[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


        PEACE THROUGH STRENGTH: THE STRATEGIC IMPORTANCE OF THE
              PACIFIC ISLANDS TO U.S.-LED GLOBAL SECURITY

=======================================================================

                        OVERSIGHT FIELD HEARING

                               BEFORE THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

              Thursday, August 24, 2023, in Tamuning, Guam
                               __________

                           Serial No. 118-57
                               __________

       Printed for the use of the Committee on Natural Resources
       

                   [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]      
       
       
        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
          
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-236 PDF                 WASHINGTON : 2023             
          
                     COMMITTEE ON NATURAL RESOURCES

                     BRUCE WESTERMAN, AR, Chairman
                    DOUG LAMBORN, CO, Vice Chairman
                  RAUL M. GRIJALVA, AZ, Ranking Member

Doug Lamborn, CO		Grace F. Napolitano, CA
Robert J. Wittman, VA		Gregorio Kilili Camacho Sablan, CNMI
Tom McClintock, CA		Jared Huffman, CA			  
Paul Gosar, AZ			Ruben Gallego, AZ
Garret Graves, LA		Joe Neguse, CO
Aumua Amata C. Radewagen, AS	Mike Levin, CA
Doug LaMalfa, CA		Katie Porter, CA
Daniel Webster, FL		Teresa Leger Fernandez, NM
Jenniffer Gonzalez-Colon, PR	Melanie A. Stansbury, NM
Russ Fulcher, ID		Mary Sattler Peltola, AK
Pete Stauber, MN		Alexandria Ocasio-Cortez, NY
John R. Curtis, UT		Kevin Mullin, CA
Tom Tiffany, WI			Val T. Hoyle, OR
Jerry Carl, AL			Sydney Kamlager-Dove, CA
Matt Rosendale, MT		Seth Magaziner, RI
Lauren Boebert, CO		Nydia M. Velazquez, NY
Cliff Bentz, OR			Ed Case, HI
Jen Kiggans, VA			Debbie Dingell, MI
Jim Moylan, GU			Susie Lee, NV
Wesley P. Hunt, TX
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY

                                                  
                    Vivian Moeglein, Staff Director
                      Tom Connally, Chief Counsel
                 Lora Snyder, Democratic Staff Director
                   http://naturalresources.house.gov
                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, August 24, 2023........................     1

Statement of Members:

    Westerman, Hon. Bruce, a Representative in Congress from the 
      State of Arkansas..........................................     2
    Leger Fernandez, Hon. Teresa, a Representative in Congress 
      from the State of New Mexico...............................     3

Statement of Witnesses:

    Guerrero, Hon. Lourdes ``Lou'' Leon, Governor of Guam, 
      Hagatna, Guam..............................................     5
        Prepared statement of....................................     6
        Questions submitted for the record.......................     7
    Palacios, Hon. Arnold I., Governor of the Commonwealth of 
      Northern Mariana Islands, Saipan, MP.......................     9
        Prepared statement of....................................    11
        Questions submitted for the record.......................    16
    Udui, Hon. Kaleb, Jr., Minister of Finance, Republic of 
      Palau, Koror, Palau........................................    21
        Prepared statement of....................................    22
        Questions submitted for the record.......................    24
    Cantero, Hon. Ricky, Acting Secretary, Department of Foreign 
      Affairs, Federated States of Micronesia, Pohnpei State, FM.    24
        Prepared statement of....................................    26
        Questions submitted for the record.......................    27
    Ading, Hon. Jack, Minister of Foreign Affairs and Trade, 
      Republic of the Marshall Islands, Majuro, MH...............    29
        Prepared statement of....................................    30
        Questions submitted for the record.......................    33

    Barnes, Hon. Tina, Vice Speaker, Guam Legislature, Hagatna, 
      Guam.......................................................    49
        Prepared statement of....................................    51
        Questions submitted for the record.......................    52

    Sgambelluri, Irene, World War II Survivor, Talofofo, Guam....    53
        Prepared statement of....................................    54
        Questions submitted for the record.......................    55

Additional Materials Submitted for the Record:

    Submissions for the Record by Representative Westerman

        Brigadier General Roderick R. Leon Guerrero (Retired), 
          Letter to Chairman Westerman, dated August 22, 2023....    64
        Lemanu P.S. Mauga, Governor, American Samoa, Statement 
          for the Record.........................................    67
        Western Pacific Regional Fishery Management Council, 
          ``Waning US Influence and Impacts to Major US Pacific 
          Tuna Fisheries within the Western and Central Pacific 
          Ocean (WCPO): A Call for a US Government Strategic 
          Plan''.................................................    69

    Submissions for the Record by Vice Speaker Barnes, Guam

        ``Transshipment on Guam'' by S. Luo, P. Wang, C.M. 
          Bhojwani, L. Tumaneng, and J. Ji, Jr...................    83
                                     


 
    OVERSIGHT FIELD HEARING ON PEACE THROUGH STRENGTH: THE STRATEGIC
     IMPORTANCE OF THE PACIFIC ISLANDS TO U.S.-LED GLOBAL SECURITY

                              ----------                              


                       Thursday, August 24, 2023

                     U.S. House of Representatives

                     Committee on Natural Resources

                             Tamuning, Guam

                              ----------                              

    The Committee met, pursuant to notice, at 10:03 a.m. ChST, 
at the Hilton Hotel, 202 Hilton Road Tumon Bay, Tamuning, Guam, 
Hon. Bruce Westerman [Chairman of the Committee] presiding.
    Present: Representatives Westerman, Lamborn, Radewagen, 
Tiffany, Moylan, Hageman, Leger Fernandez, Stansbury, and 
Sablan.

    The Chairman. The Committee on Natural Resources will come 
to order. I would like to welcome everyone to the Hilton Hotel 
here in the heart of Guam for this timely hearing on the 
importance of the U.S. Pacific Territories and the Freely 
Associated States to the United States' ability to counter the 
PRC's malign influence and maintain our nation's strategic 
interest in the region.
    Before we begin our official business, we will begin the 
hearing with the U.S. National Anthem sung by Master Sergeant 
Jack Larimer from Joint Region Marianas.
    Sergeant, let's all stand and we will do the National 
Anthem.
    [National Anthem sung.]
    The Chairman. Thank you, you may be seated. Thank you, 
Sergeant, for singing the national anthem, and thank you to 
everyone for being here today.
    Without objection, the Chair is authorized to declare 
recess of the Committee at any time. This Committee is meeting 
today to hear testimony on Peace Through Strength: The 
Strategic Importance of the Pacific Islands to U.S.-led Global 
Security.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and the Ranking Minority 
Member, therefore, I ask unanimous consent that all other 
Members' opening statements be made prior to the hearing record 
if they are submitted in accordance with Committee Rule 3(o). 
Without objection, so ordered.
    I also want to make everyone on the panel, the Members and 
the witnesses, aware that there is a 3-second delay, I am told, 
with the microphone, so when you push the button, give a few 
moments to let the system get queued up before you begin 
speaking.
    I will now recognize myself for an opening statement.

  STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    The Chairman. Hafa Adai and good morning. It is, again, a 
pleasure to be here. Thank you, Governor, for hosting us in 
Guam. Today, the House Committee on Natural Resources has the 
great privilege of convening this hearing on this beautiful 
island of Guam in the heart of the Pacific. I would like to 
thank the People of Guam for the hospitality that you have 
exhibited to our entire Congressional Delegation. It is truly 
an honor to be with you here today and to be joined by so many 
of my colleagues. The warm reception we have received reflects 
the beauty of this island and its people.
    I also want to thank members of Guam's local government who 
are with us, or who are taking time to be with the Delegation 
and meet with us while we are on the island.
    I would especially like to thank my friend and Congressman, 
Jim Moylan, for the invitation to visit the island and to hold 
this hearing, and most importantly, for his tireless work on 
the Committee on Natural Resources on behalf of the People of 
Guam.
    Lastly, I would like to acknowledge the bipartisan group of 
Members of Congress who have joined us for this historic 
hearing and thank each of them for being here. There are 
incredible demands on our time and our participation in the 
hearing demonstrates the importance and the critical nature of 
our discussion.
    We are here today at a pivotal point in our nation's 
history. Less than 2,000 miles away lies a threat to America 
and our allies. The Peoples' Republic of China, under the 
tyranny of the Chinese communist party, not only seeks to 
challenge American leadership, but is aggressively working to 
undermine the democratic values and institutions that we 
cherish. We are a freedom-loving people in America, and above 
all, we must never forget that it is freedom that unites us.
    It is freedom.
    And as we had some meetings earlier this morning and I 
heard folks talk about the history of Guam and the way that 
people here cherish freedom and love freedom and they have seen 
that freedom challenged in the past, that I know that it is 
truly an American thing that we, above all else, put freedom 
first, and we are willing to make sacrifices, and there have 
been many sacrifices made in the past to protect that freedom. 
And I have no doubt that if we move forward, we will take the 
necessary steps and make the necessary sacrifices so that 
people can love and enjoy freedom.
    It is important to explain that when we refer to the PRC, 
we are referring to China's ruling communist party. There is a 
distinct difference between the PRC's leadership and the many 
Chinese citizens who long for that same freedom that we as 
Americans enjoy.
    The recent PRC state-sponsored hacking campaigns in Guam 
targeted critical U.S. infrastructure systems and demonstrate 
that Guam is not only a target for Chinese aggression, but is 
also on the front lines on the fight against this threat.
    Beijing is fully aware of the strategic importance of Guam 
to the United States and it is testing boundaries by simulating 
attacks on the island. Guam's importance to our nation's 
history cannot be overstated, and it has bravely faced foreign 
threats before. The tragedy and sacrifice made by the people of 
this island in World War II is not forgotten, as Guam 
celebrated Liberation Day last month. Our fight today is 
reserved freedom across the U.S. territories and for all U.S. 
allies in the Pacific.
    Like the empire of Japan once did, the PRC aims to dominate 
the Pacific and island people. While modern threats may look 
slightly different and include political and informational 
warfare, the underlying motives of domination and aggression 
remain. The PRC continues its nefarious activities by using its 
resources to exert influence in the U.S. territories and the 
Freely Associated States.
    The United States will swiftly address and counter the 
PRC's maligned activity in the Pacific region. Congress has a 
responsibility to meet this challenge head on and to protect 
our shared American interests. It is for this very reason that 
the Members of this Congressional Delegation are here today. 
This hearing will spotlight the PRC's maligned activity in the 
U.S. territories and the Freely Associated States, and examine 
how the United States will stand united against these threats, 
both on the continental part of our country and our partners in 
the Pacific.
    Again, I want to thank the witnesses for their 
participation in this important hearing, and I look forward to 
your testimony.
    I yield back my time and I will now recognize the Acting 
Ranking Member of the Committee today, Ms. Leger Fernandez, 
from the great state of New Mexico.

STATEMENT OF THE HON. TERESA LEGER FERNANDEZ, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW MEXICO

    Ms. Leger Fernandez. Thank you so very much, Mr. Chairman. 
And I truly want to thank each of our witnesses who have come 
here today because it is the role of Congress to truly listen 
because if we do not listen to the voices that come from the 
people of America, from the people who are experts, because you 
live this reality on these islands with the threat of China 
ever so close. And it is our job to listen to those so that we 
can then take your voices back to the people's House and 
determine a policy that is in many ways written by you and your 
concerns.
    So, I am very grateful to the Chairman for pulling this 
bipartisan visit together to the region. I am very grateful and 
advanced to have what we have already learned on this visit, 
both about military issues, but also about what it means to be 
one Guam, what it means to be American in this island and in 
this great, beautiful Pacific.
    And we know that we must not say ``the U.S.'' as though it 
is something over here, but when we are talking about the 
territories that are part of the U.S., it is ``us,'' the United 
States, that there is no us and them in this region, it is an 
``us.'' So, I am very thankful for that.
    The witnesses are so impressive. Governor Guerrero, 
Governor Palacios, I hope I said that right, as well as 
Minister Ading, Minister Udui Jr., and Acting Secretary 
Cantero.
    It is actually my first visit to Guam, which might be some 
of the others. I come from a state that is in the middle of the 
country. It has no water around it, so whenever I see this much 
water, I get so very happy. And we recognize the four decades 
that the United States has maintained a special relationship 
with the Freely Associated States, the Federated States of 
Micronesia, and the Republic of the Marshall Islands, as well 
as the Republic of Palau.
    And the Compact of Free Association, as we have been 
listening to them in this Committee over the last many months, 
recognize the importance of continuing that relationship into 
the future, and as my colleagues have said, I do not think that 
there is any doubt that all of us don't recognize that 
importance. We are unified in a bipartisan manner across these 
issues, and our need in this visit is to once again listen to 
you tell us why it is so important so that we can then go back 
and convince our colleagues, and I don't think they will need 
that much convincing. I think you all have done a good job, and 
history has done the job of telling us why this is important 
and why this region is, in this moment, as important as it is.
    The Biden administration and the Presidential Envoy for 
COFA Negotiations, Ambassador Joseph Yun, are really being 
commended for securing these new compact agreements with FSM 
and Palau in May, and while negotiations have not been 
completely concluded with the RMI, we expect that they will be 
soon. Approving the proposal to review the financial provisions 
of the Compact of Free Association with FSM, Palau, and the RMI 
will continue our engagement with the FA and diminish the risk 
of China filling the vacuum in the region.
    We have heard that our people are scared of China because 
these are smaller islands and these are places where the threat 
could be easily carried out, so we will continue that and we 
will continue to make sure that the point of the spear, as it 
has been pointed out, continues to be strong and aimed 
accurately.
    In conclusion, I want to once again thank you, Mr. 
Chairman, for scheduling this hearing today. I want to thank 
the panelists for pointing out that it is not just militarily, 
but it is also the link that will honor the sacred that it is, 
the waters, the sea and all those beautiful creatures of Earth 
and of God that we have been given to protect those, to protect 
the environment, even as we protect the people and the security 
of each of the islands and of the United States.
    Muchos gracias. Thank you so very much.
    Mr. Chairman, I yield back.

    The Chairman. Thank you, Representative Leger Fernandez. 
Now I will introduce our witnesses on our first panel. We will 
be having two panels today, and first off someone who obviously 
needs no introduction here, but the Honorable Lourdes ``Lou'' 
Leon Guerrero, Governor of Guam from Hagatna, Guam; the 
Honorable Arnold I. Palacios, Governor of the Commonwealth of 
the Northern Mariana Islands from Saipan, Mariana Islands; the 
Honorable Kaleb Udui, Jr., Minister of Finance, Republic of 
Palau; the Honorable Ricky Cantero, Acting Secretary, 
Department of Foreign Affairs, Federated States of Micronesia, 
Ponhpei, Federated States of Micronesia; and the Honorable Jack 
Ading, Minister of Foreign Affairs and Trade, Republic of the 
Marshall Islands, Majuro, Republic of Marshall Islands.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statement to 5 minutes, but their 
entire statement will appear in the hearing record.
    To begin your testimony, please press the ``on'' button. 
Remember, there is a 3-second delay. We do use timing lights. 
When you begin, the light will turn green. At the end of 5 
minutes, the light will turn red, and I will ask you to please 
complete your statement. I will also allow witnesses on the 
panel to testify before Member questioning.
    The Chair now recognizes Governor Leon Guerrero for 5 
minutes.

 STATEMENT OF THE HON. LOURDES ``LOU'' LEON GUERRERO, GOVERNOR 
                     OF GUAM, HAGATNA, GUAM

    Governor Guerrero. Chairman Westerman, Ranking Member 
Fernandez, and members of the House Committee on Natural 
Resources, Hafa Adai, welcome to Guam and thank you for flying 
so far to meet us here.
    I would like to emphasize the vital importance of Guam and 
other Pacific Islands in U.S.-led global security. Throughout 
history, Guam has played a crucial role due to its strategic 
location sitting at the crossroads of Pacific powers. With its 
protected harbor and competitively large landmass, Guam serves 
as a critical hub for air and sea travel connecting China, 
southeast Asia, Japan, and North America.
    This positioning has made Guam pivotal in major American 
conflicts, contributing to peace and shared prosperity in the 
Pacific. However, in recent times, China's increasing influence 
in the region has raised serious threatening and real concerns. 
China's efforts to expand its reach to other Pacific Island 
countries through infrastructure projects, political 
maneuvering and socioeconomic coercion have repercussions for 
the Pacific Islands, including Guam.
    China's intentions indicate a potential threat to regional 
stability, an attempt to exert control over the region 
concealed in otherwise benign diplomatic agreements.
    Security in the Pacific means a viable and robust economy. 
Security in the Pacific means an educated workforce, a quality 
healthcare system, reliable infrastructure, resiliency of the 
community, and digital modernization. Security in the Pacific 
and the stable trade with Asia that follows it resonates far 
beyond the Pacific.
    Nearly 95 percent of America's potential customers live 
outside U.S. borders. 29 percent of U.S. exports of goods are 
sent to Asia, and this region represents over $2 trillion in 
trading goods with the United States in 2022. Moreover, the 
supply chain that sustains our daily lives, from food to 
electronics, rely on a secure Pacific.
    Given these circumstances, the question before us is 
simple: Who should shape the rules of future trade in the Indo-
Pacific? If the United States does not engage actively, China 
will, writing a future that will never put Americans first. To 
prevent this, I support bipartisan efforts to enhance U.S. 
engagement in the region and support efforts to bolster the 
security of Guam, other key territories and our allies and 
partners in the Indo-Pacific. This ensures the ability to drive 
prosperity in a free and open Indo-Pacific, especially for 
developing democracies in the Pacific.
    I also urge the Committee to create policies that allow 
Pacific Island countries to tap into American innovation and 
entrepreneurship to address perennial challenges.
    Furthermore, I ask Congress to recognize that our actions 
in the Pacific reflect the values we share: peace, prosperity, 
and a free democracy. I thank the Senate for including Guam in 
RECA legislation, and I ask the House for their support. By 
ensuring fair treatment of COFA citizens and investing in 
Guam's infrastructure and workforce development, the United 
States demonstrates its commitment to collaboration. 
Initiative, like a Guam-only visa program, COFA cost 
reimbursement, H2-B visa program, and funding for a new 
hospital showcase America as a reliable partner, capable of 
cooperation and competition.
    In closing, I thank you, Chairman Westerman, and this 
Committee for the opportunity to address this crucial issue. 
Let us work together to preserve peace, win prosperity, and 
expand opportunity in the Indo-Pacific region.
    Si Yu'us Ma'ase [Thank you].

    [The prepared statement of Governor Leon Guerrero follows:]
Prepared Statement of the Honorable Lourdes A. Leon Guerrero, Governor 
                      of Guam, Government of Guam
    Chairman Westerman, Ranking Member Grijalva, and distinguished 
Members of the House Committee on Natural Resources, hafa adai! Welcome 
to Guam.
    Mr. Chairman, by air travel, you are approximately 7,447 miles away 
from your home state of Arkansas and a similar distance from the 
nation's capitol in Washington, DC. Like each of your colleagues, the 
circumstances that bring you here are an equal blend of history, 
present circumstance, and a future still waiting to be written. History 
tells us that from 1521 to the present day, Guam has been, and 
continues to be, a linchpin of every Pacific Power.
    The reasons for this are simple. On the axis that crosses 5,000 
miles of the Pacific between Hawai'i and Asia, Guam is the only island 
with a protected harbor and sufficient land for major airports. Guam is 
also the largest landfall for communications, shipping, and military 
installations on the nearly 3,000-mile north axis from Japan to Papua 
New Guinea and Australia.
    This geography means that Guam has access by air and sea to China 
and Southeast Asia to the west, Hawai'i and North America to the east, 
and Japan to the north.
    For these reasons, Guam has played a unique and pivotal role in 
nearly every major American conflict in the late 20th and early 21st 
centuries. As a result of American engagement in the Marianas and the 
larger Pacific region, the United States won an unparalleled period of 
peace, economic trade, and shared prosperity in the Pacific. Yet, as 
time passed and other priorities drew America's watchful eye away from 
Pacific Island Countries, China emerged.
    Offering massive infrastructure packages, awarding what some have 
called predatory debt, and dispensing travel and training to certain 
Pacific Island Countries (PICs) personnel--China, in the present day, 
has shown a commitment to its goals. But what are they?
    Its first goal is to increase its popularity in the Pacific region 
and gain support for pro-Chinese policies at the United Nations. 
China's second goal: its proposed China-Pacific Island Countries Common 
Development Vision and the China-Pacific Island Countries Five Year 
Action Plan on Common Development (2022-2026).
    Put simply, because Guam can project power throughout the Indo-
Pacific region, China is working to project equal power onto Guam and 
its sister islands. This has brought with it specific consequences for 
the People of Guam. Yes, Guam has always been considered the tip of the 
American Spear in the Pacific. Some have said that the deployment of 
missile defense systems throughout Guam now makes it a first strike 
community in the eyes of China.
    Mr. Chairman, I know it's hard for some Americans to understand why 
any of this matters to their way of life. After all, Guam and the 
Pacific Islands are thousands of miles away.
    This is the best way I've heard it explained. Nearly 95% of 
America's potential customers live outside U.S. borders. 29% of U.S. 
exports of goods are sent to Asia, and this region represents over two 
trillion dollars in trade in goods with the United States in 2022. That 
trade, the lives and livelihoods that depend on it. The supply chain, 
the food on supermarket shelves, or chips in our computers and mobile 
phones--all if it relies on a secure Pacific.
    Knowing that, who should write the rules of U.S. trade with the 
Indo-Pacific? If we choose not to, China surely will. This is why I 
support the bipartisan effort to increase U.S. engagement throughout 
the region and invest in the security of Guam and other vital U.S. 
territories. It is why I join other island leaders in seeking economic 
and infrastructure support for the Pacific's developing democracies.
    And it is why I ask the members of this Committee to adopt policies 
and create programs that partner with PICs allowing them to engage 
American innovation and entrepreneurship in solving the problems we 
face.
    From talking and listening to many Pacific Island leaders over the 
years, it is clear that we want to grow our own economies and create 
job and business opportunities that can help turn the corner on why so 
many of our people have left our islands.
    To combat the impacts of climate change and illegal, unregulated, 
unreported fishing we need technology, we need financial expertise, we 
need trained workers, and new businesses if we are to secure the hard 
to access funds for climate change infrastructure and ocean resource 
monitoring. The U.S. Congress could develop or strengthen an existing 
incentive pathway for American businesses to help Pacific governments 
create and implement the mitigation and adaptation projects that will 
allow islanders to return and flourish at home. Furthermore, we must 
continue to build regional resilience in health security, climate 
adaptation and mitigation efforts, and energy security.
    Finally, I respectfully ask that Congress recognize that American 
values are constantly on display throughout the Pacific. How it treats 
one Pacific island is seen and felt by all Pacific islands.
    By ensuring fair treatment of COFA citizens and investing in Guam's 
infrastructure, the U.S. demonstrates its commitment to collaboration. 
Initiatives like a Guam-only visa program, COFA cost reimbursement, and 
debt forgiveness showcase America as a reliable partner capable of 
cooperation and competition. In short the Compact renewal must be 
reflective of a whole of government approach and the U.S. Congress' 
commitment to recognize the importance of our Pacific islands.
    In closing, I thank Chairman Westerman and this Committee for the 
opportunity to address this crucial issue. Let us work together to 
preserve peace, win prosperity, and expand opportunity in the Indo-
Pacific region.

