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The USS Barry in the South Pacific in 2017. Palau, the Marshall Islands and Micronesia are part of the Compact of Free Association, which gives the US military exclusive access to their airspace and territorial waters. Photo: Bloomberg

US-China battle for influence prompts Donald Trump to welcome leaders of South Pacific island nations to the White House

  • The presidents of Palau, the Marshall Islands and Micronesia made a historic visit as the US tries to shore up its power base in the Indo-Pacific
  • Experts say China’s growing economic ties with those states have Washington worried that Beijing might eventually displace it as the major power in the region
US President Donald Trump for the first time hosted the leaders of three Pacific island nations at the White House on Tuesday, as part of Washington’s diplomatic push to counter China’s bid for influence in the region.
The brief but symbolic meeting demonstrated US support at a time when Washington is pushing back against expanding Chinese influence in the Pacific.
This was Trump’s first meeting with President Tommy Remengesau of Palau, President Hilda Heine of the Marshall Islands and newly elected President David Panuelo of the Federated States of Micronesia. Their nations are part of the Compact of Free Association, which gives the US military exclusive access to their airspace and territorial waters in exchange for financial assistance.

After, the leaders issued a joint statement to “jointly reaffirm our interest in a free, open, and prosperous Indo-Pacific region”.

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“It is in our mutual interest that the Pacific Ocean remains an important and vibrant corridor for maritime trade,” the statement said in a possible reference to the established US position that China has violated the jurisdiction of countries in the region through its naval and commercial maritime activities.

In addition to the president, the leaders also met heads of the defence and state departments. During the leaders’ meeting with Acting Secretary of Defence Patrick Shanahan, Marshall Islands President Heine said the freely associated states are “threatened by the use of Beijing’s economic leverage”.

“We deal with illegal ship entries, supposedly for fishing, and [proposals in Beijing] for a special administrative district with autonomy from our government and promising to build a port,” she said.

A senior White House official said: “President Trump has been directing an unprecedented level of focus on the Pacific Islands, in recognition of the fact that the United States is a Pacific nation, with immutable strategic, economic, cultural and people-to-people links in the islands.”

Jian Zhang, director of China engagement at UNSW Canberra at the Australian Defence Force Academy (ADFA), said that China’s growing economic ties with states under the compact had Washington worried that Beijing might eventually displace it as the major power in the region.

“The meeting today is more than ceremonial,” Zhang said. “President Trump wants to send a message that the US will continue to maintain its position in the region, making a commitment to provide continued economic assistance and maintain the defence facilities the US has on those islands.”

The meeting also comes at a critical moment in the relationship between the South Pacific states and the US, with the Compact of Free Association set for renewal in 2023.

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“Yes the meeting is about countering China’s growing influence, but there is also a strong legal element to this – the matter of renegotiating the arrangements,” said Patrick Gerard Buchan, a fellow at Washington-based think tank Centre for Strategic and International Studies.

Though the compact allows for citizens of Palau, the Marshall Islands and Micronesia to work, travel and study in the US, their leaders have pressed the US for more financial support – not just education and public infrastructure, but more private investment. The latter, in recent years, has instead come increasingly from China.

In a show of diplomatic interest in the region, Washington has in recent months sent a flurry of high-level diplomats to the region, including assistant secretary of defence Randy Schriver and Patrick Murphy, the State Department’s principal deputy assistant secretary for East Asian and Pacific affairs.

President Hilda Heine of the Marshall Islands. Photo: AFP

Reports last year of Chinese interest in developing military outposts in the Indo-Pacific – though denied by China – could pose a threat to US interests, according to a January report by the US-China Economic and Security Review Commission (USCESRC), which provides recommendations to Congress.

“As China increases its economic engagement, Pacific Island countries may feel more beholden to Beijing and side with it in international forums,” the report said.

The US Congress last fall passed the Build Act – widely seen as a counterpoint to President Xi Jinping’s ambitious Belt and Road infrastructure investment plan – with rare bipartisan enthusiasm.

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The act restructured US aid and development organisations under the umbrella of the newly created US International Development Finance Corporation. The agency is set to launch this October, and senior US officials on Tuesday said there were already plans to invest in the South Pacific.

China’s trade with Pacific Island nations reached US$8.2 billion in 2017, according to the USCESRC – nearly five times that of their trade with the US, at just US$1.6 billion, and nearly twice the level of trade in 2015.

Beijing has also conducted extensive scientific research on the seabed in the region, including placing acoustic surveillance sensors on the seabed near the island of Yap in Micronesia.

Palau President Tommy Remengesau. Photo: Handout

Geography is an important part of China’s interest in the island nations, according to Zhang from the Australian Defence Force Academy. Crucial to Beijing’s defence strategy is the ability to freely navigate its navy, including submarines, among the multiple island chains surrounding China’s coast. The first chain includes Japan, Taiwan and the Philippines, while the second includes the Mariana Islands – a US territory – as well as Palau and Micronesia.

Though the states under the compact may argue for more financial support as well as aid to combat the effects of climate change, the alliance will not break apart, said Buchan from the Centre for Strategic and International Studies.

“It would be a huge step for any nation to separate from the compact after decades alongside the US – there is no real political, economic or social reason for them to do that,” he said.

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The leaders of states under the compact are also on the front lines of the fight against climate change, facing rising sea levels and coastal erosion as well as annual weather-driven natural disasters. They have been vocal advocates for international climate change adaptation efforts at the United Nations, where they carry the same voting power as the world’s largest economies.

While experts say the US could offer tax incentives to stimulate American private-sector investment in the region, this may not be enough to counter China’s long-term interest.

“At this stage, China wants to develop growing ties, especially economic and political ties, and over time those will be very useful in achieving its strategic agenda,” said Zhang from the ADFA.

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