OceaniaPartnerships

Allies and Partners boost deterrence, resilience in Palau

FORUM Staff

Palau’s renewed Compact of Free Association with the United States in 2024 secured $890 million in economic assistance for the Blue Pacific nation, which has seen its tourism industry shrink due to economic coercion by the People’s Republic of China (PRC).

Equally important, the renewal reinforced the agreement on the joint use of ports, airfields and other sites in Palau where the U.S. can station troops and conduct military exercises. Recently reelected President Surangel Whipps Jr. has said his country’s relationship with the U.S. and the deterrence it communicates are increasingly significant.

The PRC drew condemnation with its efforts to weaponize tourism by warning travelers not to visit Palau after the Blue Pacific nation refused to sever formal relations with Taiwan. Beijing claims Taiwan as its territory and threatens to annex the democratically governed island by force as it attempts to diplomatically isolate Taipei. The PRC was also blamed for a major cyberattack in early 2024 that stole documents from Palau’s government.

Meanwhile, Chinese Communist Party (CCP)-linked research ships have periodically operated without notice inside Palau’s exclusive economic zone (EEZ). After one intrusion, the PRC announced its own names for two underwater mountains that already had Palauan names, according to The Telegraph newspaper.

Palau is monitoring the PRC’s coercion in the nearby Philippines and suspects Beijing could also try to illegally claim Palauan territory, Whipps told the newspaper.

China Coast Guard vessels, and the CCP’s maritime militia and research ships routinely intimidate fishing crews, interfere with oil and gas exploration, and harass military operations in other nations’ EEZs. The PRC claims almost all of the South China Sea, defying a 2016 international tribunal that invalidated the vast territorial assertions.

Whipps also cites the CCP’s threats toward Taiwan. Such intimidation “makes us think about how we can best secure our sovereignty,” he said, as well as security across the Blue Pacific.

Palau’s alliance with the U.S. is a strategic partnership, Whipps added. “We understand our location and the importance of maintaining a Free and Open Indo-Pacific and having joint-use facilities and operations here is an important part of ensuring peace and stability in our region,” he said.

In addition to bolstering regional deterrence, Palau and the U.S. have:

  • Formalized an agreement under which U.S. Coast Guard ships can enforce Palau’s regulations within its EEZ. The plan combats illegal fishing, drug trafficking and other illicit activities.
  • Conducted intensive training for Palauan law enforcement personnel, facilitated by the U.S. Indo-Pacific Command’s Joint Interagency Task Force, on combating the rise of methamphetamine smuggling in the region.
  • Participated in a capacity-building program to provide Palau with a canine unit and military-grade facilities to strengthen drug detection and border security.
  • Collaborated with the Pacific Islands Chiefs of Police on training to counter illicit maritime activity.

Analysts say Palau will likely increase U.S. engagement, Voice of America (VOA) news reported. “There’s going to be a much stronger U.S. presence in terms of military visits, joint actions to combat transnational crime and illegal fishing, and boost transport and digital connectivity,” Meg Keen, a senior fellow at the Lowy Institute in Australia, told VOA.

In response to the PRC’s coercion, Palau also has reinforced ties with partners such as Australia, Japan and Taiwan, which have contributed to tourism. In May 2024, a nonstop airline route opened between Brisbane, Australia, and Palau.

Japan also committed to building a high-speed telecommunications network for health care providers, the Nikkei Asia news magazine reported.

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