                                 ______
                                 

  Questions Submitted for the Record to the Honorable Lourdes A. Leon 
                       Guerrero, Governor of Guam

            Questions Submitted by Representative Westerman

    Question 1. Guam has and continues to be strategically important 
for not only U.S. security, but also peace and stability in the Indo-
Pacific.

    What do you see as Guam's role in maintaining peace and stability 
in the region? Are there areas that you believe Guam could play a 
greater role in U.S. national security strategy and engagement with the 
Indo-Pacific?

    Answer. Guam possesses the potential to assume a more significant 
role in the United States National Security Strategy and its active 
involvement in the Indo-Pacific Region. Peace and stability in the 
region is a critical priority for our people, given our experiences 
during World War II. Our administration has consistently been deeply 
engaged in dialogue at the highest echelons of military leadership at 
the Pentagon, Indo-Pacific Command, and the Joint Region Marianas, as 
well as meeting with congressional delegates from the House and Senate 
Armed Services Committees, underscoring the critical nature of national 
security within this region. Within our team, we have committed 
individuals who grasp this importance and remain actively involved in 
deliberations concerning strategy, policy, and cultivating 
relationships to advance and safeguard U.S. interests in Guam and the 
Indo-Pacific. Guam has a unique opportunity to play a more significant 
role as a U.S. Territory and be home to one of the largest and fastest-
growing U.S. military contingencies in the Pacific region by engaging 
in all discussions regarding the Pacific. More notably, Guam should 
participate in the most recent legislation passed in the NDAA to 
establish a Regional Security Council. Given the pacing threat of China 
in the region and recent infiltrations to our cyber security network, 
Guam must be part of all security concerns and U.S. initiatives in the 
Pacific.

    Question 2. We are deeply concerned about the issue of People's 
Republic of China (PRC) nationals illegally entering Guam from the 
Commonwealth of Northern Mariana Islands. It has been reported that 27 
PRC nationals have been caught attempting to enter Guam from CNMI in 
the month of June alone.

    What are you and your team doing to address this issue? Has it been 
determined what these individuals were aiming to do once in Guam?

    Answer. The Guam Customs and Quarantine Agency (GCQA) has assigned 
officers to our main ports of entry, where they conduct roving 
surveillance of Guam's shorelines. I have established a multi-agency 
task force that reports vessel movements between the CNMI and Guam. 
This task force is dedicated to the issue of illegal entry of Chinese 
nationals and continues to meet to assess and maintain awareness of 
this concerning situation. The illegal entry individuals were charged 
with violations of local and federal statutes. These individuals have 
stated they made the trip to Guam to continue the pursuit of asylum and 
employment. Additionally, we have enlisted support of the public to 
report suspicious activities observed around Guam's reefs and beaches.

    Question 3. I think it is fair to say that we are all deeply 
troubled by reports of the PRC creating so-called ``Guam-killer'' 
missiles and simulating attacks on U.S. bases on Guam. It has been 
argued that U.S. military presence in Guam makes the island a target 
for our adversaries.

    Can you explain to us how it is important for Guam to continue to 
play a strategic role in U.S. policy in the Indo-Pacific and why you 
believe that the U.S. military presence on the island is important for 
Guam's security long-term?

    Answer. The U.S. military presence in Guam is strategically vital 
to the security of our island and the Indo-Pacific region. The PRC and 
other malign actors pose a significant threat to our security, 
prosperity, and freedoms. Therefore, the U.S. military must continue to 
have a strong presence in Guam long-term. However, any additional 
military growth must be balanced and closely coordinated with the 
government of Guam and the people of Guam. Any growth on the island 
comes with both challenges and opportunities, and it is critical that 
all parties take a ``Whole of Government'' approach to ensure that the 
benefits to Guam outweigh the costs.

    Question 4. The reports of the PRC government launching 
cyberattacks against U.S. military bases in Guam is unacceptable and 
alarming. This is a direct threat to our homeland and the American 
people. This is also a direct threat to stability in the Indo-Pacific 
and U.S. capacity to deter PRC aggression in the region. It appears 
these attacks were conducted through what is called the ``living off-
the land'' technique. This involves PRC nationals living on the island 
and infiltrating Guam's local networks.

    What are you and the team doing to address this threat? Can you 
share with us some of the work being done with federal agencies to 
prevent future attacks? Why is this threat not only a threat for the 
military, but also a threat for the residents of Guam?

    Answer. Being prepared and ready is key. I am working with all 
critical infrastructure agencies to establish and strengthen their 
cyber security plans. I have just approved our islandwide cybersecurity 
plan, and various agency plans will align up this plan. I have also 
elevated cybersecurity discussions with the highest levels of the 
Pentagon, the U.S. Department of Homeland Security's Cybersecurity and 
Infrastructure Security Agency (DHS CISA), and other federal partners 
to address this concern. My Homeland Security Advisor is engaged with 
DHS CISA to identify resources and/or funding to support our cyber 
security priorities. These threats from the PRC put critical 
infrastructure that the residents of Guam rely on at risk, including 
telecommunications, healthcare information, financial systems, and 
critical government websites.

                                 ______
                                 

    The Chairman. Thank you, Governor Guerrero.
    We will now move on to our next witness. I want to 
recognize Governor Palacios for 5 minutes. You are recognized.

   STATEMENT OF THE HON. ARNOLD I. PALACIOS, GOVERNOR OF THE 
      COMMONWEALTH OF NORTHERN MARIANA ISLANDS, SAIPAN, MP

    Governor Palacios. Thank you, Mr. Chairman. Hafa Adai, 
Tiroow Faischo [Hello and how are you] Chairman Westerman, 
distinguished members of the House Committee on Natural 
Resources. To my fellow islanders on the Committee, Congressman 
Sablan, Congressman Moylan and Congressman Radewagen, welcome 
back. Welcome back to the Marianas. Thank you for inviting me 
to speak with you today about some of the critical issues that 
are impacting our regions.
    Today's hearing is a testament to the significance and 
urgency of the role of the Pacific Islands in global 
geopolitics. That you have traveled thousands of miles to 
conduct this oversight hearing indicates that you indeed 
recognize the strategic value of these Pacific Islands in 
securing peace and freedom in our nation and the world.
    It is in the interest of national and global security for 
the U.S. Government to protect and fortify the Pacific 
territories and allies in the Freely Associated States against 
the growing threat of Chinese Communist Party.
    America's security architecture in the Pacific is not only 
founded in military defense, but also in the pillars of 
economic, social, and political stability in the region. It is 
based upon the economic prosperity, the health of people and 
eco-systems, and the rule of law. It is rooted in genuine 
trustworthy relationships and shared commitments backed by 
actions to a free and open Indo-Pacific.
    As such, I am happy that the United States is at last close 
to completing the negotiation to renew all the Compact of Free 
Association Agreements.
    The U.S. territories of the Northern Marianas, Guam, and 
American Samoa firmly anchor America's position in the Pacific, 
and together with the Freely Associated States, create a vast 
corridor of peace and security that spans nearly 3 million 
square miles and connects to the seas of the other island 
nations.
    Recognizing the strategic importance of America's 
territories and allies in Micronesia, the CCP moves 
aggressively to fill perceived voids in America's assistance, 
and to capitalize on social and economic vulnerabilities of the 
Pacific Island communities.
    We see these aggressively in massive investments in 
infrastructure and economic development. We see it in land 
grabs and fishery expansion. We see it in unauthorized research 
vessels lurking around our undersea fiber optic cables. We see 
it in organized crimes, public corruption, and political 
interference. There is a strategic edge in all these 
activities, and it stabilizes the island communities and cuts 
against America's influence and security in the region.
    In the Northern Marianas, during times of economic 
hardships and vulnerability, we too have turned to Chinese 
investment for solutions. In fact, for almost 40 years now, the 
Peoples' Republic of China has had a firm foothold in our 
islands, Chinese investors who are always conveniently there 
when we needed them, offering new industries and revenue 
sources that directly or indirectly advance the interest of the 
PRC in the Marianas.
    From the 1980s to early 2000, we had a garment industry, 
primarily Chinese owned, with more than 30 factories in the 
island of Saipan. Of course, there were many human rights and 
labor violations associated with the industry during those 
years. When the garment industry shut down, the Commonwealth 
lost a major source of revenue and drastic measures had a 
deeply destabilizing effect on our islands. To make up for the 
loss, we turned to Chinese tourism, and also to Chinese casino 
gaming.
    Prior to the COVID-19 pandemic, tourists from PRC comprised 
approximately 40 percent of all visitors arriving in the 
Marianas. The casino in Saipan had peaked billions of dollars 
in rolling chips, volumes generated from just 16 VIP tables.
    So, for a brief period, Chinese tourism and gambling 
revenue propped up the Commonwealth government and the economy, 
but this was short lived and had, unfortunately, consequences.
    Today, Chinese tourism dried up and the casino was shut 
down. The Commonwealth economy continues to struggle, and the 
government and our people are in deep fiscal distress. These 
are the conditions that makes the Commonwealth, again, acutely 
vulnerable to CCP exploitation.
    Shortly after I was inaugurated as governor this year, I 
announced the position of my administration, that we would 
pivot away from the Commonwealth's over-reliance of Chinese 
investment, and seek to strengthen our relationship with 
Federal partners and allies in the region.
    I worry about the instability of the Chinese markets in 
light of the shifting geopolitical currents. I also worry about 
the Commonwealth's potential exposure to national security 
concerns. Of course, not everyone was pleased with this 
position. We are taking a lot of hits for it, both economically 
and politically.
    And to this day, we are continually asked to open up to 
Chinese investment once again. That same kind of pressure 
ripples across the Pacific in various ways. Whatever form this 
pressure takes, it is always erosive to America's influence and 
security in the region.
    To strengthen the security architecture in the Pacific and 
to bolster our defense against CCP threats, the United States 
must expand its engagement in all of the island jurisdictions, 
and increase support for economic and social development for 
our communities.
    I offer the following recommendation: I ask that Congress 
revisit the provision of the covenant between the United States 
and the Northern Marianas, especially our Section 702, which 
provides direct financial and other assistance for the 
Commonwealth government and the islands for government 
operations, capital improvements, and economic development.
    Secondly, we are currently facing a workforce shortage that 
threatens the CNMI's economic recovery. And while we fully 
appreciate the Federal Government's considerable financial 
assistance for infrastructure improvements, we will not be able 
to carry these projects in a timely manner because of the labor 
challenges we face.
    I, therefore, ask for your urgent congressional support for 
legislation to repeal, or at least delay, the implementation of 
the touchback provision for the Commonwealth-only transitional 
program, which would require a significant portion of our 
workforce to exit the Commonwealth for an indefinite period 
while they wait for new permits to be processed.
    The touchback provision, as probably all of you know, is 
going to take effect next month and could not come at a worst 
time for us. Many businesses in the CNMI will be adversely 
impacted, and therefore, our economy too.
    Relative to this, I ask your support for Congressman 
Sablan's H.R. 560, the Population Stabilization Act, which aims 
to shore up the eroding population on workforce in the Northern 
Marianas----
    The Chairman. Governor, I am going interrupt. I am going to 
ask you to wrap up your testimony. Again, I will remind the 
witnesses that your written testimony is part of the record, 
but try to keep your oral statements to 5 minutes. If you want 
to just quickly wrap up, I will afford you that.
    Governor Palacios. Thank you. I have emphasized many of 
these points before in testimonies in the U.S. Senate Committee 
on Energy and Natural Resources, and before the IGIA in 
February, and in conversations that I had with my military and 
political leaders, the stability of America's territories and 
allies in Micronesia are inseparable from national security and 
peace in the region.
    Help us. Help us help ourselves so we can be stronger 
partners in bolstering national security and ensuring that the 
Pacific remains a haven of peace, prosperity, and freedom. 
Thank you, si yu'us ma'ase, ghilissow [thank you] for inviting 
me to testify before you today, and for coming all this way to 
have this field hearing. May God bless the Northern Marianas, 
all the Pacific Islands, and may God bless America.

    [The prepared statement of Governor Palacios follows:]
Prepared Statement of Governor Arnold I. Palacios, Commonwealth of the 
                        Northern Mariana Islands
    Hafa Adai and Tiroow, Chairman Westerman and distinguished members 
of the House Committee on Natural Resources. To my fellow islanders on 
the committee, Congressman Sablan, Congressman Moylan, and 
Congresswoman Radewagen--welcome back to the Marianas.
    Thank you for inviting me to speak with you on some of the critical 
issues that are impacting our region. Today's hearing is a testament to 
the significance and urgency of the role of the Pacific Islands in 
global geopolitics. That you have traveled thousands of miles to 
conduct this oversight hearing indicates that you indeed recognize the 
strategic value of the Pacific islands to securing peace and freedom in 
our nation and the world.

    And I am here to ask Congress to do more.

    It is in the interests of national and global security for the 
United States government to protect and fortify its Pacific territories 
and allies of the Freely Associated States of Micronesia (FAS) against 
the growing threat of the Chinese Communist Party (CCP). America's 
security architecture in the Pacific is not only founded upon military 
defense; it is also built on and inseparable from the pillars of 
economic, social, and political stability in the region. It is based 
upon the rule of law and the resilience of democratic institutions. It 
is rooted in economic prosperity and the health of people and 
ecosystems. It hinges upon genuine, trustworthy relationships and 
shared commitments, backed by action, to a free and open Indo-Pacific.
Interwoven, historic connections

    In the Marianas, we are Americans. We are also Micronesians. The 
social, cultural, political, and economic ties that weave together the 
islands of Micronesia, from Palau to the Marshalls, date back to 
ancient times. These connections survived colonization from different 
nations, natural disasters, and war. For centuries, the peoples of 
Micronesia have traveled back and forth across the broad expanse of the 
Pacific, stopping in the islands to live, work, trade, study, marry, 
and raise families.
    Since the beginning of the 20th century, the islands of Micronesia 
have been strategically important on the global stage, particularly in 
the midst of conflict and competition between superpowers. Our 
relationship with the United States was forged in war, in the bloody 
battles of World War II, and refined in peace, when the islands of 
Micronesia were administered by the U.S. under the United Nations Trust 
Territory of the Pacific, from 1947 through 1994.
    It was during the Trust Territory era that each of the 
jurisdictions would freely determine their political status and their 
paths to self-sufficiency and the economic and social advancement of 
their citizens. The island of Saipan in the Northern Marianas was the 
center of many political negotiations, and served as the seat for the 
Trust Territory administration's headquarters. It was also the 
birthplace of the Congress of Micronesia.
    Ultimately, each of our jurisdictions chose democratic forms of 
government, and a close relationship with the United States. In the 
Northern Marianas, we decided against becoming a sovereign nation to 
become American citizens, members of the American family. We chose to 
become a commonwealth in political union with the United States, and we 
negotiated the terms of this special relationship in a document we know 
today as the Covenant.\1\
---------------------------------------------------------------------------
    \1\ U.S. Public Law 94-241, 48 U.S.C. Sec. Sec. 1801-1805, The 
Covenant to Establish a Commonwealth of the Northern Mariana Islands in 
Political Union with the United States of America.
---------------------------------------------------------------------------
    The Covenant was approved by the people of the Northern Marianas in 
1975, and ratified by the U.S. Congress and signed into law in 1976. It 
guarantees the right of local self-government for the people of the 
Northern Marianas, and provides the United States with complete 
authority and responsibility over foreign affairs and defense. The 
Covenant also requires the United States government to assist the 
government of the Northern Marianas in its efforts to achieve a higher 
standard of living for its people and to develop the economic resources 
needed to meet the responsibilities of local self-government.
    Our brothers and sisters in Micronesia opted for independence--
Palau and the Marshall Islands became republics, and the jurisdictions 
of Kosrae, Pohnpei, Chuuk, and Yap formed the Federated States of 
Micronesia. They retained their national sovereignty and control over 
foreign and domestic affairs, and negotiated special relationships with 
the United States defined in each of the Compacts of Free Association. 
The Compacts provide significant economic assistance for the island 
nations, as well as the right of FAS citizens to reside and work in the 
United States as lawful non-immigrants. The Compacts also grant the 
United States full authority and responsibility over national security 
and defense, including the right to deny military access for other 
countries to the land, sea, and airspace of the Compact nations.
America's corridor of peace and security in the Pacific

    There is no agreement between the United States and any other 
nation that is quite like the Compacts of Free Association. The Freely 
Associated States of Micronesia are among America's closest allies on 
earth, and our nation's most strategically important partners in the 
Indo-Pacific. The U.S. territories of the Pacific firmly anchor 
America's position in the region, and together with the Freely 
Associated States create a vast corridor of peace and security that 
spans nearly three million square miles and connects to the seas of 
other allied nations.
    The Pacific territories and the Freely Associated States form a 
critical line of defense against America's adversaries in the region. 
It is in America's national security interests to fortify this line of 
defense by expanding engagement in the region and support for the 
territories and Compact nations.
    The United States is more than a nation with borders on the North 
American continent. It is also a Pacific nation, and on U.S. soil 
everywhere in the Pacific we experience CCP aggression on multiple 
fronts. We see it in massive investments in infrastructure and economic 
development. We see it in land grabs and fisheries expansions. We see 
it in unauthorized research vessels and divers lurking around our 
undersea fiber optic cables. We see it in organized crime, public 
corruption, and political interference. There is a strategic edge in 
all of the CCP's activities, and it destabilizes island communities and 
cuts against America's influence and security in the region.
Rising influence of the CCP in Micronesia

    Across the Pacific and over the course of decades, the CCP's 
influence has grown, particularly through economic aid, commerce, and 
infrastructure. There are signs seemingly everywhere of ``friendship 
projects'' sponsored by the People's Republic of China (PRC) in the 
islands. The CCP moves both quickly and methodically to fill perceived 
voids in American assistance and to capitalize on the social and 
economic vulnerabilities of Pacific Island communities.
    In the Northern Marianas, during times of economic hardship and 
vulnerability, we have also turned to Chinese investment for solutions. 
Chinese investors were always conveniently there when we needed them, 
offering almost irresistible opportunities for new industries and 
revenue sources that also directly or indirectly advanced the interests 
of the PRC in the Marianas.
    From the 1980s through the early 2000s, we opened our doors to the 
garment industry. More than 30 factories, predominantly Chinese-owned, 
set up operations throughout the 47-square mile island of Saipan to 
assemble garments for export to the continental United States. Tens of 
thousands of people were brought in, many from the PRC, to work in 
these factories. The factories began to close after global trade rules 
changed in 2005, stripping the commonwealth of competitive advantages 
it had through tariff-free and quota-free access to U.S. markets. In 
2008, with the passage of U.S. Public Law 110-229, the commonwealth 
lost local control over immigration after years of well-documented 
human rights and labor violations. Many of these abuses were associated 
with the garment industry. The last factory shut down in 2009.
    With the closure of the garment industry, the commonwealth lost a 
major source of revenue.\2\ Drastic austerity measures followed, and 
had a deeply destabilizing effect on the people and economy of the 
Marianas. To make up for the loss, we turned once again to Chinese 
investment. We turned to Chinese tourism, capitalizing on the 
commonwealth's approved destination status with China and special visa-
free access to Chinese tourists that was granted during the transition 
to federal immigration control.\3\ We turned to Chinese gambling, 
legalizing casino gaming on Saipan even after the venture previously 
failed on Tinian. An exclusive license was nevertheless awarded to a 
Chinese casino operation that has been mired in litigation and criminal 
investigation practically from the start.
---------------------------------------------------------------------------
    \2\ In 1998, the garment industry contributed approximately $52 
million, or 22 percent, of the Northern Marianas government's $234 
million budget. ``Northern Mariana Islands: Garment and Tourist 
Industries Play a Dominant Role in the Commonwealth's Economy.'' U.S. 
General Accounting Office, Report to Congressional Committees. February 
2000.
    \3\ Since November 2009, PRC nationals have been allowed to enter 
the Northern Marianas as tourists visa-free, under the discretionary 
parole authority of the Secretary of Homeland Security.
---------------------------------------------------------------------------
    Prior to the Covid-19 pandemic, tourists from the PRC comprised 
approximately 40 percent of all visitor arrivals in the Northern 
Marianas.\4\ The Chinese casino on Saipan at its peak raked in billions 
of U.S. dollars in monthly rolling chip volumes from just 16 VIP 
tables, outdoing even the glitziest casinos in Macau. The casino also 
provided jobs and contracts for U.S. residents and substantial revenues 
for public services. For a brief period, Chinese tourism and gambling 
revenues unsustainably propped up the commonwealth's government and 
economy. But this short-lived recovery was fraught with controversy--
from human trafficking to birth tourism, labor abuse, money laundering, 
and public corruption.
---------------------------------------------------------------------------
    \4\ Marianas Visitors Authority, Annual Reports for Fiscal Year 
2018 and Fiscal Year 2019.
---------------------------------------------------------------------------
    Since the pandemic, Chinese tourism to the Marianas has all but 
dried up, and the Saipan casino has closed. The commonwealth was 
fortunate to have received over a billion dollars in federal assistance 
during the pandemic years to shore up our economy and sustain essential 
public services. This aid was a lifeline, but unfortunately, to our 
shame and dismay, much of it was squandered by my predecessor. My 
administration continues to work with our federal partners to track 
where those funds may have been illegally or improperly spent, and how 
much can be recovered.
    The Northern Marianas economy continues to struggle, and the 
government remains in deep fiscal distress. These are conditions that 
make the commonwealth acutely vulnerable to CCP exploitation. When I 
came into this office, I announced the position of my administration 
that we would pivot away from the commonwealth's overreliance on 
Chinese investment, and seek to strengthen our relationships with our 
federal partners and allies in the region. I worried about the 
instability of the Chinese markets in light of shifting geopolitical 
currents. I also worried about the commonwealth's potential exposure to 
national security concerns.
    Not everyone was pleased with this position. We are taking the hits 
for it, both economically and politically. To this day, certain 
influential business interests in the community continue to ask me as 
well as members of the commonwealth legislature to open up to Chinese 
investment once again. That same kind of pressure ripples across the 
Pacific in various ways--to sell fishing rights or accept Chinese 
investment in public infrastructure, for example, or enter partnerships 
with PRC law enforcement, or lower visa requirements for Chinese 
tourists and workers. Whatever form this pressure takes, it is always 
erosive to America's influence and security in the region.
Supporting the Compacts, and strengthening America's engagement in the 
        Pacific

