 12 letter from Williams to the President, is attached but not published. Tabs C and D, recommendations from concerned departments and agencies, are not further identified, but these recommendations are described in an attached memorandum, May 24, from Rush to the President, which stated that the Departments of State, Defense, Justice, Interior, the Joint Chiefs of Staff, and the Office of Micronesian Status Negotiations endorsed Williams’s recommendations.
  2. Kissinger reported on the Micronesian status negotiations and recommended that Nixon authorize draft instructions for Williams.