TAIPEI (Taiwan News) — The U.S. on Saturday (March 9) passed a spending package meant to bolster ties with key South Pacific countries, including two diplomatic allies of Taiwan, amid increasing attempts by China to gain leverage over these nations.

On Friday (March 8), just hours before the expiration of existing funding, the U.S. Senate approved multiple government spending bills in a 75 to 22 vote, preventing a partial government shutdown, reported CNA. The bills include US$7.1 billion (NT$223.3 billion) in funding for renewed Compacts of Free Association (COFA), treaties between the U.S., Palau, Micronesia, and the Marshall Islands that can be used as a counterbalance to China. Of these countries, the Marshall Islands and Palau are two of the few remaining diplomatic allies of Taiwan.

COFA traces back to the 1980s. Last September, for the third time, the agreement was renewed and extended for 20 years.

According to the terms of the agreement, the U.S. retains responsibility for the defense of these three nations and exclusive access to the vast Pacific region, in addition to providing economic assistance. With growing concerns about Beijing's coercive influence in the Indo-Pacific region and the strategic significance of these three island nations in the South Pacific, President Joe Biden pledged last year to provide US$7.1 billion in economic assistance to these countries over 20 years.

In recent months, Congress has been under continued pressure to approve the funding. On Feb. 15, a letter written by Palau President Surangel S. Whipps Jr. to a U.S. senator surfaced in which Whipps warned that China has already offered to "fill every hotel room" in the country's tourism-reliant economy "and more if more are built." He added that US$20 million in aid per year is also being offered in exchange for a two-acre "call center."

A bipartisan letter signed by 48 Congress members to House Speaker Mike Johnson on Feb. 21 said, "Failing to ratify these agreements negotiated in good faith would be the most self-destructive gift the United States could give to the PRC in the Pacific, damaging U.S. credibility and deterrent capability in the FAS and the larger community of Pacific Island nations." The letter also mentioned that Micronesia, Palau, and the Marshall Islands ensure that the U.S. maintains strategic control of the Pacific between Hawaii and the Philippines.

In a March 4 press release, Representative Bruce Westerman backed the funding by saying, "America is committed to supporting our allies in the Indo-Pacific and combating the threat of the Chinese Communist Party." He added, "The threat of the Chinese Communist Party continues to loom large in the Indo-Pacific, and it only underscores the importance of passing my Compacts of Free Association Amendments Act to give our allies critical resources and support to deter Chinese Communist Party's influence and continue working closely with the United States."

The aid bill also calls for the establishment of a U.S. interagency group to guide for implementation of COFA. In addition, the U.S. State Department's Bureau of East Asian and Pacific Affairs will create a new unit to oversee U.S. relations with these three countries.

The combined population of Micronesia, Palau, and the Marshall Islands is less than 200,000, with citizens having the right to reside and work in the U.S. According to Westerman's office, residents of these three countries also serve in the U.S. military, and their enlistment rates often exceed those of many U.S. states.

Senator Brian Schatz, a member of the Senate Foreign Relations Committee representing Hawaii, said through a press release, "Renewing COFA is a critical step, both for strengthening U.S. national security and promoting democracy and good governance in the Indo-Pacific."

Initially, there were expectations that Congress would approve funding in October, but it stalled due to a partisan deadlock. Scholars from the Center for Strategic and International Studies (CSIS), Charles Edel and Kathryn Paik, in an article published on March 5 said that the prolonged delay in funding for COFA is "signaling to friends and foes alike U.S. hesitancy to match action to rhetoric."

They added that while competition with Beijing "can sometimes take on an abstract quality. COFA offers Washington not just a concrete opportunity—it provides a test and one the United States cannot fail."

The U.S. House passed its version of the bill on March 6 and Biden signed the finalized legislation into law on March 9.