    I am happy to see that the United States is at last close to 
completing negotiations to renew all of the Compacts of Free 
Association. But I urge Congress and all of our federal partners in the 
region to exercise more timeliness and a sense of urgency in 
negotiating such critical agreements with the Freely Associated States. 
The appearance of reluctance or foot-dragging by the United States 
directly undermines national security interests, and reinforces the 
perception of the PRC as a more reliable partner and a bigger economic 
player in the region. These perceptions only become more pronounced 
with heightened economic, social, and political vulnerabilities in the 
islands.
    The U.S. can strengthen its security architecture in the Pacific by 
expanding engagement with all of the island jurisdictions, both the 
territories and the Compact nations, and increasing support for the 
economic and social development of these communities. Safety, security, 
and prosperity should not be mere aspirations but tangible realities 
for all in the Pacific. Stable, democratic island communities are able 
to meet the obligations of self-government and provide for the 
wellbeing of their citizens. And they make stronger partners with the 
United States in advancing the goals of national security and ensuring 
a free and peaceful Indo-Pacific region.
    In the Northern Marianas, we support the Compacts, and we welcome 
our brothers and sisters from the Freely Associated States. We extend 
to them the same hospitality and respect when they come to our islands 
as they do when we go to theirs. We are, after all, members of the 
Micronesian family.
    We know there are costs associated with the broad array of public 
services that are afforded to citizens of the Freely Associated States 
who migrate to the United States to live, work, study, or seek 
healthcare. For the U.S. territories and Hawaii, Congress has 
appropriated what is known as ``Compact Impact Funds'' to help defray 
these costs and at least partially reimburse local governments for the 
health, educational, social, or public safety services provided to FAS 
citizens and their families. Since 2004, through Public Law 108-188, 
Congress has authorized $30 million in annual Compact Impact grants 
distributed to the Northern Marianas, Guam, American Samoa, and Hawaii. 
That authorization expires in Fiscal Year 2023.
    The Northern Marianas share of those funds has always been 
considerably small at approximately $1.7 million a year, and almost 
certainly far short of actual expenditures for services rendered. Fully 
and accurately accounting for FAS residents and associated public 
expenditures is challenging, however. The American Community Survey 
does not cover the territories, and so we rely on the decennial census 
and population estimates drawn from that data.
    Moreover, in the Northern Marianas, our agencies and social service 
organizations do not use a consistent definition to capture the FAS 
populations they serve. They also do not use a consistent methodology 
for determining expenditures that can be attributed to services 
provided to FAS residents.
    I think that part of our difficulty in tracking such data lies in 
our discomfort with putting a number on costs associated with the 
presence of our Micronesian brothers and sisters in the Marianas. To be 
frank, I dislike the term, ``Compact Impact.'' The connotation is 
negative, and it understandably makes people bristle. It brushes over 
the reciprocal nature of the relationship between the United States and 
the Compact nations. It also erases the close ties that bind island 
communities across the Pacific. And it fails to adequately acknowledge 
the shared contributions of all of the island jurisdictions to the 
defense of our nation and freedom and security in the Indo-Pacific 
region.
    I suggest that we stop calling it Compact Impact. Let's call it 
``Compact Support.'' And let's not only rename it, but reframe its 
purpose beyond merely ``defraying costs'' and ``mitigating impacts.'' 
The economic aid provided in the Compacts of Free Association is a 
crucial element in America's security architecture in the Pacific. 
Compact Support funds are also key to enabling America's Pacific 
Islands to build up and expand our defenses against CCP ambitions. 
Compact Support funds can help fortify vulnerable island communities by 
providing the means to achieve economic, social, and political 
stability and shore up financially distressed governments.
The Northern Marianas should be America's diplomatic center in 
        Micronesia

    Reciprocity and mutual aid are bedrock Pacific values, and 
islanders place great stock in cultivating long-term, mutually 
beneficial relationships. With our deeply rooted cultural and 
historical ties and close friendships in the region, the Northern 
Marianas can and should be America's bridge to strengthen relationships 
with our Pacific neighbors, and facilitate multifaceted defenses to 
counter CCP aggression, from economic development and law enforcement 
capacity building, to learning exchanges, national security networks, 
and think tanks.
    The Department of Defense maintains a strong presence in 
Micronesia, particularly through Guam. So, too, should the State 
Department, and I propose that the U.S. base for diplomatic engagement 
with the nations of Micronesia and all of Oceania should be 
headquartered in the Northern Marianas. Formally establishing the 
Northern Marianas as the U.S. center for diplomacy in Micronesia can 
open pathways for enduring relationships and deeper engagement with our 
brothers and sisters in the Pacific.
    I urge Congress to support initiatives that reinforce America's 
position as a strong and trusted partner in the Pacific. To bolster our 
defenses against CCP threats in our region, we need a robust network of 
national security advisors across the territories and Freely Associated 
States. These networks can play a critical support role for territorial 
governors and Micronesian heads of state, and deliver capacity building 
to help island communities effectively respond to difficult and 
destabilizing problems, from illegal, unreported, and unregulated (IUU) 
fishing to organized crime and money laundering. Complementary to this 
effort is the bipartisan H.R. 5001, which I support, and which would 
place special advisors for insular areas in every executive department 
of the federal government, and help ensure that the needs and concerns 
of island communities are carefully considered in federal decision-
making.
Stability in the Pacific is key to national and global security

    The social, economic, and political stability of America's 
territories and allies in the Pacific cannot be separated from national 
security interests and peace in the region. As the commonwealth pivots 
to closer relationships with our federal partners and allies in the 
Pacific, I see many ways that Congress can support territorial 
stability and therefore national security.
    In previous forums, I have called upon Congress and the Biden 
administration to help us build our law enforcement capacity with 
federal partners, strengthen our financial accountability systems, and 
secure parity in key federal programs that serve our most vulnerable 
citizens, like Medicaid and Nutrition Assistance. These asks are still 
very much relevant and remain ongoing endeavors.
    We also need Congress to recognize the unique challenges we face in 
the islands, and to make changes to federal policies that hinder our 
economic and social development. In the Northern Marianas, our recovery 
from several major typhoon disasters and the pandemic has been slowed 
by federal policies that have created roadblocks in procurement and 
instability in the workforce. With respect to our procurement 
challenges, we understand and appreciate the goals of the Build 
America, Buy America (BABA) Act to strengthen American industries and 
national security, and deliver good-paying jobs. In the Pacific 
Islands, however, this policy becomes untenable when it makes the 
sourcing of equipment and supplies extremely cost-prohibitive and when 
it is exceedingly difficult for small island territories to compete 
with bigger states in procurement.
    Thankfully, several federal agencies have recognized the 
extraordinary hardship that BABA requirements impose on small island 
communities, and have moved to grant BABA waivers for the Pacific 
territories. Each federal agency must go through a rather lengthy 
process to grant these waivers, however, and every day of delay in an 
important infrastructure project costs us dearly. A blanket BABA waiver 
from Congress across the federal family would efficiently resolve the 
issue, and allow the territories to access closer markets with allied 
nations so that our projects can move forward.
    With respect to our workforce challenges, nearly all of our 
infrastructure and recovery projects are slowed by worker shortages, 
and the Northern Marianas has seen significant population declines over 
the past 20 years.\5\ To shore up the commonwealth's eroding population 
and workforce, I urge Congress to pass Representative Gregorio Kilili 
Sablan's H.R. 560, the Northern Mariana Islands Population 
Stabilization Act, which would provide stability and permanent 
residency in the Marianas for an estimated 1,600 long-term foreign 
workers. I also ask for congressional support to repeal or at the very 
least delay implementation of the touchback provision in the 
Commonwealth-Only Transitional Worker (CW) program, which requires a 
significant portion of our workforce to exit the commonwealth for an 
indefinite period while they wait for permit renewals to be processed.
---------------------------------------------------------------------------
    \5\ U.S. Census data show that the Northern Marianas population has 
declined by nearly 32 percent from 69,221 in 2000 to 47,329 in 2020.
---------------------------------------------------------------------------
    The touchback provision goes into effect for many CW workers next 
month, and the disruption that would be created by a mass exodus of 
workers could not come at a worse time. Businesses large and small, and 
workers across the commonwealth, are deeply anxious. The touchback 
requirement will only cause further instability in already-uncertain 
times, and we need Congress to urgently and expeditiously change this 
federal policy.
American engagement ensures a free and peaceful Indo-Pacific

    America's national security interests are interwoven with the needs 
of the territories and the Freely Associated States for support and 
stability, just as the island communities of Micronesia are interwoven 
with each other. American engagement and assistance to the region are 
vital for both national and global security, strengthening partnerships 
of mutual benefit and supporting the advancement of Pacific Island 
communities.
    Again and again, the CCP has demonstrated its capacity to exploit 
the vulnerabilities of the islands in order to amplify the presence and 
power of the PRC and undercut American influence and security in our 
region. The CCP fully recognizes the strategic importance of America's 
territories and allies in Micronesia. To counter CCP aggression, 
America must stand as a beacon of shared commitment and respect, and 
deliver on its promises to take care of its citizens and friends. 
Congress can do more to support the Pacific Islands and protect 
national security by recognizing our unique challenges, expanding 
engagement and direct assistance, and making changes in federal 
policies that impair our development.
    I have emphasized many of these points before in testimonies before 
the U.S. Senate Committee on Energy and Natural Resources and the 
Interagency Group on Insular Areas in February, and in conversations I 
have had with military and political leaders. Help us help ourselves, 
so we are stronger partners in bolstering national security and 
ensuring that the Pacific remains a haven of peace, prosperity, and 
freedom.
    Si Yu'us Ma'ase, Ghilisow, and Thank You for inviting me to testify 
before you today, and for coming all this way for this important field 
hearing. I invite the members of this committee to visit us in the 
Northern Marianas as well, so you can enjoy our hospitality and 
beautiful islands and see for yourselves the unique opportunities and 
challenges that we face.
    May God bless the Northern Marianas and all the Pacific Islands. 
May God bless the United States of America.

                                 ______
                                 

    Questions Submitted for the Record to the Hon. Arnold Palacios, 
           Governor, Commonwealthof Northern Mariana Islands
            Questions Submitted by Representative Westerman
    Question 1. What are you and your administration doing to diversify 
CNMI's economy and become less reliant on the People's Republic of 
China?

    Answer. As I indicated in my written testimony submitted to the 
U.S. House of Representatives--Natural Resources Committee, I announced 
the position in the first few weeks of my administration that we would 
pivot away from the Commonwealth's overreliance on Chinese investment.
    Of course, this was not an entirely popular decision with some 
sectors of the community. We continue to take hits for it, both 
economically and politically. To this day, we are continuously 
pressured and asked to open up to Chinese investment once again or to 
actively pursue activities that would restart and expand Chinese 
tourism to the CNMI.
    Nonetheless, we remain steadfast in our commitment to diversifying 
our economy by strengthening relationships, seeking investments, and 
expanding tourism from Japan, Korea, and other U.S. allies in the 
region:
Japan

    Because of the historic, economic, and strategic significance of 
Japan to the CNMI, one of the first initiatives I pursued as Governor 
was to personally engage government leaders from key Japanese 
government agencies, airline executives, and senior executives of some 
of the largest tour agencies to discuss how we can expand the tourism 
source market from that country.
    In addition to increasing flight service, we also discussed the 
possibility of launching new, direct flight routes from Haneda Airport. 
Flying from Haneda would be more convenient for many Japanese residents 
because that airport is located in the metropolitan area of Tokyo. 
Current flights to the CNMI fly out of the Narita Airport, which is 
located approximately two hours from Tokyo and whose distance from 
Tokyo may present barriers and inconveniences. We also sought the 
assistance of the U.S. Embassy to assist in this effort.

    The meetings we had in Japan included the following organizations 
and companies:


------------------------------------------------------------------------
       Organization                Representatives in Attendance
------------------------------------------------------------------------
U.S. Embassy in Japan      1. Mr. Alan Turley, Counselor for Commercial
                            Affairs
------------------------------------------------------------------------
Japan Association of       1. President of JATA, Mr. Tadashi Shimura
 Travel Agents (JATA),
 whose membership
 includes 1,100 travel
 agencies
------------------------------------------------------------------------
Japan's Ministry of        1. Minister of Defense, Yasukazu Hamada
 Defense
------------------------------------------------------------------------
Japan's Ministry of Land,  1. Vice Minister of MLIT, Nishida Shoji
 Infrastructure,
 Transportation and
 Tourism (MLIT)
------------------------------------------------------------------------
Japan Airport Terminal     1. Executive Vice President, Hisayasu Suzuki
 Co., Ltd. (Operates and
 manages Haneda Airport)
------------------------------------------------------------------------
Japan's Ministry of        1. Deputy Minister of ETI, Mr. Shinichi
 Economy, Trade and         Nakatani
 Industry (ETI)
------------------------------------------------------------------------
H.I.S. (Travel and Tour    1. Osamu Yamaguchi, General Manager, Leisure
 Agency)                    Travel Sales Division Overseas Travel
                            Department, Micronesia/Indonesia/Philippines/
                            South Pacific/Indian Ocean Section
                           2. Shingo Mizushima, Manager, Beach Tour
                            Planning Team and Packaged Tour Sales Group
------------------------------------------------------------------------
Rakuten (Travel and Tour   1. Futoshi Habaya, General Manager, Airline
 Agency)                    Sales and Package Tour Dept.
                           2. Dhimant Thakker, Vice General Manager,
                            Airlines Sales and Package Tour Dept
                           3. Masamichi Takayasu, Vice General Manager,
                            International Sales Department
                           4. Karin Ide, International Airlines Sales
                            and Package Tour Group
                           5. Aya Tojo, Manager, International Airlines
                            Sales and Package Tours
                           6. Richard Gustafson, DFS Group Managing
                            Director for Japan, Korea, and Mid Pacific
------------------------------------------------------------------------
JTB (Travel and Tour       1. Junichiro Takahashi, President of Tasi
 Agency)                    Tours and T.P. Micronesia (Guam)
                           2. Masaki Yoshida, General Manager, JTB
                           3. Sabumi Ito, Manager, Planning and
                            Purchasing Section
------------------------------------------------------------------------


------------------------------------------------------------------------
       Organization                Representatives in Attendance
------------------------------------------------------------------------
United Airlines            1. Toru Takahashi, Managing Director, Japan
                            and Micronesia Sales United Airlines
                           2. Hieaki Takahashi, Manager, Online Sales
                            and Business Development
                           3. Hiroshi Hamada, Sales Manager (Japan)
                           4. Koji Nagata, Director of Asia/Pacific
                            Communications
------------------------------------------------------------------------
Skymark Airlines           1. Hayao Hora, President and Executive
                            Officer
                           2. Manabu Motohashi, Senior Managing Director
                            and Executive Officer, Corporate Planning,
                            Sales
                           3. Tetsuya Okuno, General Manager, Corporate
                            Planning Department
------------------------------------------------------------------------


South Korea

    At this time, the Korean tourism market makes up the largest source 
market for the CNMI. Thus, it was important that we continue to grow 
this market and to learn how we can further enhance the CNMI as a 
compelling destination for Korean tourists. To do this, I traveled with 
representatives from the Marianas Visitors Authority to Seoul, Korea, 
where we also had positive discussions with top government leaders and 
senior executives from Korean airlines and tour agencies.
    During the meeting with Jeju Airlines, the company's executives 
announced that it would restart direct routes from Busan, Korea, to the 
CNMI (prior to this all Saipan bound flights originated from Seoul). Of 
course, this was welcome and excellent news, and I expressed my 
appreciation and offered support to sustain the additional route past 
the peak summer season.

    Our meetings in Korea included the following:


------------------------------------------------------------------------
         Organization                Representatives in Attendance
------------------------------------------------------------------------
U.S. Embassy in South Korea    1. Ambassador Philip S. Goldberg
                               2. Michael Kim, Commercial Officer
                               3. Jessica Son, Senior Commercial
                                Specialist
------------------------------------------------------------------------
South Korea Ministry of Land,  1. Eo Myeong-so, Vice Minister for
 Infrastructure and Tourism     Transport
                               2. Kim Namgyun, Director, International
                                Air Transport Division
                               3. Kim Jinhee, Deputy Director,
                                International Air Transport Division
                               4. Kim JaeHyeong, Assistant Director,
                                International Air Transport Division
                               5. Song Jee-un, Interpreter,
                                International Air Transport Division
------------------------------------------------------------------------
Jeju Air                       1. Kim, E-Bae, CEO
                               2. Jung, Kaepil, Director, Commercial
                                Division
                               3. Joo, Sangho, Team Leader, Sales and
                                Marketing
                               4. Mo, Miyoung, Manager, Sales and
                                Marketing
------------------------------------------------------------------------
T'way Airlines                 1. Jeong, Hong Geun, President, CEO
                               2. Kim, Hyung Yi, Executive Managing
                                Director
                               3. Park, Kibae, Team Leader
------------------------------------------------------------------------
Asiana Airlines                1. Doo, SungGuk, Executive Vice
                                President, Passenger Business
                               2. Seon, WanSeong, Senior Vice President,
                                Sales Strategy
                               3. Moon, YouSang, Team Leader, Sales
                                Strategy 1
                               4. Yoon, Seokmin, Team Leader, Sales
                                Strategy
                               5. Kim, Sangwon, Team Leader, Revenue
                                Management
                               6. Son, SangSeok, Manager, Sales Strategy
                                1
                               7. Cho, Sujin, Manager, Marketing
------------------------------------------------------------------------
Mode Tour (Travel and Tour     1. You, In Tae, President
 Agency)
                               2. Cho, Jaewang, Director of Product
                                Headquarters
                               3. Chung, Heeyoung, Senior General
                                Manager
                               4. Yeon, Chimo, General Manager
------------------------------------------------------------------------
Yellow Balloon (Travel and     1. Kim, Jin Kook, CEO, President
 Tour Agency)
                               2. Kim, Sungtae, Director
                               3. Han, Ye Rim, General Manager
                               4. Ju, Shin Ah, Team Manager
------------------------------------------------------------------------
Hana Tour                      1. Song, Misun, CEO
                               2. Kim, Chang Hun, Head of Division
                               3. Kim, Jaewoon, Head of Department
                               4. Le, Jinju, Team Leader
------------------------------------------------------------------------


Engaging other Direct Investment from other Countries

    Representatives from my administration continue to invite and 
engage foreign direct investment from other countries. As part of this 
overall effort to diversify our economy, I led a small delegation to 
the SelectUSA Investment Summit back in May. The Summit, organized by 
the U.S. Department of Commerce, is the leading event in the United 
States for FDI promotion, connecting investors, companies, economic 
development organizations (EDOs) and industry experts to elevate 
investment in the states and territories by vetted foreign countries.
    This past year's event was the U.S. Department of Commerce's 
largest investment summit to date, with record levels of participation 
from over 4,900 attendees from 83 international markets and 55 states 
and territories. The CNMI hosted a booth on the exhibit floor where our 
team spoke with potential investors from numerous countries 
representing different industries.

    It was also the first time the Summit featured a panel composed 
entirely of governors from all the U.S. insular areas who talked about 
potential investment opportunities. The event also afforded me the 
opportunity to participate in the following:

  1.  U.S. Department of Commerce's Secretary Gina M. Raimondo 
            roundtable discussion which featured a conversation on the 
            role CHIPS is playing to help build the U.S. semiconductor 
            ecosystem across the country and how states are driving 
            implementation, competitiveness, and local impact through 
            incentives. The governors' roundtable discussion 
            demonstrated the impact of federal, state, and local 
            government partnerships to drive innovation to improve 
            America's competitiveness and attract investment to build 
            the U.S. semiconductor ecosystem--leveraging SelectUSA as a 
            critical mechanism to do so.

  2.  Reception for Taiwanese investors organized and hosted by Taiwan 
            representative Bi-khim Hsiao of the Taipei Economic and 
            Cultural Office (TECRO)

  3.  Reception for Japanese investors organized by the Japan External 
            Trade Organization (JETRO)

  4.  Reception for Indian investors organized by the Indian ambassador 
            to the U.S.

  5.  Reception for Japanese investors organized by the Japan 
            ambassador to the U.S.

Moving Forward

    Despite these efforts itemized above, we know that the economic 
challenges that face the Commonwealth may become more severe without 
significant federal government financial assistance. When I testified 
last month before the Natural Resources Committee, I mentioned that the 
CNMI is facing financial conditions that make our commonwealth again 
acutely vulnerable to Chinese Communist Party exploitation.

    I also echoed this message when I testified before the U.S. Senate 
Committee on Energy and Natural Resources in February and top level 
federal officials at the meeting of the Intergovernmental Group on 
Insular Affairs. I explained the path we are forging to fiscal, 
economic, and social stability in the Commonwealth. I acknowledged the 
rapidly shifting geopolitical sands affecting our entire Pacific 
region. I also emphasized the vital role the Marianas plays in the 
security of our nation and America's position in our region.
    I sought technical assistance in auditing the Commonwealth's 
federal and local accounts, and expanding our capacity for tax 
collections and enforcement. I asked for support in breaking 
bottlenecks in federal review processes to allow hundreds of millions 
of dollars in federally funded infrastructure projects to move forward. 
I urged for the passage of key legislative initiatives, including 
Congressman Kilili Sablan's H.R. 560, the Population Stabilization Act, 
as well as amendments to the U.S. Workforce Act to repeal the touchback 
provision.
    Here at home, our administration has been focused on identifying 
ways to streamline government processes, reduce costs, and improve the 
service experience and responsiveness of government. I have directed 
our regulatory agencies to track and report on turnaround times for 
permit reviews and decisions so that doing business in the CNMI is 
easier and more efficient.
    We are exploring ways the Commonwealth can be a regional hub for 
targeted educational programs--such as in the areas of healthcare and 
English language training. The Commonwealth can also be a regional hub 
for shipping, using our Covenant and key federal policies to our 
advantage. And as we move closer to completion of a renewable energy 
feasibility study and a strategic energy plan for the Marianas in the 
next few months, the Commonwealth can become a leader in the region in 
transitioning to clean, renewable energy that will lower the cost of 
business and benefit all ratepayers.
    I will continue to update you and the members of the Natural 
Resources Committee about our progress to diversify our economy and 
build economic sustainability. In the meantime, I continue to ask for 
your urgent support, especially for the requests I listed in my written 
testimony.

    Question 2. We are deeply concerned about the issue of People's 
Republic of China (PRC) nationals illegally entering Guam from the 
Commonwealth of Northern Mariana Islands. It has been reported that 27 
PRC nationals have been caught attempting to enter Guam from CNMI in 
the month of June alone.

    What are you and vour team doing to address this issue? Has it been 
determined what these individuals were aiming to do once in Guam?

    Answer. The CNMI continues to be very concerned and seriously 
considers violations against any applicable U.S. laws that prohibit 
human smuggling or human trafficking. We are working with enforcement 
representatives and policy makers from federal agencies and the 
Government of Guam to see how we can address and eliminate unauthorized 
entries of PRC nationals into Guam from the CNMI.

    There is a need to strengthen federal enforcement efforts to help 
curb these entries, as the resources and legal authority by the Guam 
and CNMI governments are limited. To expand the dialogue and 
collaboration with federal enforcement agencies, we recently met with 
the following representatives from the U.S. Department of Homeland 
Security to help align local and federal activities to address illegal 
entries into Guam:

   1.   Daniel Delgado, Director, Border and Immigration Policy

   2.   Patrick Madaj, Regional Affairs Specialist, Indo-Pacific 
            Affairs Office of Strategy, Policy, and Plans

   3.   John F. Tobon, Special Agent in Charge, Homeland Security 
            Investigations

   4.   John Duenas, Assistant Special Agent in Charge, Homeland 
            Security Investigations

   5.   Valentina C. Seeley, OPE (A) Assistant Deputy Director, Office 
            of Partnership and Engagement (OPE), Immigration and 
            Customs Enforcement (ICE)

   6.   Moises Becerra, Field Office Director, ICE--Enforcement and 
            Removal Operations (ERO)

   7.   Orestes Cruz, Deputy Field Office Director, ICE--Enforcement 
            and Removal Operations (ERO)

   8.   Joseph Joh, Assistant Director/Sr. Adviser, USCIS and ICE/
            Immigration, OLA (listen-mode)

   9.   Kim Johnson, Deputy Director, Office of Intergovernmental 
            Affairs

  10.   Cedric McMinn, Associate Director, Office of Intergovernmental 
            Affairs

    As these conversations advance, I will provide regular updates, 
when requested, to the Committee on Natural Resources on our activities 
and progress.

    Again, thank you for allowing me to provide this additional 
information about the challenges and opportunities that we face in the 
CNMI. If you have any additional questions, please let us know.

                                 ______
                                 

    The Chairman. Thank you, Governor.
    I will now recognize Minister Udui, Jr., for 5 minutes of 
testimony. You are recognized.

  STATEMENT OF THE HON. KALEB UDUI, JR., MINISTER OF FINANCE, 
                REPUBLIC OF PALAU, KOROR, PALAU

    Minister Udui. Thank you. Mr. Chairman, distinguished 
Members, it is an honor to be here from Palau. President Whipps 
would be here as he was in the Committee's Task Force hearing 
last month, but he has a long-standing commitment to host more 
than 20 members of the national legislatures of Japan and 
Taiwan today, so he has approved my statement submitted in 
writing and he looks forward to meeting with you in Palau.
    The Compact of Free Association between our nations is 
somewhat unique. It provides the United States can use any land 
it needs for defense. This is why a top U.S. military commander 
has called Palau part of the homeland. We are the western-most 
jurisdiction in which the United States has exclusive strategic 
rights. Our land, sea, and airspace the size of Texas, borders 
Asia and includes shipping lanes critical to China. It is also 
where Chinese vessels have been without authorization.
    The United States is now putting its closest-to-Asia 
earliest-warning radars and extending a runway in Palau. It is 
also considering other facilities. There appears to have been a 
Chinese effort to derail one of the radars through a proposal 
to locate a hotel and casino next door. That proposal was not 
only more attractive to the local community, but it played the 
fears that U.S. military facilities will make Palau a target as 
it was in World War II.
    President Whipps and I want Palau and the United States to 
be inextricably linked, and Palau to continue to stand firmly 
with Taiwan. Continuation, however, cannot be taken for 
granted. China has worked to undermine our relationship and has 
made inroads.
    Another unique aspect of our Compact is that it requires 
periodic joint reviews of the relationship and Palau's needs 
with the U.S. commitment to act on the conclusions.
    The first review agreement in 2010, however, was not 
approved by Congress for 8 years, only because of a dispute 
between the U.S. executives and Congress on how to pay for it. 
China took advantage of the impasse, began to subject Palau to 
economic carrots and sticks to shift our alliances. Tourism is 
our largest industry.
    During the U.S. impasse, China quickly ramped up tourist 
visits from a handful to two-thirds of the 160,000 tourists a 
year. It bought hotel rooms far in advance, crowding out 
visitors from other nations, then it said it would cut off the 
flow if we didn't shift. We didn't shift and it did cut off 
those flows. COVID hit right after. The two blows shrank our 
economy 30 percent in just 5 years, causing real pain for our 
people and eliminating budget surpluses.
    China has offered to send us as many tourists as we can 
accommodate and establish a huge new industry in Palau, but 
again, only if we shift alliances. Tourism from other nations 
is coming back, but slowly. We are working to develop these 
markets and get more flights, but are limited by a runway so 
short that only smaller jets can use it, larger ones have a 
maximum of a 70 percent passenger load.
    We are also working to develop other industries. Meanwhile, 
most private sector investment in Palau is from China. Some of 
our people, including some of our most important leaders, are 
tempted by its offers. They see China as the best opportunity 
for the private sector growth that we want.
    The United States does not have a command economy, but it 
has the Compact and the agreement produced by the second 
review. Enacting the legislation for it by the agreed date of 
September 30, or as soon as possible this year, is the most 
effective way to counter China and maintain U.S. strategic 
interests.
    The agreement has already been approved by Palau's 
Congress. After the experience of the 2010 agreement, a 
significant delay in the new agreement will give those in Palau 
who see a future with China, or who have Chinese connections, 
an opportunity to sow doubt about the United States. A long 
enough delay would be another opportunity for China to affect 
our economy and people.
    Thank you for the opportunity to speak today.

    [The prepared statement of Minister Udui follows:]
   Prepared Statement of the Honorable Kaleb Udui, Jr., Minister of 
    Finance of Palau on behalf of President Surangel S. Whipps, Jr.
    I am pleased to represent President Whipps. He would be here 
himself--as he was for the Committee's Indo-Pacific Task Force hearing 
last month--but he has a long-standing commitment to host more than 20 
Members of the national legislatures of Japan and Taiwan today. So, he 
has asked me to say that he looks forward to meeting you in Palau 
tomorrow.
    To understand Palau's role in the ability of the United States to 
counter China and maintain U.S. strategic interests in the region, one 
must understand the relationship between the U.S. and Palau, including 
its background; Palau's economic and budgetary situation; and China's 
recent actions.
    The relationship began after bloody battles with the Pacific enemy 
in World War Two that decimated Palau but were the final step to 
retaking the then U.S. territory of the Philippines.
    Later, the United Nations entrusted Palau and the other Pacific 
islands that Japan had governed to the U.S. as one of 11 territories to 
develop into a self-governing status.
    This ``trust territory'' was the only one designated as a 
``Strategic'' territory. The designation enabled the U.S. to deny other 
nations access to a region larger than the 48 contiguous States of the 
U.S., including the region's seas and airspace.
    In Palau's case, the area is the size of Texas, borders the 
Philippines and Indonesia, and includes critical shipping lanes. It the 
jurisdiction closest to Asia over which the U.S. has strategic control.
    The U.S. sought to preserve this with financial and domestic 
programs assistance and a U.S. territorial status.
    Palauans wanted a level of self-government not possible under such 
a status, but had grown to admire and feel a deep kinship with the U.S.
    The solution was national sovereignty but in free association with 
the U.S. The U.S. has no closer relationship with any other nation. 
President Reagan, in urging acceptance, said, ``You will always be 
family to us.''
    The Compact of Free Association continued the ability of the U.S. 
to deny forces of other nations access and granted the U.S. land it 
needs for defense and Palau agreement to refrain from interactions with 
other nations that the U.S. says would compromise security. These 
factors prompted a top U.S. military commander to call Palau part of 
``the homeland.''
    The arrangement is vital to a free and open Indo-Pacific.
    The U.S. is now putting its closest-to-Asia earliest-warning radars 
and extending a runway in Palau. It is also considering other air and 
sea port facilities.
    We are committed to having the facilities that the U.S. military 
needs in Palau, but the runway on the island of Peleliu and the radars, 
one of which is on the island of Angaur, have caused concern in Palau, 
and there may have been a Chinese effort to derail the Angaur radar.
    Peleliu and Angaur were the sites of major World War Two battles 
that devastated those islands. The concern is that these new military 
facilities, especially the radars, would make Palau a first `bullseye' 
for a missile attack. When the plans for the Angaur radar were 
announced, there was opposition asserting that there were already plans 
for a Chinese hotel and casino next door, a much more attractive 
development for the community,
    The Compact also provided financial assistance for 15 years, 
primarily through a Trust Fund that was to last for 50 years--but which 
your government and mine now agree was inadequate; a number of domestic 
programs; and free access to the U.S. for our small population.
    It also, however, recognized that adjustments and further 
assistance would be needed over time. So, it required periodic joint 
reviews of the relationship as well as Palau's needs, with a U.S. 
commitment to act on the conclusions. I serve as Palau's Chief 
Negotiator for the second review, the 30th Anniversary Review.
    An Agreement has been reached with the U.S. Executive branch, which 
has submitted a legislative package for it to the U.S. Congress for 
enactment. It was negotiated to take effect October 1st.
    President Whipps strongly supports it, and it has been approved by 
Palau's Congress.
    The legislation would not only improve the relationship for the 
next 20 years; it would enable the relationship to continue afterwards 
for as long as both governments want. It would do this by providing a 
basis for financial and programs assistance continuing after 20 years 
if both governments agree. It would repurpose the Trust Fund for needs 
that would otherwise not be met.
    Palau and the U.S. are `joined at the hip.' Palau also recognizes 
Taiwan's right to exist and stands firmly behind Taiwan.
    Continuation of the relationship, however, be taken for granted. 
The majority of Palauans want to maintain our current alliances, but 
China has worked to change this and has made inroads with some people.
    The 15th Anniversary Review reached agreement in 2010, but its 
legislation was not enacted for eight years, solely due to an impasse 
between the U.S. Executive and Congress on how to pay for it.
    China took advantage of the impasse. Palau continues to be 
subjected to China's substantial economic `carrots and sticks' to shift 
Palau's alliances.
    Tourism is our largest industry. During the U.S. impasse, China 
quickly ramped up tourist visits from a handful to two-thirds of 
160,000 a year. It bought hotel rooms far in advance, crowding out 
visitors from other nations. Then it said it would cut off the flow if 
we did not shift. We didn't, and it carried through on its threat.
    Just before COVID, China offered to send as many tourists as we 
could accommodate and establish a huge new industry in Palau, but again 
only if we shift alliances.
    The pandemic hit right after the Chinese body blow to our economy. 
The combination shrank the economy 30% in just five years, causing real 
pain for our people and eliminating budget surpluses.
    Palau then became the only U.S.-affiliated jurisdiction to not 
receive COVID revenue loss grants. The Federal government gave grants 
to States, territories, Tribes, and municipalities. The Asian 
Development Bank gave grants to the other two freely associated states.
    The ADB only offered us loans because of the previous level of our 
economy. We have had to cut our budget, improve revenues, and borrow 
more than is desirable to continue basic government operations.
    Tourism is coming back, but more slowly than the ADB and other 
economists projected.
    We are working to open other markets and get more flights but are 
limited by a runway so short that only narrow body jets can use it--and 
use it at a maximum of 70% passenger loads.
    We are also working to develop other industries.
    Meanwhile, most of the private sector investment in Palau is from 
China. Palau is only five hours away from Beijing.
    Some of our people, including some of our most important leaders, 
are tempted by Chinese offers. They see China as the best opportunity 
for the private sector growth we want.
    The U.S. does not have a command economy, but it has the Compact 
and the 30th Anniversary Review package. Enacting it by September 30th 
or as soon as possible thereafter is the most effective way to counter 
China and maintain U.S. strategic interests in the region.
    After the experience of the 2010 Agreement not being approved by 
the U.S. Congress until 2018, a significant delay in the approval of 
the current agreement will give those in Palau who see a future with 
China and those with Chinese connections an opportunity to sow doubt 
about the U.S.' interest in our islands. Obviously, if the delay is 
long enough, there will be another opportunity for China to affect our 
economy and people.
    The Agreement's funding is also essential for keeping Palauans in 
Palau instead of moving to the U.S., where they can earn more. When 
they leave, they often have to be replaced by people from other nations 
who do not feel the same identification with the U.S. that most 
Palauans feel.
    Putting the Agreement's provisions into effect and letting the 
State Department bureaucracy take the lead from there, however, will 
not be sufficient over time. Some at State have wanted to treat us like 
nations that exercise all of their sovereignty and do not have Federal 
domestic programs, etc. We have a different status and a uniquely 
closer relationship with the U.S.
    When the Compact was initially approved by the U.S. Congress, your 
Committee insisted on a separate Office of Freely Associated State 
Affairs at State and a meaningfully functioning Interagency Group. The 
Office was established administratively but closed some years later.
    This time, your Committee should lead the Congress in re-
establishing the Office--but by law--with coordinators appointed by the 
Secretaries of Defense and the Interior and reporting to the NSC 
through a senior-level Interagency Group.

                                 ______
                                 

Questions Submitted for the Record to the Hon. Kaleb Udui Jr., Minister 
                     of Finance, Republic of Palau

The Honorable Kaleb Udui Jr. did not submit responses to the Committee 
by the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. The People's Republic of China (PRC) has been seeking 
to increase its influence in the Freely Associated States and other 
Pacific nations by offering economic assistance and PRC led 
infrastructure projects. We have seen that in certain instances that 
assistance from the PRC has had corrosive effects on democratic 
institutions and economies within countries have accepted this 
assistance from the PRC.

    Can you describe how the U.S. economic assistance provided under 
the Compacts have had positive benefits for Palau?

    Question 2. I am encouraged by the reports that the U.S. Department 
of Defense (DoD) will build an Over-The-Horizon Radar facility in 
Palau. This facility will be key to increasing U.S. capacity to detect 
and respond to threats in the region.

    What benefits will this facility and increased U.S. DoD engagement 
have for Palau?

    Question 3. What is your government currently doing to increase 
resiliency and capacity to push back against PRC's attempts to expand 
its influence and exert leverage within Palau?

                                 ______
                                 

    The Chairman. Thank you to the gentleman for your 
testimony.
    I now recognize Acting Secretary Cantero for 5 minutes. You 
are recognized for your testimony.

    STATEMENT OF THE HON. RICKY CANTERO, ACTING SECRETARY, 
DEPARTMENT OF FOREIGN AFFAIRS, FEDERATED STATES OF MICRONESIA, 
                       POHNPEI STATE, FM

    Mr. Cantero. Thank you. Chairman Westerman, Ranking Member 
Teresa Leger Fernandez, members of the House on Natural 
Resources Committee, thank you for convening this hearing today 
and for the opportunity to testify before you today.
    My name is Ricky Francisco Cantero, I am the FSM Assistant 
Secretary of Foreign Affairs. I have had the distinct honor to 
serve my country in its foreign service for the last 24 years. 
On behalf of President Simina, I have the honor to share my 
government's perspectives on the long-standing U.S.-FSM 
partnership, including ways to strengthen our collaboration.
    I begin by confirming the FSM's firm commitment to fulfill 
all of its Compact obligations, including those related to 
security and defense.
    The FSM, of course, follows closely the changing dynamics 
of competition in the Indo-Pacific region. The FSM is committed 
to doing its part to cooperate with the United States to ensure 
that our region, our people, live in a safe and secure 
environment, as enshrined in our Compact.
    The security and defense interests of the United States are 
the security and defense interests of the FSM. The ever-
increasing enlistment of our citizens to serve in the U.S. 
Armed Forces and those that have paid the ultimate sacrifice is 
living testimony to this creed.
    Our relationship with the United States predates the 
establishment of the FSM as a sovereign country, and dates back 
to the period immediately following the second World War.
    When we became a sovereign country in 1986, we gave the 
United States strategic rights of denial over a vast portion of 
the Western Pacific Ocean, with the United States retaining 
responsibility for the security and defense of the FSM. This 
arrangement continues. This responsibility includes the right 
to foreclose military access of other countries to defend the 
FSM and its people from military threats, and the right to 
establish and use military areas and facilities in the FSM on 
agreed terms.
    These steps all provide the United States with access to 
our sovereign territory to protect shared security interests in 
the region. The security and defense elements of the Compact 
has no termination date. The FSM is committed to playing a 
vital role in supporting the U.S. security presence in the 
Pacific and the United States' effort to combat for aggression 
in the region.
    Through our prescribed joint committee meeting, for 
example, the FSM continues to work with the U.S. military in 
identifying ways of strengthening and enriching bilateral 
security engagements on their Compact.
    The FSM conducts its own foreign policy in foreign 
relations in ways that are very consistent with the terms of 
the amended Compact. The FSM maintains the United States as its 
primary partner, while also having diplomatic relations with 
over 90 countries throughout the region and around the world.
    Additionally, the FSM and United States belong to many of 
the same international organizations, including the United 
Nations where the voting practices of the two nations are 
aligned and remain very, very consistent.
    The FSM ties with the United States are strong, ongoing, 
and permanent. Beyond Congress' consideration of the pending 
Compact legislation to extend expiring economic assistance 
provisions until 2043, there are numerous other opportunities 
to enhance our collaboration.
    The FSM welcomes strengthening joint activities with the 
U.S. Department of Defense which, among others, include 
military construction projects in the FSM. For many years, the 
Department of Defense deployed Civic Action Teams in the FSM to 
support the initiatives on our islands.
    Knowing that the CAT program lapsed in 2003, the FSM is 
pleased to see U.S. congressional efforts advocating for its 
restoration.
    Similarly, the FSM fully supports ongoing efforts that we 
hope will lead to restoring the U.S. Peace Corps program in the 
FSM, an essential program in direct support of people-to-people 
engagements. These kinds of initiatives are very important to 
strengthening and enriching our existing ties with the United 
States.
    We look forward to working with the Committee on ways to 
enhance our enduring partnership with the United States. We 
hope the U.S. Congress approves the Compact legislation 
expeditiously to usher in the next chapter of the enduring FSM-
U.S. Compact partnership.
    Mr. Chairman, I thank you for this opportunity to testify 
and I look forward to answering questions. Thank you so much.

    [The prepared statement of Mr. Cantero follows:]
     Prepared Statement of Mr. Ricky F. Cantero, Acting Secretary, 
     Department of Foreign Affairs, Federated States of Micronesia
    Thank you for convening this hearing today and for providing me the 
opportunity to testify before you this morning. As permanent custodians 
of this vast oceanic region, we are pleased to welcome you to our 
peaceful part of the world.
    My name is Ricky Francisco Cantero. I am first a long-time public 
servant for the FSM--proudly serving my country as the Deputy Secretary 
of Foreign Affairs and, in the context of today's hearing, as the 
Acting Secretary of Foreign Affairs. I have had the distinct honor in 
serving my country in the field of diplomacy for the last 24 years.
    On behalf of President Wesley Simina, I have the honor to share my 
government's perspectives on the long-standing U.S.-FSM partnership, 
perspectives on opportunities to strengthen collaboration between our 
two sovereign nations and, perhaps, to share perspectives on the 
ongoing and progressive military cooperation that exists between our 
two governments.
    Towards this end, I proudly submit to this Committee FSM's firm and 
concrete commitment in fulfilling its Compact Treaty obligations--
obligations that are necessary to support the advancement of the United 
States' military readiness in our region.
    Indeed, the FSM is not oblivious to the rapid changing dynamics of 
geo-strategic competitions that, not only lingers, but continues to 
spread throughout the INDO-PACIFIC region. Being surrounded by the 
world's most consequential relationships, behooves both our sovereign 
countries to reflect on regional challenges of mutual interests. In 
doing so, I submit the strong commitment of the FSM in performing its 
part to ensuring that our region and our people live in an environment 
that is safe--an environment that is secured. Whether bilateral, 
regional or global, the FSM has and will continue to stand ready to 
support security and defense interests of the United States. Your 
Interest is Our Interest; Your Protection is our Protection; Our Home 
is Your Home. The ever-increasing enlistment of our citizens to serve 
in the US Armed Forces and those that have paid the ultimate sacrifice 
is a strong testimony to this creed.
    The FSM is dedicated to its strategic partnership with the United 
States, which has always been our most steadfast and consequential 
ally. The FSM and U.S. relationship predates the establishment of the 
FSM as a sovereign country.
    The origins of this relationship are based on strategic defense 
interests following World War II, when the U.S. administered the Trust 
Territory of the Pacific Islands, a region that includes the present 
day-FSM. Our Compact Treaty with the U.S. reflects both the FSM's 
emergence as a sovereign nation in 1986 and our unwavering commitment 
to the U.S. and the peace and security of the region. Under the Compact 
Treaty, the U.S. has been granted strategic rights of denial over a 
vast portion of the western Pacific Ocean and the U.S. Government 
retains responsibility for security and defense matters in or relating 
to the FSM.
    This responsibility includes, among others, the obligation to 
defend the FSM and its people from third-party military threats, the 
option to foreclose access to military personnel from other countries, 
and the right to establish and use military areas and facilities in the 
FSM, on agreed terms. The FSM provides the U.S. with access to our 
sovereign territory to protect shared security interests in the region. 
The security and defense elements of the Compact Treaty are also core 
pillars of our enduring relationship--core pillars that DO NOT have a 
termination date.
    As the U.S. Administration recently articulated, ``the Compacts of 
Free Association agreements form the bedrock of America's broader 
strategic interests and engagements in the Indo-Pacific, are key to the 
national security of the United States, and underpin our important 
bilateral relations with these partner nations.''
    The FSM is proud to play a vital role in supporting the U.S. 
security presence in the Pacific region and the United States' efforts 
to combat foreign aggression in the region. Through our prescribed 
annual Joint Committee Meeting, the FSM continues to work 
collaboratively with the US military in identifying ways of 
strengthening and enriching bilateral security engagements, under the 
overall Title III spectrum of security and defense. Among many other 
initiatives, this also includes FSM's Treaty commitment to provision 
our precious and limited land to support interests of the US military 
to establish military defense sites on our soil.
    The FSM conducts its own foreign relations in ways that are very 
consistent with the terms of the Amended Compact Treaty. The FSM 
maintains the U.S. as its primary partner while also having diplomatic 
relations with over 90 countries throughout the region and around the 
world--thus, providing true testimony to our constitutional creed of 
extending to all nations what we seek: Peace, Friendship and 
Cooperation, and Love in our Common Humanity.
    Additionally, the FSM and U.S. belong to many of the same 
international organizations, including the United Nations, where voting 
practices of the two nations are aligned and remain extremely 
consistent.
    The FSM remains firmly dedicated to its strategic partnership with 
the U.S. and looks forward to the continuation of this dedication far 
into the future, through the renewal of economic assistance during the 
next 20-year Compact period.
    The FSM and U.S. ties are strong, ongoing and will always 
persevere. Beyond Congress' consideration of the Compact renewal 
legislation to extend expiring provisions for 2023 to 2043, there are 
also limitless opportunities for enhanced collaboration at all levels.
    The FSM welcomes intensification of joint activities with the 
Department of Defense which, among many others, includes planned 
military construction projects in the FSM. For many years, the 
Department of Defense deployed Civilian Action Teams (CATs) in the FSM 
to support civil engineering initiatives on our islands.
    Noting that the CAT program was lapsed in 2003, the FSM is pleased 
to see recent U.S. congressional efforts advocating for its 
restoration. Similarly, the FSM fully supports ongoing efforts to 
restore the U.S. Peace Corps program in the FSM--an essential program 
in direct support of people-to-people engagements. Among many others, 
Mr. Chairman, these are few initiatives that very important to 
strengthening and enriching our existing ties with the U.S.
    We look forward to working with the Committee on ways to enhance 
our enduring partnership with the U.S. and on efforts to advance the 
Compact legislation, expeditiously; And, to bring into existence a new 
chapter in the FSM/US Treaty partnership.
    Thank you again for the opportunity to testify and I look forward 
to answering a few questions.

                                 ______
                                 

 Questions Submitted for the Record to the Hon. Ricky Cantero, Acting 
      Secretary of Foreign Affairs, Federated States of Micronesia
            Questions Submitted by Representative Westerman
    Question 1. The People's Republic of China (PRC) has been seeking 
to increase its influence in the Freely Associated States and other 
Pacific nations by offering economic assistance and PRC led 
infrastructure projects. We have seen that in certain instances that 
assistance from the PRC has had corrosive effects on democratic 
institutions and economies within countries have accepted this 
assistance from the PRC.

    Can you describe how the U.S. economic assistance provided under 
the Compacts have had positive benefits for the Federated States of 
Micronesia?

    Answer. The FSM is grateful for the unwavering economic support 
provided by the United States under our Compacts of Free Association 
first entered into force in 1986. The United States is far and away our 
primary partner. U.S. support is critical to the FSM's economic 
development and progress toward self-sufficiency. Our strategic and 
economic relationships with the United States are central to our 
Nation.
    The majority of the financial assistance being offered by the U.S. 
are in seven sectors the two countries have identified together as 
essential to our continued growth and future self-sufficiency: 
education, health care, public infrastructure, environment, public 
sector capacity building, private sector development, and enhanced 
reporting and accountability. U.S. assistance under these sector grants 
has, for example, helped us provide educational opportunities for FSM 
children, provide medical care in our hospitals, and develop and repair 
our infrastructure, including our roads, ports and bridges.
    Beyond this grant assistance, numerous U.S. federal agencies 
provide programs and services in the FSM, including the Federal 
Aviation Administration, National Oceanic and Atmospheric 
Administration, U.S. Postal Service, Small Business Administration, 
Departments of Agriculture, Defense, Education, Health and Human 
Services, Interior, Homeland Security, and State. The Bank of the FSM, 
which has been FDIC-insured since 1986, is essential for our banking 
and economic sector. We have relied on USPS service to our government 
since World War II and do not have the capacity or funding to replace 
USPS. The FSM is highly vulnerable to natural disasters and relies on 
U.S. support for preparedness and recovery. U.S. assistance also helps 
build FSM's resilience on environmental and climate issues. These are 
all essential for our Nation and our people. The U.S. also provides 
other programs and services that we cannot provide on our own, such as 
judicial training for our court systems.
    At this stage in our development, roughly half of key government 
services in the four FSM states are funded by the U.S. through the 
Compact. A funding lapse at the end of September 2023 of these sector 
grants and other support would create an unprecedented economic and 
political crisis for our country and our people, and would have a 
destabilizing effect on the region as a whole. The consequences for our 
Nation would be catastrophic.
    The FSM receives support from many international supporters, 
including the EU and countries in the region (China, Japan, and 
Australia, etc.). While China has periodically provided infrastructure 
support to the FSM, this support has been minor compared to the broad 
infrastructure, economic development and other assistance we have 
received from the United States. We are fully transparent with the 
United States about assistance we receive from the PRC and all other 
countries. The FSM is grateful to the United States for its crucial 
economic support as our primary economic and strategic partner.

    Question 2. What is your government currently doing to increase 
resiliency and capacity to push back against PRC's attempts to expand 
its influence and exert leverage within the FSM?

    Answer. Under the U.S.-FSM Compact of Free Association, the U.S. 
Government has full authority and responsible for security and defense 
matters in or relating to the FSM. This responsibility includes the 
obligation to defend the FSM from attack, the option to foreclose 
access to military personnel from third countries, and the right to 
establish and use military areas and facilities in the FSM on agreed 
terms. These reciprocal commitments do not have any termination date.
    The FSM is committed to playing a vital role in supporting the U.S. 
security presence in the Pacific region and the United States' efforts 
to combat foreign aggression in the region. Through our prescribed 
annual Joint Committee Meeting, for example, the FSM continues to work 
with the U.S. military in identifying ways of strengthening and 
enriching bilateral security engagements, under the Compact. The U.S. 
Embassy in the FSM includes a U.S. military attache in constant 
communication and coordination with our government. U.S. military 
personnel frequently visit and stay in the FSM. Most recently, the U.S. 
Department of Defense expressed an interest in using Yap State's 
airport and seaport facilities for U.S. military operations when 
needed. We welcome the U.S. decision to undertake these kinds of 
improvements and projects throughout the FSM to facilitate capacity for 
U.S. military operations and humanitarian response. This fall, about 
100 U.S. Marines will spread out across Yap, Chuuk, Pohnpei, & Kosrae 
for small scale construction, medical, communications, and community 
engagement projects. We welcome these and any future opportunities to 
enhance cooperation with the U.S. military under the Compact.
    The FSM conducts its own foreign relations in ways that are 
consistent with our commitments under the Compact. We have diplomatic 
relations with over ninety countries throughout the region and around 
the world, including the PRC. In this connection, we are very conscious 
of the PRC's efforts to expand its influence and leverage in all 
Pacific countries, including ours. Our sweeping partnership with the 
United States--both strategic and economic--provides us resources and 
wherewithal that many other developing countries lack when approached 
by the PRC. Our infrastructure assistance from the PRC (consisting of 
periodic construction projects) is dwarfed by the vast and crucial 
assistance provided by the United States in infrastructure and the 
other six sectors covered by our Compact, including health and 
education. We have never taken loans from the PRC and do not engage 
with the PRC on any strategic or defense issues.
    One ongoing concern of the FSM is in the control of our waters, 
which is essential to our economy and for which we are particularly 
grateful for U.S. support. The FSM appreciates the long-standing 
cooperation between the United States on illegal, unreported and 
unregulated (IUU) fishing in its waters. The FSM appreciates the 
support it has received from the U.S. Coast Guard on these issues and 
values its cooperation with the Coast Guard in the shiprider program. 
The assistance we received is helpful to all illegal fishing activity, 
including nationals of China or other countries who seek to fish in our 
waters.

                                 ______
                                 

    The Chairman. Thank you, Secretary Cantero.
    I now recognize Minister Ading for 5 minutes.

 STATEMENT OF THE HON. JACK ADING, MINISTER OF FOREIGN AFFAIRS 
    AND TRADE, REPUBLIC OF THE MARSHALL ISLANDS, MAJURO, MH

    Minister Ading. Thank you, Chairman Westerman [Speaking in 
Marshallese]. Mr. Chairman and distinguished members, thank you 
for inviting President Kabua or a designee to this important 
hearing. It is extremely time consuming to travel here and back 
from Marshall Islands, so I am representing my President. 
President Kabua and his cabinet look forward to meeting with 
you next week.
    Under the Free Association between our nations, the RMI 
allows the United States to deny access to forces of other 
nations to an area west of Hawaii, as big as Alaska, 
California, and Florida combined; refrain from interactions 
with other nations that the United States says would comprise 
security; and hosts what the Joint Chiefs of Staff say is the 
world's premiere range for testing ICPMs and supporting 
military space operations.
    Kwajalein is where the military perfected its missile 
strike to be so precise that a shot can hit a single house 
thousands of miles away. RMI is also a staunch ally of Taiwan.
    During the U.S. administration of our islands, we also 
served U.S. strategic interests worldwide by the United States 
using our islands for most of all of its atmospheric nuclear 
bomb tests. The United States perfected its nuclear weapon in 
our islands. It also sent radioactive waste from tests in 
Nevada to our islands. The detonations in our islands were 
equivalent to 1.7 Hiroshi bombs every day for 12 years. The 
radioactive iodine was 42 times that in Nevada and 150 times 
that from Chernobyl.
    The U.S. Senate has just passed legislation to expand the 
Radiation Exposure Compensation Act to cover the health 
problems from the Marshall test, but only for residents of 
Guam.
    At the same time, the United States recognized that only 4 
of our 29 atolls were affected. Before the United States' 
biggest bomb test ever, U.S. officials learned that winds would 
blow radioactive to inhabited Rongelap. They went ahead anyway. 
About 70 percent of the children under 10 developed thyroid 
tumors. Several women from Rongelap gave birth to babies 
without spines. Other babies were stillborn or born without 
limbs on the atoll that the United States has not recognized 
they were contaminated.
    The people of Bikini, where I am from, Rongelap, and Utrik 
were forced to leave their islands, but resettled based on U.S. 
assurance it was safe, only to find out years later that no 
local food could be safely consumed due to high levels of 
radiation.
    Some of the islands of Bikini, Enewetok, and many others 
remain unsafe for habitation today.
    The United States administers us in trust for the UN.
    When the Security Council expressed concern about plans to 
test in Enewetok, President Truman wrote, and I quote, ``The 
Enewetokese will be accorded all rights which are the normal 
constitutional rights of the citizens under the Constitution 
but will be dealt with as wards of the United States for whom 
this country has special responsibilities.''
    The settlement for the Marshallese, many of whom have been 
exiled from home for most the century, is a fraction of the 
billion paid to compensate Americans who lived hundreds of 
miles from the Nevada test. The sad fact is that the United 
States has fallen far short treating us equally, fairly, and 
consistently with the Compact.
    The RMI highly values our Free Association and want it to 
continue. Unresolved problems from the nuclear test and 
radioactive waste is a serious irritant in our relations and 
has the potential for being exploited by China.
    The Compact Agreement would not solve the issue, but it 
would be an important step in doing so.
    Thank you [Speaking in Marshallese].

    [The prepared statement of Minister Ading follows:]
  Prepared Statement of the Honorable Jack Ading, Minister of Foreign 
               Affairs and Trade of the Marshall Islands
    Thank you for inviting President Kabua to testify or send a 
designee to the Committee's hearing in Guam on the importance of U.S. 
territories and the Freely Associated States to the United States' 
ability to counter China's malign influence and maintain U.S. strategic 
interests. It is extremely time-consuming to travel from the Marshall 
Islands to Guam and back, primarily because of limited flights, but 
this hearing is of the highest importance to the Marshall Islands. So, 
I have the honor of representing the President, who looks forward to 
meeting with you in a few days.
    We can only speak regarding the role of the Republic of the 
Marshall Islands (RMI), of course, and the issues in our islands that 
undermine U.S. interests and create vulnerabilities to China.
    The role starts with the RMI having a relationship with the U.S. 
that is much closer than any that which the U.S. has with nations with 
which it is not freely associated.
    A Compact of Free Association, subsidiary agreements, and U.S. laws 
that amended and added to the Compact define the relationship. More 
fundamentally, however, the relationship is based on shared values and 
the great extent to which these were developed during four decades of 
U.S. administration of our islands.

    Under the relationship, the RMI--

     Allows the U.S. to deny access of forces of other nations 
            to an area west of Hawaii that is as large as Alaska, 
            California, and Florida combined;

     Refrains from interactions with other nations that the 
            U.S. says would compromise security; and

     Hosts what the U.S. military Joint Chiefs of Staff have 
            categorized as the world's premiere range for testing 
            Inter-continental Ballistic Missiles and supporting the 
            military's new space operations at Kwajalein Atoll. This is 
            where the U.S. military perfected its missile strikes to be 
            so precise that shots can hit a single house from thousands 
            of miles away and where the U.S. military continues to 
            develop its ICMB shot capabilities.

    Additionally, the RMI generally votes with the U.S. in the United 
Nations.

    Also--and perhaps most importantly--enlistment rates in the U.S. 
military from the RMI are higher than from any State, although the U.S. 
has not yet provided for standard care of veterans if they come back to 
the RMI. Many, therefore, do not, depriving the RMI of talent it needs.
    Further, the RMI is a staunch and enduring ally of Taiwan, which is 
important to countering China's malign influence and maintaining U.S. 
strategic interests in the region.
    The RMI highly values its relationship with the U.S. and wants to 
strengthen it so that it can continue.
    During U.S. territorial administration of the Marshall Islands, two 
of the most important roles that our islands had and continue to have 
in preserving U.S. strategic interests worldwide and countering Chinese 
influence in the Pacific were initiated by the U.S.
    The first was most of the atmospheric testing of nuclear bombs that 
the U.S. has conducted. The U.S. perfected its nuclear weapons 
capability in our islands.
    In the process and after, however, even more of all of the 
radioactive waste that U.S. produced in atmospheric nuclear bomb tests 
than the waste from tests in the Marshall Islands was left in the RMI--
making populated and what had been populated atolls even more unsafe, 
because the U.S. shipped in radioactive waste from weapons testing in 
Nevada when it administered our islands.
    Fallout from the testing; the radioactive waste; inadequate and 
irresponsible efforts to bury the waste and not sufficiently cleaning 
up waste--which generated terrible health problems for people and made 
populated and what had been populated atolls unsafe; a lack of health 
care; and the U.S. not fulfilling its obligations in connection with 
the testing created the paramount issue that the Marshall Islands has 
with the U.S. and could undermine the relationship. I will explain this 
major and multi-faceted issue further later in my statement.
    The second role that the RMI serves in maintaining U.S. strategic 
interests around the world and countering malign Chinese influence in 
the region is the major U.S. military facility that the RMI hosts on 
Kwajalein, which you are scheduled to visit when you reach the RMI. The 
ICBM testing has also created problems in the RMI, but we continue to 
host the base in keeping with the RMI's commitments to the U.S.
    Regarding Chinese efforts to get the RMI to shift its alliances, 
one example relates to the second largest portion of our private sector 
and a major contribution to the RMI's economy and budgets. This is the 
RMI being one of the three largest ship registries in the world. China 
charges vessels flying our flag significantly more to dock at its ports 
than it charges the other two.
    Another effort has tried to financially shift the positions of RMI 
leaders on the RMI's alliances.
    The RMI, however, is now concluding negotiations with the U.S. on 
financial and Federal programs assistance needed to enable the 
relationship to continue and counter Chinese efforts that could 
undermine it.
    This assistance is vital to the RMI. It is urgently needed as of 
October 1st since most crucial assistance is due to expire September 
30th.
    It is provided for in legislation that the U.S. Executive branch 
has submitted for congressional approval and emphasized the need for in 
anticipation of underlying agreements. The representatives of the 
presidents of the RMI and the U.S. are working to conclude these 
agreements before Congress goes back into session.
    The precursors to the negotiations included meetings with our 
president requested by President Trump in the Oval Office and with 
Secretary of State Pompeo. The importance of the talks has also been 
highlighted by statements and actions of President Biden.
    The U.S. initiated the negotiations just over three years ago, but 
the talks really started to become productive at the end of 2021 with 
the engagement of senior U.S. National Security Council staff and the 
March 2022 appointment of a presidential envoy on top of much lower-
level departmental officials.
    When the U.S. initiated the negotiations, it asked the RMI to 
identify its priorities. From the first, President Kabua and the people 
of the RMI emphasized justice related to unresolved issues from the 
U.S. nuclear weapons legacy as being of the highest priority.
    Another was challenges related to rising seas, which threaten the 
existence of a nation with no elevation higher than two meters. As U.S. 
strategic control over the area of the RMI is based on our land 
borders, this is also a national security threat for the U.S.
    Other priorities included the living conditions of the people who 
work at the Kwajalein base but live elsewhere on the atoll and impacts 
on nearby islands as well as financial and Federal program needs.
    The biggest issue dividing our nations, which has the potential for 
being exploited by China and undermining U.S. strategic interests in 
the RMI, consists of serious, unresolved problems lingering from the 
U.S. nuclear weapons legacy.
    I know that the purpose of this hearing is to discuss China's 
malign influence in the region and in our islands and preserving U.S. 
strategic interests, but the Committee should understand the context of 
these issues and how not adequately addressing RMI issues lends itself 
to increasing that malign influence and undermining U.S. interests.
    Americans are an exceedingly decent and generous people. I am 
certain that most would be shocked and embarrassed if they were to 
learn about the history and legacy of the nuclear testing program while 
we were governed by the U.S.
    In appointing the U.S. as trustee for the Marshall Islands, the 
U.N. gave the U.S. the responsibility to protect us and promote our 
well-being.
    When plans for nuclear bomb testing at Enewetak Atoll began to be 
implemented, the U.N. Security Council expressed concern. It was told 
by President Truman that, ``The Enewetakese will be accorded all rights 
which are the normal constitutional rights of the citizens under the 
Constitution but will be dealt with as wards of the United States for 
whom this country has special responsibilities.''
    This was a promise that was never kept, as the people of Enewetak 
languished in impoverished exile for 33 years in the previously 
uninhabited atoll of Ujelang, the most remote atoll in the Marshall 
Islands. It was inconsistent with America's role as trustee to 
desecrate our homeland by massive nuclear explosions for 12 years, 
exposing us to deadly, horrific health and environmental hazards that 
we were never warned about--and that continue to affect us to this day.
    The nuclear detonations in the Marshall Islands had an explosive 
yield equivalent to roughly 1.7 Hiroshima-sized bombs per day over the 
entire 12 years of testing. In terms of radioactive iodine alone, 6.3 
billion curies of iodine-131 were released during the U.S. nuclear 
testing program--42 times greater than in all of the atmospheric 
testing in Nevada, 150 times greater than released by the Chernobyl 
breach, and 8,500 times greater than released from Atomic Energy 
Commission operations at Hanford, Washington.
    Preparing for a 1954 test at Bikini Atoll--one that would result in 
the largest U.S. nuclear detonation ever--U.S. military officials 
learned that a change in wind patterns threatened to bring fallout to 
inhabited Rongelap and Utrik atolls, including others that had not been 
evacuated. They went ahead with the test anyway without warning the 
islanders, who were blanketed in radioactive fallout and had no idea 
what it was or that it was dangerous.
    Almost 70 percent of the children on Rongelap Atoll who were under 
10 years old at the time of the blast eventually developed thyroid 
tumors. And many women from several atolls, Rongelap and Utrik for 
example, later gave birth to babies who resembled jellyfish and peeled 
grapes, incidents similar to mothers in Utah who were downwind from the 
Nevada test site. Some died at birth or after a few hours of life. Many 
other women had miscarriages.
    The people of Rongelap, Utrik and others from the Marshall Islands, 
did indeed become human guinea pigs under a secret radiation study of 
their bodies, code named ``Project 4.1.'' And these studies were done 
without their consent or knowledge.
    The people of Bikini, Enewetak, Rongelap and Utrik were forced to 
leave their islands. And were exiled from their atolls and eventually 
returned home based on U.S. assurances that it was safe--only to find 
out years later that radiation levels were too high, and no local food 
could be consumed. Some of the islands of both Bikini and Enewetak were 
completely vaporized. Many others remain unsafe for human habitation 
today--and will be for as long as anyone can imagine. Today, people of 
Bikini and Rongelap cannot return to their atolls due to high radiation 
contamination of their land, food, and environment.
    The damage to our environment and our health caused by the U.S. 
nuclear testing program are not just a part of our history: They 
continue to plague us even today.
    For example, the people of Enewetak have lived in the shadow of a 
massive nuclear waste dump for over four decades. That waste dump, 
known as Runit Dome, contains 110,000 cubic yards of radioactive waste 
gathered from around the atoll decades after the nuclear weapons tests. 
The waste includes tons of plutonium-239 with a radioactive half-life 
of 24,100 years.
    The U.S. Department of Energy admits that radioactive material is 
leaking from Runit Dome into Enewetak's lagoon, but we were told not to 
worry because the radioactive material already in the lagoon dwarfs the 
amount of radioactive material buried under Runit Dome. We need the 
U.S. to tell us: What are the health risks of living on the shores of a 
lagoon with a larger amount of radioactive material than the infamous 
Runit Dome nuclear waste dump?
    The settlement for the Marshallese, many of whom are still exiled 
from their home islands nearly three-quarters of a century after the 
nuclear testing program began, is a tiny fraction of the billions of 
dollars that have been paid to compensate Americans living downwind--
some several hundred miles downwind--of the Nevada Test Site under the 
Radiation Exposure Compensation Act (RECA). This disparity shows that 
the U.S. has fallen far short of the ideal of equality in our case.
    The U.S. Senate has passed legislation that would expand RECA 
eligibility for compensation from the Marshall Islands nuclear tests 
but only to residents of Guam. We applaud this action and the 
realization that U.S. atmospheric nuclear testing in the Marshall 
Islands had consequences beyond the Four Atolls that the U.S. has 
recognized. The imitation to the four atolls in the RMI is belied by 
overwhelming scientific, radiological and health evidence and 
consequences to the contrary.
    All of this provides opportunity for the PRC to create mischief in 
our relationship and numerous attempts to undermine the very close 
relationship that my country enjoys with Taiwan. This isn't necessary, 
and while we will work to complete our negotiations with the U.S. to 
extend the Compact, we must remember that the nuclear issue must be 
addressed to retore the confidence of the Marshallese people in the 
United States.

                                 ______
                                 

Questions Submitted for the Record to the Hon. Jack Ading, Minister of 
      Foreign Affairs and Trade, Republic of the Marshall Islands

The Honorable Jack Ading did not submit responses to the Committee by 
the appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. The People's Republic of China (PRC) has been seeking 
to increase its influence in the Freely Associated States and other 
Pacific nations by offering economic assistance and PRC led 
infrastructure projects. We have seen that in certain instances that 
assistance from the PRC has had corrosive effects on democratic 
institutions and economies within countries have accepted this 
assistance from the PRC.

    Can you describe how the U.S. economic assistance provided under 
the Compacts have had positive benefits for the Republic of the 
Marshall Islands?

    Question 2. What is your government currently doing to increase 
resiliency and capacity to push back against PRC's attempts to expand 
its influence and exert leverage within the RMI?

                                 ______
                                 

    The Chairman. Thank you, Minister Ading, and thank you to 
all of the witnesses for your testimony.
    Minister Ading, I do have a large Marshallese population in 
my home state of Arkansas and really enjoy getting to interact 
with those folks when I am back home.
    That concludes our witness testimony. We are now going to 
move to our Member questions. Each Member will be recognized 
for 5 minutes, and we are going to start with the gentleman 
from Colorado. Mr. Lamborn, you are recognized for 5 minutes.
    Mr. Lamborn. I want to thank Chairman Westerman and also 
the leadership of my colleague on the House Armed Services 
Committee, Congressman Jim Moylan. Representative Moylan is a 
tireless advocate for Guam in Congress.
    Hafa Adai to all of the distinguished panelists and all of 
the members of the audience, and thank you for being part of 
today's Natural Resources Committee oversight hearing.
    As some of the panelists have noted, we have traveled 
thousands of miles to show our support of the strategic value 
of the Pacific Islands in protecting U.S. interests and human 
rights, in general, and free trade in the Indo-Pacific region.
    As a beacon for democracy and a strategically important 
counter to Beijing, the United States needs to increase its 
support of our Pacific Island territories and our treaty 
partners.
    Governor Guerrero, I am going to ask my first question to 
you. In your testimony, you note the Chinese Communist Party's 
intent to project power onto Guam and her sister islands, and 
you described that very well. We have all recently become aware 
of the CCP's cyber-attack on telecommunication systems in Guam 
via their Volt Typhoon actor. Can you describe any other 
malicious tactics that you have witnessed that the CCP has 
undertaken to challenge U.S. military interest in this entire 
region.
    Governor Guerrero. Thank you very much, Congressman. I have 
not witnessed anything, nor have I had any official reports 
about Chinese attacks. There have been, I think, reports in the 
paper and in articles, but not anything officially written to 
me. But be that as it may, we do understand and recognize this 
great threat of our cyber security.
    During the typhoon, we witnessed and experienced a shutdown 
of communications. Our radio stations were not on, our 
telecommunications were not on, we had no means of 
communicating with each other. That was the feeling of 
paralysis for me, and it was a very scary feeling because I 
could not even talk to my frontliners or my frontline defense 
people, or even communicate with my family, and just think 
about what that means in terms of life, in general.
    So, we very much experienced what I think could happen if 
there is a big Chinese cyber security attack. Can you imagine 
if our airport and our Port Authority is paralyzed because of 
those attacks? We would not be able to survive.
    And although we have not had a real experience of that 
through China's cyber security attack, we experienced it during 
the typhoon and after the typhoon.
    So, what we are doing, as a government, is we are creating 
a cyber security island wide emergency plan, and we are working 
with very key stakeholders in business and public sectors. We 
have directed our government agencies, specifically, to 
establish their cyber security plan which will filter up toward 
our island-wide security----
    Mr. Lamborn. Thank you, I appreciate that, and I am going 
to have to ask another question before my time runs out. I 
appreciate that answer, though. There are so many things that 
we could point to that the Chinese Communist Party is doing to 
suppress other people when they don't get their way. The 
suppression of human rights and political rights in Hong Kong 
against what they had promised that they would do when the U.K. 
withdrew, a genocide against the weaker population in western 
China, theft of intellectual property, debt diplomacy, and then 
there is illegal fishing. What experience do any of the other 
witnesses here have of illegal fishing in your territorial and 
sovereign waters.
    Mr. Cantero. Thank you, Congressman. With respect to your 
question, Congressman, the FSM appreciates the long-standing 
cooperation with the United States on any and all illegal, 
unreported, and unregulated fishing in its waters. For example, 
the FSM appreciates the support it has received from the U.S. 
Coast Guard on these issues and values its cooperation with the 
U.S. Coast Guard in the new Expanded Shiprider Program. The 
assistance we receive is helpful to all illegal fishing 
activities.
    In a nutshell, the support that we get from your side, 
especially from the U.S. Coast Guard, is very, very critical. 
We just went through an annual joint committee meeting with 
your military. We do it on an annual basis and we review the 
defense strategic posturing in this region, and one of the 
issues that we always, always discuss is how do we counter 
illegal fishing, and that is one of the primary reasons we 
agreed to the Expanded Shiprider Agreement.
    Mr. Lamborn. Excellent. Thank you so much.
    Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back.
    The Chair now recognizes the gentleman from the Northern 
Marianas. Mr. Sablan, you are recognized for 5 minutes.
    Mr. Sablan. Thank you very much, Mr. Chairman. And I will 
say I am very grateful that you and our colleagues have taken 
the time to come out here. I know it is a big chunk of your 
August break, but thank you very much. Welcome to our 
witnesses, good morning, para todos hamyu [good morning to you 
all].
    Governor Palacios, I am going to sort of stick with you for 
now, sir. You mentioned Covenant 702. We, obviously, have a 
problem with our workforce. Construction is a major issue with 
us. How much in projects do you estimate are not moving because 
of----
    Governor Palacios. As of today, we have an estimate, that I 
know of, of over a half billion dollars already approved.
    Mr. Sablan. And that requires just a technical change in 
some of the legislation, but it is important that we get these 
things moving. You mentioned an issue of touchback. How many 
businesses are affected this year by this touchback issue.
    Governor Palacios. I can assure you that there are over 60 
percent, maybe more, of our businesses, all the hotels, all the 
construction companies. So, all the projects are going to be 
impacted.
    Mr. Sablan. And the Covenant Section 702, it was a really 
wonderful section in the beginning, even had capital 
improvement funds and everything. We had a little money up 
front for operations. What do you want Congress to do?
    Governor Palacios. Consider not necessarily changing where 
we are at today regarding the Covenant 702, but consider 
putting aside another $10 to $20 million just to set aside for 
operations of our government in case we run into problems 
again. That is where we are at today, and, thankfully, there is 
a clause in the agreement and that gives us a little bit of 
flexibility today.
    Mr. Sablan. Governor, thank you very much. Because, look, 
some of you who know me well enough know that I have been quiet 
about the Northern Marianas' relationship with the Peoples' 
Republic of China. I have been quiet about that for a while. We 
had a trade with China, but I am now concerned that there have 
been some things that have happened here in our region, for 
example, not necessarily the people of China, but of course the 
government, CCP and PRC, and concerned enough that I have 
actually taken a stance and said, look, I will join this task 
force and work with trying to also get our Micronesian brothers 
and sisters fairly treated.
    Thank you to the Minister and the Secretary.
    Mr. Ading, it is nice to see you again, sir. Governor 
Guerrero.
    Mr. Udui, do you have anything more to add? I think I have 
time, right? No, I don't.
    The Chairman. You have time.
    Mr. Sablan. Oh, yes? Minister, do you have anything you 
would like to say? Don't worry, these people know, sir, that we 
are family and that as family, you and I are allowed to talk 
about them behind their back.
    [Laughter.]
    Minister Udui. Not to say that I would do that, but thank 
you for the opportunity to add. And I think the realities are 
evident when you are able to visit our islands yourself and see 
firsthand what exactly we are dealing with.
    To Congressman Lamborn's question on fishing, Palau has 
closed off our waters to commercial fishing because it is just 
too impossible to regulate. And we appreciate the United 
States' help in patroling our waters and to counter intrusions, 
unauthorized access that survey our undersea fiber optic 
cables.
    But the other point, Congressman Sablan, is that this is 
not something that happens periodically, it happens every day, 
and it happens at different levels. We have a Federal system, 
it happens at the state levels and with our state legislatures, 
as well as our state executive officials, are approached almost 
every day. So, it is something that we have to be mindful of 
and address as part of the routine order of business every day. 
Thank you.
    Mr. Sablan. Thank you. My time is over.
    The Chairman. The Chair now recognizes the gentlelady from 
American Samoa. Ms. Radewagen, you are recognized for 5 
minutes.
    Mrs. Radewagen. Talofa. Let me first thank my Chairman, Mr. 
Westerman, for appointing me to serve as Chair of the House 
Natural Resources Committee's bipartisan Task Force on the 
Indo-Pacific. Thanks also to Chairwoman Hageman.
    As a prelude to today's proceedings, we conducted a task 
force hearing in July on PRC, COFA, and the territories with 
the valued support and leadership of task force Co-Chair, 
Kilili Sablan. This hearing truly is a homecoming for me, 
having lived here and graduated from the University of Guam, 
but this hearing is also about the Marshall Islands where my 
family lived for years when my father was appointed head of 
Government under the administration of President Eisenhower and 
Interior Secretary Seaton in the darkest days of the Cold War.
    And at that time, the shadowy world of creeping communist 
totalitarianism was nightmarishly illuminated by ominously, 
frightful, over-the-horizon flashes emanating from 67 nuclear 
weapon tests in the Marshalls. And shortly before my father was 
sent to take first steps to restore a post-nuclear testing 
civil order, which literally included his own footsteps across 
atomic bomb craters on his inspection at Bikini and Enewetok.
    And we meet here in the southern-most of the Mariana 
Islands to hear from the Governor of the northern-most of the 
Mariana Islands where my family lived for 12 years while my 
father represented President Kennedy and Secretary of the 
Interior Udall in relations with the Northern Marianas, 
Marshall Islands, Palau, Yap, Pohnpei, Chuuk, and Kosrae.
    So, I join this homecoming with my father's spirit close in 
my heart and in my mind, aware that much of it was in the Cold 
War era under the UN trusteeship. Guam and the CNMI formed the 
western-most of America's homeland at the doorstep of Asia in 
the time zone adjacent to Tokyo's.
    We are here as a Committee because Guam and CNMI truly are 
the northern keystones in architecture of what, since 1945, has 
been mostly a free and open Pacific.
    In this new era, America's allies in Palau, FSM, and RMI 
formed the integrated superstructure of regional security and 
peace. Once as a child mentored by my father and other leaders 
of the Pacific nations who so often sat at our dinner table, 
and now as an elected leader in this region, I understand in a 
very profound way how and why the UN trusteeship, our Compact 
of Free Association, stood, for decades, against soviet 
imperialism as a threat to democracy and post-colonial free 
enterprise under rule of law.
    Now we are facing the threat of the once concealed but now 
overt velvet-gloved hand of PRC ambitions that hides the iron 
fist of PRC totalitarian communist imperialism.
    Thus, we come here under Chairman Westerman's leadership to 
regroup and confront together the PRC's threat to the freedom 
of the blue continent that stretches across the Indo-Pacific 
region.
    Of course, the American homeland also reaches deep into the 
Southern Pacific where American Samoa's alignment with the 
United States is foundational to a free and open regional 
order, and I have the honor of serving first and foremost my 
own people in my family's true homeland where my father was 
elected and served with both great dedication and success as 
governor.
    So, it is in that spirit of homecoming that I want to 
commend each of my fellow Pacific Islanders who are witnesses 
today. In addition to your oral testimony, I urge my colleagues 
to study your written statements for the record. We gather here 
in the Pacific way, but you have spoken your truth here today 
boldly.
    In that same spirit, my question to each witness is based 
on the powerful statement written by the governor of the CNMI 
that exposes PRC methods and tactics to opportunistically 
exploit our needs and weaknesses.
    Let me say that when I run out of time, and I am about to, 
I am going to ask each of these witnesses to please submit the 
answers for the record, please. We can learn from Governor 
Palacios how PRC uses illegal influence in a democracy to 
corrupt and destroy democracy.
    PRC invests in free enterprise with political warfare 
instead of profit motives to destroy free enterprise. Without 
naming names or specific economic sectors or institutions that 
are under attack, please tell us if you are aware of PRC 
political warfare tactics going on today in your islands. Is it 
getting worse year by year? Are your government's becoming more 
effective in restoring the rule of law.
    And finally, again, without revealing specific cases, is 
U.S. law enforcement and U.S. Department of Justice cooperating 
in any criminal investigations you are pursuing.
    I have 35 seconds. Perhaps one witness could answer, and 
the others submit it for the record? Thank you, Mr. Chairman.
    Governor Palacios. Thank you, Congresswoman. Yes, we will 
do that. I will further submit also a written response to your 
questions. Yes, we see it. We absolutely see it. With the 
geopolitical stance shifting in the Indo-Pacific region, we saw 
what was going on. Luckily, when the pandemic closed down our 
economy and all the flights coming to the Northern Marianas, 
that was sort of a blessing because we have almost half of our 
tourism industry, our visitors were coming in from PRC. Over 
200,000 tourists in 2019. That is significant.
    Mrs. Radewagen. Thank you, Governor, and I will look 
forward to getting the rest of your written answers in the near 
future. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you, Representative Radewagen, and 
thank you for your leadership on the Task Force, and for your, 
obviously, vast knowledge of the region. It is a real benefit 
to have you serving on the Committee.
    I now recognize the gentleman from Wisconsin.
    Mr. Tiffany, you are recognized for 5 minutes.
    Mr. Tiffany. Thank you, Mr. Chairman.
    Mr. Cantero, in March of this year, President Panuelo wrote 
a letter stating how the CCP is waging political warfare in the 
Federated States. And by the way, it was a very methodical, 
detailed letter that the President wrote, and I hope you have 
had a chance to read it, all of you, because I have read it 
twice. Very methodical, very detailed. Have things changed 
since that letter, Mr. Cantero.
    Mr. Cantero. Thank you, Congressman Tiffany for your 
question. I think the great thing about that letter is that it 
provided some highlights, it provided some allegations of 
challenges, it provided some input to the FSM government, and 
particularly, the current administration, things that we can 
take home and see how we can improve.
    At the same time, I have every confidence that our internal 
good governance process is more than suitable to weed out if 
something is happening and identify those and provide some 
rectification to it.
    Mr. Tiffany. So, the FSM government has duly noted the 
letter and is aware that we need to be cautious in dealing with 
the PRC?
    Mr. Cantero. We are fully aware of the content of the 
letter, and like I was saying, the highlights provided will 
give us the impetus to make things better for us.
    Mr. Tiffany. Thank you. Governor Palacios, does earth 
tourism continue in the CNMI.
    Governor Palacios. Not to the extent that it was 4 or 5 
years ago. Very recently, I was alerted by our Commonwealth 
Healthcare Corporation, our hospital, that there was a little 
tick, just a marginal tick, and I asked that they continue to 
monitor that. Right now, we don't have any direct flights in 
from China. Chinese tourists were coming in through Korea. They 
go from Hong Kong or other points, to Korea, but the number of 
tourists now coming to Saipan has almost dwindled to nothing. 
So, over a thousand Chinese tourists in the last month, the 
number of tourists that are coming in, at this point, no, that 
is not a major point of concern for us, but we will be 
continuing to monitor that, and we will----
    Mr. Tiffany. Is it your Government's actions that have 
limited that number compared to what it was a few years ago.
    Governor Palacios. Well, it was, and we had asked all our 
tour groups, charter flights to continue to monitor it with our 
CBP.
    Mr. Tiffany. Thank you for doing that. And Mr. Chairman, I 
would just highlight, this is one of many loopholes in our 
immigration system that is not solving our workforce challenge. 
We hear about the workforce challenges, and while we have 
millions of people coming into the mainland of America, the 
lower 48 states, we have so many loopholes like this that are 
allowing illegal immigration to fester in our country, and it 
still remains a major challenge because it is not solving the 
workforce challenge how we are handling it currently in 
America.
    Mr. Udui, if you could take just a couple seconds, what 
happens if Palau succumbs to this diplomacy that has been going 
on with the PRC? Or is Palau making sure that you don't----
    The Chairman. We will stand in recess.
    [Pause.]
    The Chairman. The Committee will come to order, and the 
gentleman is recognized to finish your question.
    Mr. Tiffany. Let me restate my question. Have you seen any 
instances of the PRC trying to bribe government officials?
    Minister Udui. Thank you, Congressman. I would say that 
there are clear influences toward our government officials in 
the form of trips or invitations for trips, sponsored trips to 
Beijing, for instance, and to dinners and some of these even in 
countries where we later found out the connections to organized 
crime or to the CCP with the help of U.S. officials to identify 
these individuals.
    As I said, it is a daily affair, and some of it we can see, 
some of it we try to stop, and we appreciate the U.S. law 
enforcement assistance to help us address those challenges.
    Mr. Tiffany. Mr. Chair, may I make a brief closing here?
    The Chairman. Be very brief.
    Mr. Tiffany. Thank you. First of all, this is terrific, we 
have been doing these hearings since this Congress convened 
back in January across America, and it is such a privilege to 
be here in the island of Guam to do this also because this is 
the exact response that the House of Representatives Committee 
has been getting across America where we have packed houses 
that people attend where they can address us, rather than 
having to go to Washington, DC.
    I want to thank all of you who are supporting Taiwan. Thank 
you so much for that. It is time to end our ``One China'' 
policy, the misguided ``One China'' policy that was not in 
place in 1979.
    And Mr. Chairman, to this end, if you look at a map that is 
in our hand-out today from the Congressional Research Service, 
it lists Taiwan, or the map depicts Taiwan, as being part of 
Communist China. That is not the case.
    Taiwan is a separate country. It has never been held by the 
mainland and it is time for us to do our part in Congress to 
also recognize Taiwan as we go forward. I yield back.
    The Chairman. The Chair now recognizes the gentlelady from 
New Mexico. Ms. Stansbury, you are recognized for 5 minutes.
    Ms. Stansbury. Thank you, Mr. Chairman, and good morning. I 
want to just start by saying thank you to our governors and to 
our ministers, and I know we have many distinguished guests who 
are here in the audience with us.
    Hafa Adai, thank you so much for hosting us in Guam and in 
the islands, and I also want to extend my thanks to our three 
island Representatives who are representing American Samoa, the 
Mariana Islands, and Guam with us, and who have helped to bring 
us here today.
    I am Melanie Stansbury, and I am the Congresswoman for New 
Mexico's 1st Congressional District, and New Mexico has many, 
many ties to Guam and to our island, and especially through the 
service of our military. I do want to just take a moment 
because I know many, many members of our island communities 
have been active duty military and veterans who have served in 
the U.S. military, and I want to say thank you for your 
service, and thank you for your commitment.
    Mr. Chairman, I am especially grateful for this opportunity 
to be here. I think we have heard a lot this morning about the 
strategic importance of our relationships with our territories 
and our Freely Associated States, but I think some of the 
conversation this morning has also pointed to not only the 
strategic military importance for the United States, but also 
because our territories are Americans and our relationships 
with our sovereign nation states are also important to us 
because we care about the well-being of the people of the 
islands and all island communities.
    So, our commitment here is not only military and 
diplomatic, but also the common well-being of our communities 
and our commitment to the island people of the South Pacific, 
so I wanted to make sure that we said that.
    New Mexico's interest in these issues may seem a little off 
the beaten track, but my district is the district where 
Kirtland Air Force Base and Sandia National Labs reside, which 
play a critical role in helping to support our military 
missions here in the South Pacific, along with many of our 
bases and our national laboratories. So, we not only have a 
relationship with our cultural ties and our military ties, but 
also indirectly being engaged in the South Pacific here in 
these communities.
    And we have a shared commitment to the safety and well-
being of our service members and of our communities, and that 
is why I, myself, and I know Madam Ranking Member who is also 
here from New Mexico, part of why we wanted to be here is to 
affirm to you all our commitment to getting these compacts to 
our Freely Associated States renewed, authorized by Congress, 
and making sure that we appropriate the dollars that have been 
committed to by the Biden administration through those 
negotiations that have been held with your nations, and we are 
here to make that commitment to you and to fight in Congress to 
make sure that we get those through the process, and I think it 
is really important to affirm that here in this forum.
    But I do want to take a few moments to hear, Governor 
Guerrero, we had a moment before we came here to this hearing 
to talk about the threats the Chinese influence in the region 
play, and I was particularly struck by some of the comments 
that you made about the threats to freedom, democracy, and ways 
of life, and I wonder if you could share a little bit more 
about that, especially for the public, about why it is so 
important that we affirm American commitments here in the South 
Pacific.
    Governor Guerrero. Thank you very much. Just briefly, our 
history as Guam has been an experience of war, which dates back 
to the 1600s when Magellan came and invaded and occupied our 
island, and as a result, we saw a decrease in our race from 
150,000 to 8,000. But as a resilient community, we became 
resilient once again.
    We saw the Japanese occupation. So, our people have 
witnessed and experienced direct atrocities of war, and as a 
result of that, we do not want to go back in that direction. We 
saw the atrocities of our women being raped, our children 
forced into labor. We had to witness beheading of our loved 
ones, and that is very traumatic and very, I think, significant 
in terms of our great desire to once again be prepared to 
defend our island and our people. And that is why I think our 
island is very much committed to working with our partners, our 
Federal partners, our military partners, because we do not want 
that to happen. And as I have always said, we do not want to be 
under Chinese rule, which can possibly happen if we do not pay 
attention to this part of our island and if the United States 
does not give us the resources and the protection to not just 
protect our island, but this part of the Indo-Pacific region.
    Ms. Stansbury. Thank you, Governor. And I want to say, once 
again, thank you for all of you traveling here, for your 
commitment and your relationship to the United States. And I, 
unfortunately, am out of time, but I do want to reconfirm that 
we are here to fight for and make sure that we make good on our 
commitments. Thank you.
    The Chairman. The gentlelady yields back. The Chair now 
recognizes the gentleman from Guam. Mr. Moylan, you are 
recognized for 5 minutes.
    Mr. Moylan. Thank you, Mr. Chairman. Thank you to the 
panel. I appreciate your time and effort coming and explaining 
to us, and thank you to my colleagues for being here with us 
today, and also our audience.
    My questions are directed to Governor Leon Guerrero. Last 
fall, you began an important process of seeking membership in 
the Pacific Island Forum for Guam. Can you speak on how Guam's 
membership in the Pacific Islands Development Forum would 
strengthen democracy in the Pacific.
    Governor Guerrero. Thank you very much, Congressman, for 
that question. In this part of the world, Guam is part of the 
North Pacific, but we are also part of the whole Pacific. And 
as you realize, the Pacific Island Forum is a very strong 
formidable voice that represents the concerns and the 
challenges and the initiatives that we, as an island community, 
move forward together. Our membership into the Pacific Island 
Forum is going to be very beneficial for both the islands and 
also from a democracy and freedom standpoint.
    We have been applying for associate membership and the PIF 
delegation has been out here. We have spoken to them, and they 
are very impressed with what they feel will be a strong input 
to the other islands. We could contribute ideas and 
initiatives, innovation, creative ways of dealing with how to 
be a stronger economy, how to educate people, how to keep our 
workforce developed, how to address challenges and barriers of 
climates that we see in the islands. Also, how we can all work 
together to have digital modernization throughout because it is 
very key to communicate.
    So, my passion in being a member of that is to be a member 
of that, to be part of this whole Pacific Island Nations, and 
to be able to contribute to the betterment of all of our 
Pacific Island brothers and sisters, so we can learn from them 
too what their challenge is so we can, again, deliberate, 
discuss, and debate ideas in a very official capacity.
    Mr. Moylan. Thank you, Governor. My next question, we both 
work to eliminate the housing shortage that affects the people 
of our island. Between the military buildup and the influx of 
COFA migrants, demand would only increase further, squeezing 
our residents. For the benefit of the Committee, could you 
share some of the solutions you have been working on to address 
the housing shortages.
    Governor Guerrero. Yes, thank you very much.
    We have been working very closely with, of course, our 
realtors here in how we can increase inventory of housing, not 
just ownership housing, but apartment and rentals. We have also 
been working very closely, for the Committee's information, 
with HUD and how HUD can help us with lower cost housing and 
how HUD can help us with more tax credits to be able to afford 
construction development of housing. We are working very 
closely with our own government agencies to see how we can 
develop lands that we own maybe through the Chamorro Land 
Trust, or even Ancestral Land Trust, and have a developed 
affordable housing there where we can bring in developers to 
help us and we can provide the infrastructure for them. We are 
working very closely, again, with our Federal partners to see 
how we can take advantage of grants and opportunities through 
financing for lower income houses. It is a big concern for us, 
especially in light of the increased population we will be 
having with the military buildup. We have also been working 
with the military to see how they can increase their inventory 
in their own bases so that they wouldn't have to take options 
out in the civilian community because that does impact the cost 
of rental and ownership.
    Construction is another high cost of labor and homes, so we 
are working, again, to see how we can bring in more workers to 
help us with our construction opportunities. Supplies is 
another big cost also.
    Mr. Moylan. Thank you, Governor. About a minute left, just 
a final question. Can you speak on how the University of Guam 
can serve as a vehicle to further U.S. soft and hard power 
goals in the Pacific.
    Governor Guerrero. Yes. The University of Guam is the pre-
eminent high learning institution here in Guam, and since its 
inception, there have been numerous graduates that they have 
graduated that went into leadership opportunities like elected 
officials, business entrepreneurs, and so forth, and the UOG 
has been very influential in providing that education 
opportunity throughout the regions also, as many of our COFA 
citizens have come to Guam for higher education, and so 
training, I think, is a very key thing in terms of when we look 
at soft power. Educating ourselves to the ability that we can 
improve our lives and our livelihood is so powerful, and that 
is the importance, I think, of having our University of Guam 
within this region.
    Mr. Moylan. Thank you very much, Mr. Chairman. I yield 
back.
    The Chairman. The gentleman's time is expired. The Chair 
now recognizes the gentlelady from Wyoming, who is also the 
Subcommittee Chair on Indian and Insular Affairs.
    Ms. Hageman, you are recognized for 5 minutes.
    Ms. Hageman. Thank you. And I am very honored to serve as 
the Chairman of the Subcommittee on Indian and Insular Affairs. 
And I want everyone to understand that this isn't the only 
hearing that we have held on the particular issues that we have 
been addressing today.
    The issues that we have discussed, the relationship with 
our territories, as well as the other islands in the entire 
region has been at the forefront of our interest throughout the 
last 8 months, as we have been in Congress. We have held 
several hearings in Washington, DC talking about the importance 
of where you are located, and not only your importance to the 
security and the geopolitical interest of the United States of 
America, but to the world at large, because of the risk that we 
all recognize are posed by China and the communist party that 
runs that country.
    Minister Udui, since taking office, President Whipps has 
reported publicly, on numerous occasions, where Chinese ships 
violate Palau's Exclusive Economic Zones or EEZ. Some of these 
violations are Chinese surveying activities. In one recent 
incident, a Chinese vessel conducted questionable maneuvers 
over your undersea fiber optic cables. When it comes to the 
surveying, does Palau have mineral or energy potential off its 
waters that China may desire to sustain its massive economic 
and military buildup.
    Minister Udui. Thank you, Congresswoman. And yes, you are 
correct, we believe there are undersea minerals that would be 
of value economically, and they are surveying the cable, this 
is very evident from the tracking that we see and the requests 
that they officially make to enter our waters, but the vessels 
that we see are not made for research, they are made for other 
purposes. We also see that they are taking steps to name ridges 
in our waters, we suspect, for future claim to take possession 
of some of our northern waters.
    Ms. Hageman. Those are highly concerning developments. 
Through your role as the Finance Minister, are you able to 
detail for the Committee the significance of these cables for 
Palau's commerce and what a Chinese threat to these cables 
would mean for your country.
    Minister Udui. The cables are very significant to us. 
Recently, new infrastructure that has really changed the 
opportunities that are available to Palau for economic growth, 
we have sought to take advantage of these opportunities and 
looking at more opportunities in e-commerce, digital 
government, and other new industries. This is something that we 
recently found is something that we don't want to lose, as we 
had a disruption in a cable recently, about a week's worth of 
interruption, and we were unable to restore full service using 
satellite backup.
    So, it is very important that we do have that additional 
cable that is being installed right now, and we hope that that 
will provide the resiliency that we could rely on to attract 
further investment to our island.
    Ms. Hageman. That is good to hear. President Whipps has 
also talked about those encroachments as part of a possible 
retaliation from China for Palau's recognition of Taiwan.
    Minister Udui, have you or President Whipps identified any 
other adverse treatment from China based upon your recognition 
of Taiwan?
    Minister Udui. I think, in my experience and some of the 
discussions I have had, are the subtle influences that they try 
to exert politically, and that is many of the improvements we 
are trying to make for our people are being resisted locally, 
often without a good explanation as to why some of our 
politicians are not in favor of some of these initiatives, such 
as a minimum wage, and we think that there is a resistance to 
see improvements that our President is proposing.
    Ms. Hageman. And I would note, for anyone who is watching, 
and this is certainly a sentiment I will bring back to my 
colleagues in Congress as we consider the Compact renewals, 
that when we discuss Chinese political warfare, there are 
clearcut examples of China using these tactics to achieve one 
of its main political goals, which is eliminating Taiwan's 
diplomatic space.
    And, again, I want to assure the folks who are here and the 
people who have been so gracious to undergo our questioning and 
visit with us today about these important issues, that you are 
not forgotten, that the people in Congress really do recognize 
the important role that you play and that the citizens out here 
and the islands play in protecting world peace.
    So, the messages that we have heard today, I think, are 
very important. We will all be taking them back with us when we 
go back to Washington, DC, but I want you to know that you are 
being heard, loud and clear. Thank you so much. I yield back.
    The Chairman. The gentlelady yields back. The Chair now 
recognizes the Acting Ranking Member of the Committee. Ms. 
Leger Fernandez, you are recognized for 5 minutes.
    Ms. Leger Fernandez. Thank you, once again, Chairman, and 
thank you, once again, our panel of witnesses, as well as all 
of those who are tuned in and all of those who have joined us 
today to listen and to participate in this hearing.
    Something that I have been hearing the last couple of days 
that we have been in the area is that it is the role of the 
United States, and it is the role of the leadership of the 
islands with whom we are meeting and traveling through today, 
to protect not just the bases, right? That would be the wrong 
approach, but it must also be to protect the places, to protect 
the people, to protect the reefs and the culture, and this need 
of participating with the United States. I am a Latina, so we 
love it when familia just gets really big, you can always 
incorporate more and more into that, and what you need do is 
provide both the protection of those you love, but also the 
security of those you love.
    I want to touch on the issues around the comments with 
regards to protecting the reefs, the air, the land, and the 
culture, because I know that there are amazing things that have 
been done. We will visit Palau and see how they have protected 
your reefs and we can't take our own sunscreen, we have to use 
yours, which I think is a great idea, but also, we heard 
yesterday about the seahorses that your Representative used to 
play with in the oceans off of this island and how some of them 
were no longer there.
    Could you talk a little bit more about the importance of 
protecting the beauty that nature has provided us, even while 
we are developing both commercial development as well as 
military development, and how that is working and what should 
we be doing differently? What advice would you give Congress 
and this administration to do differently.
    Maybe I will start with you, Honorable Udui, and see if 
Governor Guerrero wants to add to that, as well, since we are 
here.
    Minister Udui. Thank you for the chance to talk about our 
environment. We believe we work very closely with our 
environment, protecting the source of life for us. It is a 
small resource and we can't afford to lose it. It is something 
that, over thousands of years, Palauans culturally have 
developed a system for, so we continue to use those systems to 
protect the reefs, which is so important for in-shore fisheries 
and livelihoods of people without which they would suffer 
absolute poverty.
    So, it is important for us to continue to look at our 
resources as something that we need to preserve. It is also a 
great source of our economy. We have restricted harvesting of 
certain resources in order to highlight those as economic 
resources for tourism. Rather than to harvest one fish, that 
one fish can bring in millions of dollars in tourist visits to 
the country.
    So, we have taken this approach in integrating 
environmental protection and care into national policy.
    Ms. Leger Fernandez. Thank you. Governor.
    Governor Guerrero. I certainly agree that as an island, we 
have very limited resources, and the wealth of our people is in 
our culture, our land, our people, in protecting the 
environment, and so forth. Our reef also has barriers. They are 
defense against tsunamis and storms and so forth, so we need to 
even be extra careful about protecting our reefs because it is 
actually the security of our lives.
    Also, marine life is very rich and can be used for 
sustaining of livelihood, and so forth. It is very crucial. I 
think your policies with, for example, the NEPA regulations 
have been so very influential in adhering and having Federal 
projects and the military adhere to those regulations and for 
the influence of protecting our resources, our culture, and so 
forth. So, that is what I think----
    Ms. Leger Fernandez. Thank you for pointing that out. Also, 
that was good to understand that in this instance, the NEPA 
process has been useful.
    As I close, I just do want to recognize, and we heard 
testimony with regards to the impact from nuclear testing. I 
come from a state where we exploded the very first nuclear 
bomb. When you go to see Oppenheimer, I think it is one of 
those things we need to recognize, that there was also fallout 
and downwinders, and those who mined the uranium.
    So, for that, do know that I will continue to raise those 
issues because it is only fair that those who have sacrificed 
for our national security also receive recognition and 
compensation for it as well. Thank you very much.
    Mr. Chairman, I yield back.
    The Chairman. The gentlelady yields back.
    I now recognize myself for 5 minutes of questioning. And, 
again, thank you to the witnesses. And the theme I have heard 
today is a sense of pride in this area, love for this culture, 
love for the nature and the beauty of what surrounds you.
    Also, I grew up a fisherman and how can you come to the 
islands and not talk about fishing. It has already been 
discussed some, wish I had more time to spend here and maybe 
partake in some of that. But thinking about fishing, and Mr. 
Udui, you brought this up a little bit about how the Chinese 
don't really respect fishing conservation and how they have 
abused that, but also, I know that as a fisherman, if I want to 
catch a fish, the thing I want to do is put a very enticing 
bait on that hook and I want to get it in front of that fish 
and I want to make it irresistible. But unbeknownst to the 
fish, there is always a hook. There is always a hook that is 
going to take them out of the water, and probably to their 
demise if I take them home and have them for dinner with my 
family.
    But I see the Chinese Communist Party on a fishing 
expedition. I see them dangling bait out to people and saying, 
here is something you must have, and we see what that means. 
You talked about the hotels, how they booked hotels and then 
they canceled them and said, well, if you will agree with us, 
then we will ensure you have tourists coming back.
    These economic incentives that they provide through their 
Belt and Road Initiative often seem very appealing, but there 
is always a hook. And I want to give all the panel an 
opportunity to talk about how we convey the message to the 
public that there is a hook, that these aren't just goodwill 
gestures from the Chinese Communist Party.
    And, also, what does it look like to have a real 
partnership, both economic and strategic partnership, and what 
message can we take back, as Members of Congress, to develop 
that partnership from our end. Governor Guerrero, I will start 
with you, and we will just go down the line.
    Governor Guerrero. I think the message that you should take 
back is those Chinese threats are very real here to our island. 
And how you convey that could be through the stories that we 
have told. I think it is very important also that we continue 
the strong relationship with our Federal partners, our U.S. 
partners, and in that way encourage more support this way 
toward workforce development, education, and so forth because 
that is how we are going to be securing and defensive in this 
part of the world.
    The Chairman. Thank you. Governor Palacios.
    Governor Palacios. Thank you, Mr. Chairman.
    Mr. Chairman, we see it on a daily basis. We see those 
hooks and those baits being dangled every day. As I have 
stated, a lot of our economies are driven by Chinese 
investments. How do we address that? I think the Federal 
agencies need to become more involved, not just in regulations, 
but become more involved in the economic developments of our 
island countries, not just in Guam, not just in the Northern 
Marianas and Micronesia, but across the Pacific.
    Many times, we have policies that were put on us, but no 
guidance. We really need to ask our Federal agencies to provide 
guidance and the over-arching policies of our Federal 
Government, including those policies that were set into statute 
by Congress.
    The Chairman. Thank you. Mr. Udui.
    Minister Udui. Thank you, Chairman Westerman, and I want to 
thank many of your members of your Committee for all the 
support that you have provided us in the process of 
negotiations. Part of it resulting in the appointment of 
Ambassador Yun. I appreciate the support that helped move our 
negotiations along. Regarding the fishing analogy and the hook, 
I think our challenge is getting our people to realize that we 
need to look for long-term sustainability rather than short-
term gains, and this is something that I think during our 
negotiations the United States was very receptive to, and the 
agreement reflects that.
    I think what has helped us is having that relationship with 
the United States and having standards that determine how we 
review decisions. I think it is also about looking at 
sustainability and how diversification can be part of that 
sustainability and the impact of the Chinese tourism strategy 
in not just reserving rooms but buying rooms, even though there 
were no tourists to occupy those rooms, eliminating the 
opportunity for our other tourist segments, and we learned 
diversification is important to tourism during the economic 
financial crisis and the SARS fears in the region before. We 
worked very hard to structure our tourism so that it is 
diversified with many different countries, visitors.
    And in the course of 2 years, the Chinese were able to push 
back on that strategy and weaken us further, making it harder 
for us to recover post-pandemic.
    The Chairman. Thank you. Mr. Cantero.
    Mr. Cantero. Thank you. I think the unique thing about the 
group here is my country is the only country that has 
diplomatic recognition with China.
    We have had that for the last 30 years, but I want to 
confirm that irrespective, even if it is a hundred years, it is 
nowhere near in comparison to the value that we give to our 
relationship with the United States, not even close. To our 
people, to our country, the United States will always be, that 
relationship, No. 1.
    And in saying that, I also want to just reaffirm our 
commitment to security in this region. Irrespective of that 
relationship, we are committed to making sure that we work with 
the United States and everything and anything that has to do 
with security and defense, that commitment is firm and is 
really, really strong.
    On our side, we have our own internal rules of engagement 
with that relationship, and I think it is spinning, we submit 
that we do not engage with them on anything and everything that 
has to do with security discussions. If it is raised, we drop 
it completely. We do the same for loans. If it is raised, we 
drop it completely. These are just parameters that we put in 
place just to give us some good oversight. So, it has been 
quite helpful in my view.
    But I guess the strongest message that we can convey to 
that relationship, that side, is perhaps support in passage of 
the Compact. Passage of that, in my view, displays the true 
relationship that exists between FSM, the United States, and of 
course our brothers and sisters here. That is just my take on 
it, but the messaging, I think, is really, really important at 
the regional level, especially at the regional level. I think 
whether we like it or not, the Compact itself serves as a 
standard of testament of commitment of the United States in the 
region, and our commitment to you.
    I think whether we like it or not, Pacific Island countries 
also look at the Compact as a way to ask themselves, if it 
works then the commitment is there. So, there is a sense of 
evaluation, I think, that is the way they see us from their 
perspective. That is my take on it, but thank you so much for 
your invitation to be here.
    The Chairman. Thank you. And Mr. Ading, we will close with 
your response.
    Minister Ading. Thank you, Chairman Westerman. Before I 
respond to your question, I just want to say thank you for 
hosting our citizens in your state and providing them with 
opportunities, jobs, education, health. The Marshallese 
community in Arkansas is the biggest Marshallese community in 
the United States, and thank you for supporting our citizens.
    I have no doubt that there are IUU fishing activities in 
RMI, in our waters, and we are trying our best with the 
resources that we have to try to curtail these kinds of 
activities. And with the partnership from the United States, we 
appreciate that very much. We have our sea patrol divisions 
that does surveillance of our water, and also, we have the 
maritime authority doing the same.
    We do have two fishing businesses in RMI, licensed 
businesses, I should say, and we do export tuna for canning, so 
that helps our economy. I can provide you with more detailed 
information, Mr. Chairman, in writing. I just need to talk to 
the right person first and then respond to you.
    The Chairman. Thank you. And, again, thank you to our 
witnesses. The members of the Committee may have some 
additional questions for you, and we will ask you to respond to 
those in writing. That will conclude our first panel. We are 
going to take a short recess while we change out for the second 
panel. The Committee will stand in recess until call of the 
Chair, and I anticipate that is going to be at 12 sharp.
    [Recess.]
    The Chairman. The Committee will come to order. We will now 
begin our second panel and I will introduce our witnesses. For 
our second panel, we have the Honorable Tina Barnes, Vice 
Speaker of the Guam Legislature from Hagatna, Guam; and Ms. 
Irene Sgambelluri, World War II survivor from Talofofo, Guam.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will be included in the hearing record.
    When you begin your testimony, the light will turn green 
and when you have 1 minute left, the light will turn yellow. At 
the end of 5 minutes, the light will turn red, and I will ask 
you to please complete your statement. I will also allow all 
witnesses on the panel to testify before Member questioning.
    I thank the witnesses for being here, and I recognize Vice 
Speaker Barnes for 5 minutes. You are recognized.

     STATEMENT OF THE HON. TINA BARNES, VICE SPEAKER, GUAM 
                   LEGISLATURE, HAGATNA, GUAM

    Ms. Barnes. Chairman Westerman, Committee members and 
distinguished Pacific leaders, I am Tina Muna Barnes, Vice 
Speaker of the 38th Guam Legislature. As the longest serving 
member of the legislature and a daughter of Guam, I extend a 
warm welcome and express gratitude for your visit to understand 
our challenges firsthand.
    My testimony today is based on my personal experience from 
my travels throughout the region. As a former national athlete 
and now a policy maker for Guam, I have witnessed the thrives 
of China's soft power diplomacy in our region, from airports to 
critical infrastructure, to government landmarks, and people-
to-people exchanges, China has made it a point to make known 
their presence, open checkbooks, and influence right here in 
our backyard.
    I am the granddaughter of Col. Juan Muna, whom the Guam 
Army Guard headquarters is named after. He organized the Guam 
Militia, a volunteer force of Chamorros who risked their lives 
to fight alongside the Americans during World War II.
    My late husband is a U.S. Air Force veteran who spent his 
final days fighting for his life in Arizona navigating 
bureaucracy that is the Department of Veterans Affairs. My son 
is an Air Force veteran, and my grandson-in-law is deployed 
with the Army. While I may not be able to vote for my loved 
ones' Commander in Chief, I understand duty.
    This same sense of patriotism and duty is shared by many on 
Guam. I am not a defense expert, but I share with you some 
ideas on how the United States can bolster our capabilities in 
this region.
    First and foremost, we need to come to an understanding 
that while Guam is a territory of the United States, we are 
home to about 160,000 Americans, both sons and daughters of 
Guam who serve our country, as well as your constituents 
stationed on Guam protecting democracy and promoting peace.
    Despite the nearly $600 billion passed by Congress for 
infrastructure, our power infrastructure remains damaged from 
Super typhoon Mawar, causing daily outages. We are a vital 
defense point, but lack proper resource allocation.
    Esteemed Members, I understand that some of you serve on 
the committees that have oversight on justice and immigration. 
I come before you today, cognizant of the issues you face at 
the southern border.
    Considering our small Pacific community population decline, 
we lack skilled laborers and the growing DOD presence compete 
for a limited workforce. I urge support for more workers, 
especially for projects outside the fence to tackle 
unaffordable housing and other infrastructure challenges.
    Many of you remember the problems caused by COVID-19 on our 
supply chains. During this time, I noticed an uptick in loading 
cargo planes from China landing on Guam to refuel.
    During the pandemic, when traditional supply chains were 
disrupted, Guam's strategic location posed as a solution to the 
supply chain issues. I passed legislation creating the 
Transshipment Task Force to study the success of such an 
industry on Guam. Today, that study has been funded by U.S. EDA 
and is currently being conducted, and based on my research and 
conversations with U.S. Commerce, there needs to be some policy 
changes to make this happen.
    Imagine a world where China decides to cut off the United 
States from their exports. This would leave us and our allies 
in the Pacific in limbo. Utilizing the deepest port in the West 
Pacific right here on Guam would not only strengthen the 
American supply chain, but create American jobs, boosting the 
American economy. I hope to be able to count on your support to 
make this a reality.
    More importantly, especially with the growing challenges in 
our region, when DOD assets needs critical supplies to maintain 
force readiness, making Guam a regional hub for transshipment 
and trade would make for a better equipped military.
    But this can't be done piecemeal. This would require a 
collective approach at examining our infrastructure, 
strategically investing in our island the needs of the civilian 
population in Guam, while reaping the added benefits of 
equipping the best war fighters in the world.
    Guam is the hub of the Pacific, and one way to demonstrate 
this is the jurisdiction of Coast Guard Sector Guam led by 
Capt. Simmons and his predecessor, Capt Chase. I had the 
opportunity to learn exactly what they do for Guam and the 
region. The men and women of the Coast Guard pride themselves 
on being a force for good, and results speak for themselves. 
Having a jurisdiction of almost 2,000,000 square miles, Sector 
Guam ensures that all those who sail our waters are responsible 
maritime partners.
    As you may know, most of commerce in the Pacific comes 
through Guam. With their insight and genuine desire to curb 
illicit shipping, we passed legislation to implement a digital 
manifest wherein Coast Guard intelligence can begin conducting 
their assessment on every container coming into Guam, 
regardless of their final destination in the Pacific. This has 
been one of the major deterrents for curbing illegal shipments 
in our homes.
    Not only does Sector Guam provide a critical source of 
protecting our maritime ports, a vital hub supporting 
commercial defense interest in the Pacific, but the impact that 
the Coast Guard has on the region is something the entire blue 
continent takes to heart.
    Whether it be preventing boats with immigrants of our 
enemies from entering Guam and other neighbors illegally, or 
our countless successful critical search and rescue operations, 
I urge each and every one of you here today to continue 
furthering their capabilities here on Guam.
    The robust partnerships that the Coast Guard has brought to 
the region is evident in the regular successes we see right 
here.
    I thank you for your time and look forward for your 
continued partnership. God bless Guam, God bless our troops, 
and God bless America. Si yu'us ma'ase [thank you].

    [The prepared statement of Ms. Barnes follows:]
       Prepared Statement of Tina Rose Muna Barnes, Vice Speaker,
                         37th Guam Legislature
    Chairman Westerman, Committee Members, and distinguished Pacific 
leaders, I'm Tina Muna Barnes, Vice Speaker of the 37th Guam 
Legislature. As the longest-serving member of the Legislature, and a 
daughter of Guam, I extend a warm welcome and express gratitude for 
your visit to understand our challenges firsthand.
    My testimony today is based on my personal experience from my 
travels throughout the region. As a former national athlete and now a 
policy maker for Guam, I've witnessed the rise of China's Soft Power 
diplomacy in our region. From airports to critical infrastructure, to 
government landmarks, and people-to-people exchanges, China has made it 
a point to make known their presence, open checkbooks, and influence, 
right here in our backyard.
    I am the granddaughter of Colonel Juan Muna, whom the Guam Army 
Guard Headquarters is named after. He organized the Guam Militia, a 
voluntary force of Chamorros who risked their lives to fight alongside 
the Americans during World War II. My late husband is a United States 
Air Force Veteran, who spent his final days fighting for his life in 
Arizona navigating the bureaucracy that is the Department of Veterans 
Affairs. My son is an Air Force Veteran, and my grandson in law is 
deployed with the Army. While I may not be able to vote for my loved 
ones' Commander in Chief, I understand duty. This same sense of 
patriotism and duty is shared by many on Guam. I am not a defense 
expert, but I share with you some ideas on how the United States can 
bolster our capabilities in the region.
    First and foremost, we need to come to an understanding that while 
Guam is a territory of the United States, we are home to about 160,000 
Americans--both sons and daughters of Guam who serve our country, as 
well as your constituents stationed on Guam protecting democracy and 
promoting peace. Despite the nearly $600 billion passed by Congress for 
infrastructure, our power infrastructure remains damaged from Super 
typhoon Mawar, causing daily outages. We're a vital defense point--but 
lack proper resource allocation.
    Esteemed members, I understand that some of you also serve on 
Committees that have oversight on Justice and Immigration. I come 
before you today cognizant of the issues you face at the southern 
border. Considering our small Pacific community's population decline, 
we lack skilled laborers and the growing DOD presence competes for a 
limited workforce. I urge support for more workers, especially for 
projects outside the fence, to tackle unaffordable housing and other 
infrastructure challenges.
    Many of you remember the problems caused by COVID-19 on our supply 
chains. During this time, I noticed an uptick in loaded cargo planes 
from China landing on Guam to refuel. During the pandemic, when 
traditional supply chains were disrupted, Guam's strategic location 
posed as a solution to the supply chain issues. I passed legislation 
creating the Transshipment Task Force to study the success of such an 
industry on Guam.
    Today, that study has been funded by the US EDA and is currently 
being conducted. Based on my research and conversations with US 
Commerce, there needs to be some policy changes to make this happen!
    Imagine a world where China decides to cut off the US from their 
exports--this would leave us and our allies in the Pacific in limbo. 
Utilizing the deepest port in the West Pacific right here on Guam, 
would not only strengthen the American supply chain but create American 
jobs boosting the American economy. I hope to be able to count on your 
support to make this a reality. More importantly, especially with the 
growing challenges in our region, when DOD assets need critical supply 
to maintain force readiness, making Guam a regional hub for 
transshipment and trade would make for a better equipped military.
    But this can't be done piecemeal. This would require a collective 
approach at examining our infrastructure, strategically investing in 
our island--the needs of the civilian population in Guam, while reaping 
the added benefit of equipping the best warfighters in the world.
    Guam is the hub of the Pacific, and one way to demonstrate this is 
the jurisdiction of Coast Guard Sector Guam. Led by Captain Simmons, 
and his predecessor Captain Chase, I had the opportunity to learn 
exactly what they do for Guam and the region. The men and women of the 
Coast Guard pride themselves on being a ``force for good'' and the 
results speak for themselves.
    Having a jurisdiction of almost 2 million square miles, Sector Guam 
ensures that all those who sail in our waters are responsible maritime 
partners. As you may know most of commerce into the Pacific comes 
through Guam. With their insights and genuine desire to curb illicit 
shipments, we passed legislation to implement a digital manifest, 
wherein Coast Guard intelligence can begin conducting their assessments 
on every container coming into Guam, regardless of their final 
destination in the Pacific. This has been one major deterrent for 
curbing illegal shipments to our homes.
    Not only does Sector Guam provide a critical resource in protecting 
our maritime port, a vital hub supporting commercial and defense 
interests in the Pacific, but the impact that the Coast Guard has on 
the region is something that the entire Blue Continent takes to heart. 
Whether it be preventing boats with immigrants of our enemies from 
entering Guam and our neighbors illegally, or the countless successful 
critical search and rescue operations, I urge each one of you here 
today to consider furthering their capabilities here in Guam. The 
robust partnerships that the Coast Guard has brought to the region is 
evident in the regular successes we see right here before us.
    I thank you for your time and look forward to the continued 
partnership. God Bless Guam, God Bless our Troops, and God Bless 
America. Si Yu'us Ma'ase!

                                 ______
                                 

 Questions Submitted for the Record to the Hon. Tina Muna Barnes, Vice 
                             Speaker, Guam

The Honorable Tina Muna Barnes did not submit responses to the 
Committee by the appropriate deadline for inclusion in the printed 
record.

            Questions Submitted by Representative Westerman

    Question 1. Given the fact that the U.S. is just opened the new 
Marine Corps Base Camp Blaz in Guam, can you speak on the economic and 
security benefits of continued U.S. military development in Guam?

                                 ______
                                 

    The Chairman. Thank you, Ms. Barnes.
    The Chair now recognizes Ms. Sgambelluri for 5 minutes. You 
are recognized, ma'am.

    STATEMENT OF IRENE SGAMBELLURI, WORLD WAR II SURVIVOR, 
                         TALOFOFO, GUAM

    Ms. Sgambelluri. Good morning and Hafa Adai. Members of 
Congress, leaders from the Pacific and dignitaries, thank you 
for coming to Guam for this important hearing to discuss the 
concerns our island has regarding the rising tensions with the 
Peoples' Republic of China.
    My name is Irene Ploke Sgambelluri and I am 92 years old.
    [Applause.]
    I am testifying before you today as a daughter of a World 
War II veteran, mother, grandmother, great grandmother, and 
World War II survivor. I love my island and I believe that this 
is the most beautiful place in the world, not only because of 
the natural beauty, but also because of what it represents. 
Guam is the center of American values in the middle of the 
Pacific Ocean.
    I am proud to testify before you today in this field 
hearing to signify the importance our island has in our nation. 
Almost 80 years ago, I lived through the worst conflict our 
island has faced, World War II. I was just 10 years old. On 
December 8, 1941, the feast of Guam's patron saint, Santa 
Marian Kamalen, the imperial Japanese military began attacking 
and invading our island.
    In the early days of the war, my father, John F. Ploke, a 
U.S. Navy Pharmacist Mate First Class was captured and was a 
prisoner of war in Japan. I never had a chance to say goodbye 
and I feared I would never see him again. War ripped my family 
apart and took away every aspect of life I had known up until 
that point.
    During the day, my siblings and I were forced to attend 
Japanese school, where learning the Japanese language was 
mandatory. In the morning, students would face the sun, bowing 
to the emperor, and then exercise. My brother, sister, and I 
were physically assaulted in school. They would pull my hair, 
drag me, and hit me because I am an American. When we were not 
in classes, we were required to work in the field under the hot 
and scorching sun. We were deprived of food and water for 
hours.
    Shortly after Liberation Day, my father returned from 
Japan. I was overcome with emotion to see that he had survived 
and that our family was reunited. He had suffered immensely, 
and I hardly recognized him. He brought back with him a black 
book with the names of American prisoners of war who were 
imprisoned with him. I have this book today and I am proud to 
have this as a lasting memory of my family.
    The war was the most difficult and painful period of my 
life, and this is coming from someone with cancer.
    While I have told my stories many times, I still find these 
memories agonizing. While I was one of the lucky ones to 
survive, I nearly lost my family, my home, and the life I knew.
    History cannot repeat itself. In other words, Guam should 
never be the focal point of a violent and brutal conflict in 
the Pacific. Nobody should ever have to endure what I went 
through. I would not wish that pain and despair on any worse 
enemy. I cannot let that happen to my grandchildren, great 
grandchildren, and the people of this island.
    Japan attacked us because of our strategic and important 
location in the Pacific. With control of Guam, Japan could 
control the Pacific. China sees the importance of the Pacific 
Islands, as well. However, we will not let them have control 
over Guam and the Pacific region. No way.
    [Applause.]
    I will forever be thankful to the United States when they 
liberated our island 79 years ago on July 21, 1944.
    I was just 13 years old, and I was proud and happy to see 
service members land on Asan beach. To me, their presence 
signified more than just the end of the Japanese occupation in 
Guam, it signifies liberty, democracy, and freedom.
    These American values have been forged in our culture here 
in Guam, and we are proud to be where America's day begins. The 
United States needs to take every possible action to ensure 
that these values remain a part of our lives, no matter what.
    The Federal Government has supported Guam for as long as I 
can remember. You cannot give up on us now. If there is ever a 
time to support the island, it is now. With your commitment to 
protecting Guam, I can sleep at night knowing my community, 
family, and friends are protected by the full faith of our 
Armed Forces and government.
    Un Dangkulu na si yu'us ma'ase [a big thank you], thank you 
very much for having me this morning and allowing me to share 
with you my story and the trust I have in the United States of 
America. God bless you, God bless the United States of America, 
and God bless Guam.
    [Applause.]
    The Chairman. Thank you, ma'am.
    Ms. Sgambelluri. If you have any questions for me, please, 
refer them to Congressman James Moylan.
    [Laughter.]
    Ms. Sgambelluri. I will answer them at a later date in 
writing, which will be submitted into the record.
    Thank you ever, ever so much.
    [Applause.]
    Ms. Sgambelluri. God bless you all, coming from a 92-year-
old lady.

    [The prepared statement of Ms. Sgambelluri follows:]
                Prepared Statement of Irene Sgambelluri
    Hafa Adai, Members of Congress, leaders from the Pacific, and 
dignitaries: Thank you for coming to Guam for this important hearing to 
discuss the concerns our island has regarding the rising tensions with 
the People's Republic of China.
    My name is Irene Sgambelluri, and I am 92 years old. I am 
testifying before you today as a daughter of a World War II veteran, 
mother, grandmother, great-grandmother, and World War II Survivor.
    I love my island and I believe that this is the most beautiful 
place in the world, not only because of its natural beauty, but also 
because of what it represents. Guam is the center of American values in 
the middle of the Pacific Ocean. I am proud to testify before you today 
in this field hearing to signify the importance our island has in our 
nation.
    Almost 80 years ago, I lived through the worst conflict our island 
has faced: World War II. I was just 10 years old when on December 8, 
1941, the feast of Guam's Patron Saint, Santa Marian Kamalen, the 
Imperial Japanese military began attacking and invading our island.
    In the early days of the War, my father was captured and was a 
Prisoner of War in Japan. I never had a chance to say goodbye and I 
feared I would never see him again. War ripped my family apart and took 
away every aspect of life I had knew up until that point.
    During the day, my siblings and I were forced to attend Japanese 
school, where learning the Japanese language was mandatory. In the 
morning, student would face the sun, bow to the emperor, and then 
exercise. My brother and I were physically assaulted in school; they 
would pull my hair, drag me, and hit me.
    When we were not in classes, we were required to work in the fields 
under the hot and scorching sun. We were deprived of food and water for 
hours.
    Shortly after Liberation Day, my father returned from Japan. I was 
overcome with emotion to see that he had survived and that our family 
was reunited. He had suffered immensely, and I had hardly recognized 
him. He brought back with him a black book filled with the names of 
American Prisoners of War who were imprisoned with him. I have this 
book today and am proud to have this as a lasting memory of my family.
    The War was the most difficult and painful period of my life, and 
this is coming from someone with cancer. While I have told my story 
many times, I still find these memories agonizing. While I was one of 
the lucky ones to survive, I nearly lost my family, my home & the life 
I knew.
    History cannot repeat itself. In other words, Guam should never be 
the focal point of a violent and brutal conflict in the Pacific. Nobody 
should ever have to endure what I went through. I would not wish that 
pain and despair on my worst enemy. I cannot let this happen to my 
grandchildren, great-grandchildren, and the people of this island.
    Japan attacked us because of our strategic and important location 
in the Pacific. With control of Guam, Japan could control the Pacific. 
China sees the importance of pacific islands as well; however, we will 
not let them have control over Guam and the Pacific region.
    I will forever be thankful to the United States. When they 
liberated our island 79 years ago on July 21, 1944, I was just 13 years 
old. I was proud and happy to see servicemembers land on Asan Beach. To 
me, their presence signified more than just the end of the Japanese 
occupation in Guam. It signified liberty, democracy, and freedom.
    These American values have been forged in our culture here in Guam 
and we are proud to be where America's day begins. The United States 
needs to take every possible action to ensure that these values remain 
a part of our lives no matter what.
    The federal government has supported Guam for as long as I can 
remember. You cannot give up on us now. If there is ever a time to 
support the island, it is now. With your commitment to protecting Guam, 
I can sleep at night knowing my community, family, and friends are 
protected by the full faith of our armed forces and government.
    Un Dangkulu na si yu'us ma'ase, thank you very much, for having me 
this morning and allowing me to share with you my story and the trust I 
have in the United States.
    God Bless you, God bless the United States of America, and God 
Bless Guam.

                                 ______
                                 

Questions Submitted for the Record to Ms. Irene Sgambelluri, World War 
                              II Survivor

Ms. Sgambelluri did not submit responses to the Committee by the 
appropriate deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman
    Question 1. When comparing what you saw and felt when the Empire of 
Japan invaded and occupied Guam, and what you are seeing and feeling 
today from the People's Republic of China's increasing activities in 
the island, what is the same? What is different?

    Question 2. Do you believe that your experiences of your generation 
are still felt and remembered in Guam today? If not, what should be 
done to help preserve and remind future generations on the importance 
of protecting the homeland and the horrors that come with failing to 
protect it?

                                 ______
                                 

    The Chairman. Thank you, ma'am. The Chair will now 
recognize Members for questions. I want to first start with the 
gentleman from Colorado. Mr. Lamborn, you are recognized for 5 
minutes.
    Mr. Lamborn. Mr. Chairman, I found that very touching from 
both of the witnesses. I appreciate you being here. For the 
sake of time, I will submit my questions for the written record 
and yield back to the Chairman.
    The Chairman. The gentleman yields back. The Chair now 
recognizes the gentleman from the Northern Marianas. Mr. 
Sablan, you are recognized.
    Mr. Sablan. Thank you very much, Mr. Chairman. Saina, si 
yu'us ma'ase, gracias ni un gasta tiempo'mu pa un [thank you 
for your time]. Thank you for coming here and sharing with us 
the horrible experience of war that you went through. My 92-
year-old mom and I had an argument the other day and now I have 
to call her and apologize. Geez. But thank you for being here.
    Vice Speaker, I do have just a couple of questions for you, 
but first, happy birthday. I understand it is your birthday 
today.
    Ms. Barnes. Si yu'us ma'ase [thank you].
    Mr. Sablan. Of course, Guam, my district and across the 
nation we face similar challenges. What can Congress do to best 
help Guam? In your opinion, if given an opportunity, what would 
you ask for.
    Ms. Barnes. Si yu'us ma'ase [thank you], thank you, 
Congressman, and to the panel members here. If I had to answer 
that right now, I would say a permanent authority to bring the 
H2-B labor here, a financial partnership with our power, water, 
and wastewater utilities, and I would be remiss if I didn't 
include an expanded and fully staffed Veterans clinic, because 
we here on Guam, per capita, have the highest enlistment rate, 
and our veterans are here in the thousands and thousands. And 
if we could have a fully staffed veterans clinic, that would 
help us.
    Si yu'us ma'ase put enao na question-mu [thank you for that 
question], Congressman.
    Mr. Sablan. Thank you, and I yield back.
    The Chairman. The gentleman yields back. The Chair 
recognizes the gentlelady from American Samoa, Ms. Radewagen.
    Mrs. Radewagen. I want to welcome and thank the panel for 
appearing today. Both of your statements have been very 
touching, and I don't have any questions at this time, but I 
will submit something later for you to answer for the record. 
Mrs. Sgambelluri, you are amazing.
    Ms. Sgambelluri. Thank you.
    Mrs. Radewagen. Thank you very much for your insights, and, 
of course, Vice Speaker Barnes, si yu'us ma'ase [thank you] to 
both of you.
    Ms. Barnes. Buen prubechu [you are welcome].
    Mrs. Radewagen. I yield back, Mr. Chairman.
    The Chairman. The gentlelady yields back. The Chair 
recognizes the gentleman from Wisconsin, Mr. Tiffany.
    Mr. Tiffany. Thank you, Mr. Chairman. I am very surprised, 
having a mother that is about to turn 92 years old here in the 
month of September, that Mr. Sablan is arguing with his mother 
these days.
    The Chairman. The gentleman will suspend. The Committee 
will be in recess.
    [Pause.]
    The Chairman. The Committee will come to order. The 
gentleman is recognized. Mr. Tiffany.
    Mr. Tiffany. Thank you very much, Mr. Chairman. I love 
those words that they had on their signs, peace, diplomacy. 
That is what the United States of America has always stood for, 
and you see it here with the testimony that we are hearing 
today and the messages that we have been receiving here over 
the last couple days. We stand with respect with all of you. We 
don't seek to use underhanded means and things like that to try 
to gain authority. We have always tried to be above-board in 
the United States of America. We are imperfect, but we have 
always done it from a position of respect, and that is why we 
come here today before all of you, is with respect for what you 
have to say, and that is the message we will take back to the 
American people.
    I just want to ask Ms. Sgambelluri, do you have any 
lessons, ma'am, do you have any lessons for the 21st century 
that we should remember as a result of your experience from the 
20th century.
    Ms. Sgambelluri. You have to repeat it because sometimes I 
have poor hearing. When you are 92 years old, you don't expect 
miracles. I am sorry, can you repeat the sentence again, sir.
    Mr. Tiffany. Do you want to repeat the question to her?
    Ms. Barnes. Yes.
    Mr. Tiffany. What lessons should we remember now?
    Ms. Sgambelluri. All I am going to share is that for 
everyone to love each other, take care of your family, be kind 
and always support the United States of America, and don't let 
any other enemy come to be involved in our island.
    We don't want that to happen, especially China.
    Mr. Tiffany. I just want to highlight one word that Ms. 
Sgambelluri used in her testimony, and that was the term 
liberty. It is one of the most beautiful words that we have in 
the English language. And if you go back to our founding 
documents, you will oftentimes see that our founders have used 
the term liberty as they use the term freedom, and there really 
is a distinction because to me, liberty means freedom, but it 
also means responsibility for your actions and that is 
something that we have always done in the United States of 
America.
    As I said earlier, we are imperfect, but we usually take 
responsibility for our actions if we are imperfect at any time.
    And I just want to highlight, based on my question there, 
that we are deciding right now, in the 21st century, and that 
is why I am so grateful for all of you standing together and 
standing with the United States of America and why we are here 
with you, as Americans, that we stand with you also.
    We are deciding right now whether the 21st century is going 
to be an American century, just like the 20th century was, with 
our values, or is this going to be a PRC century.
    And we have no quarrel, as the Chairman said earlier, with 
the Chinese people, but we do have a disagreement with their 
government. And we are deciding now, as we speak, are we going 
to hold those values, are we going to have a strong foreign 
policy, are we going to have a strong economy where we become 
more responsible with our spending at the Federal level, which 
has led to the inflation we have, are we going to be energy 
independent here in America? Are we going to continue to have 
uncontrolled immigration at our borders.
    Those things are all weakening America, and a weak foreign 
policy is certainly something we don't want to have. And I can 
tell you, that is why we are here, that is why we are here in 
Guam today, is to emphasize to you that we believe in a strong 
America, and we are going to take that message back, that you 
all want to be partners in that as we go forward.
    So, let's make the 21st century also a great century, a 
great American century that emphasizes peace and prosperity 
throughout the world here in the blue Pacific.
    We really look forward to working with all of you, and I 
yield back, Mr. Chairman.
    The Chairman. The gentleman yields back. The Chair 
recognizes the gentlelady from New Mexico.
    Ms. Stansbury, you are recognized for 5 minutes.
    Ms. Stansbury. Thank you, Mr. Chairman. And I also want to 
say thank you to Madam Speaker and happy birthday, Madam 
Speaker, as well as to Ms. Sgambelluri. Thank you so much for 
being here and sharing your story once again. Also, with 
honoring us with the opportunity to hear and to also honor your 
experiences. And hearing the pain, it is difficult to hear, but 
we are grateful that you were willing to share your story again 
in this public forum.
    And one of the things I was reflecting on as I was 
listening to you share your story, is the shared history that 
New Mexicans have with the People of Guam, because New Mexico 
is a home of many, many veterans who served in World War II, 
and in particular, over 900 members of the New Mexico National 
Guard who were captured at Bataan, and 900 of our New Mexicans 
who were forced into POW camps, and many of them never 
returned.
    And Congresswoman Leger Fernandez and I were actually 
talking about many of our veterans the other day, and how many 
people we grew up with, because of the pain and the horrors 
that they experienced, never spoke about it ever again, but we 
know their stories and we know the losses.
    So, for us, as New Mexicans, our history is inextricably 
tied with the people of Guam and the people who served in our 
great military here in the South Pacific. So, I wanted to just 
honor that and share that history, as well.
    I was struck, in particular, I wrote down the comment that 
you made, Ms. Sgambelluri, that Guam and our island nations are 
the center of American values and the center of the Pacific 
Ocean, and also that you noted that those values are liberty, 
democracy, and freedom.
    And I think like other Members on the panel today, that is 
really why we are here. It is not just to address the strategic 
and military concerns that we have and economic concerns we 
have with the PRC, but to really celebrate and uphold our 
shared values as Americans, and as allies in the region.
    So, I want to thank everyone who came out to be a part of 
this. We have heard a lot this morning from various panelists, 
but I think it is important to really take a moment to talk 
about what we are seeing as the PRC's interventions and why 
they are so concerning to us, and the ways in which the PRC is 
trying to project power in the region and why that undermines 
our shared values of democracy. The ways in which the PRC is 
undermining strategic and economic interest in the area, is 
trying to reshape narratives in the region, and even to retell 
history to align with their own diplomatic and economic 
interests and the ways in which this threatens the stability 
and values of democracy in the region. And we heard on the last 
panel why it is engrained, and I think Ms. Sgambelluri, your 
story really reflects that painful history, that we know what 
happens if we let democracy slip away.
    So, Mr. Chairman, I just want to say one more time, thank 
you so much for helping to bring the Committee and our Task 
Force here. This is such important testimony, and thank you, 
again, to our witnesses for sharing your stories.
    Ms. Sgambelluri. Thank you.
    Ms. Stansbury. I yield back.
    The Chairman. The Chair now recognizes the gentleman from 
Guam. Mr. Moylan, you are recognized for 5 minutes.
    Mr. Moylan. Thank you, Mr. Chair. Madam Vice Speaker, of 
course, happy birthday, and also to your twin sister as well.
    Ms. Barnes. Thank you.
    Mr. Moylan. I want to thank you for highlighting the need 
for the expanded Coast Guard assets in Guam and within the 
region. Of course, this is an issue I have been tracking for 
future legislative and administrative actions, and I believe it 
is an issue we can work together on moving forward. Could you 
please elaborate for the Committee why this issue is so 
important for the people of Guam and for the Indo-Pacific 
region.
    Ms. Barnes. I think, Congressman, with the collaboration 
and support of Uncle Sam to this part of the region, as we look 
at peace through strength, and as we look at these threats that 
are coming our way, and knowing that we are American Asian or 
Asian America, I think the collaboration with Uncle Sam making 
sure that the peace through strength is imbedded and engrained 
in here through the protections, through the authorization of 
bringing resources to us. It is who we are when Uncle Sam owned 
us or bought us in 1898 from the Spaniards, and it is because 
of that that we continue to believe in the true liberties of 
democracy today and the protections of our waters, and the 
protection of our military personnel coming to our islands and 
making sure that those protections are here.
    I think that with strength and helping us within this blue 
continent and protecting our borders is most key, and I think 
that is why we need to have Uncle Sam here in this region.
    Mr. Moylan. Thank you. Just one more quick question for 
you, Madam Vice Speaker. Could you speak on the benefits of 
granting SSI benefits to both Guamanians and FAS migrants.
    Ms. Barnes. I think as Americans, parody should be shared, 
and what is given with the folks in the national level should 
be shared here. You talked about one America, you talked about 
not us versus them, you talked about us as one family, and I 
think that when benefits are provided to one, they should be 
provided for all who call America a part of their family.
    Mr. Moylan. Thank you. And for my final question, Mrs. 
Sgambelluri, thank you for your testimony.
    Could you please talk a little about the position you think 
Guam would be put in if we did not have the U.S. military 
presence like we do now.
    Ms. Sgambelluri. I have lived through a conflict in Guam 
before and it was the scariest time of my life. I am worried 
that this will happen again if Guam is not given the proper 
attention by the U.S. military.
    Mr. Moylan. Thank you, Mrs. Sgambelluri, that was well 
said. I really appreciate and thank you for sharing with us 
here today.
    Ms. Sgambelluri. Thank you, Congressman.
    Mr. Moylan. Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back. The Chair 
recognizes the gentlelady from Wyoming.
    Ms. Hageman, you are recognized for 5 minutes.
    Ms. Hageman. Thank you. And, again, it is so wonderful to 
be here. Earlier this summer, as the Chairman of the 
Subcommittee on Indian and Insular Affairs, I was invited to 
speak at the ceremony for the 79th anniversary of the 
liberation of Guam in Washington, DC, and it was a fabulous 
ceremony. I am learning more about your culture, I have really 
enjoyed getting to know your Congressional Representative. He 
has done an excellent job of representing your interests and 
being your voice back in Washington.
    And Mrs. Sgambelluri, listening to you talk about what it 
meant when you saw those soldiers landing on Guam 79 years ago, 
and you said that this represented for you, liberty, democracy, 
and freedom.
    And I do think those are the words what the United States 
has always aspired to be, not only for all of us who are 
Americans, but for others around the world, as we have 
liberated other areas, as well, as we have gone through the 
scourge of things like World War I and World War II.
    And now we are facing what has been referred to several 
times today as an existential threat, and we know what that 
existential threat is, it is the PRC, it is the Chinese 
Communist Party, and they have made no bones about what their 
intent is.
    In fact, they have been in South Africa most recently 
talking about their efforts to displace, really, what for so 
many of us is embodied in those words, the liberty, democracy, 
and freedom. And all we need to look at is what has happened in 
Hong Kong over the last couple of years, the response to COVID-
19, the reaction to that particular situation. And we can see 
what the future would be if they ascend, and we descend.
    So, again, that is why we are here and that is why we have 
been focusing on this issue for the last several months, pretty 
much since the beginning of the 118th Congress, as a Committee, 
as the Natural Resource Committee, and as the Subcommittee as 
well.
    One of the things that has been a great concern to me is 
related to the PRC's illegal, unreported, and unregulated 
fishing or the IUU practices in the vicinity of Pacific Island 
countries.
    And Ms. Barnes, just very quickly, I would like to ask you 
a couple of questions about the impact that that has had on 
Guam and will continue to have. These actions show that the PRC 
not only disrespects the sovereignty of these islands, but it 
is a significant national and international security threat.
    How has the PRC's IUU fishing impacted the economy of Guam 
and the likelihood of your citizens?
    Ms. Barnes. When you take away from the livelihood of the 
community, you take away the very vital strength for them to 
survive. That threat is real, and we need the support coming 
from Uncle Sam.
    I want to share with you, not too long ago, the 35th Guam 
Legislature Speaker, I did receive a call from the Ambassador 
of China saying that I should advocate for a ``One China'' 
plan. And I said, way above my pay grade, this is not right, we 
are Americans and that we are here peacefully. And if this is a 
threat, then I think that you have really asked something way 
above my pay grade.
    But in all fairness to that, as you see that coming here 
and you see what is happening with what they can do without the 
support from Uncle Sam, we will then have what Auntie Irene 
Sgambelluri is so afraid to happen to our children, our 
grandchildren, our great grandchildren, and that is peace and 
democracy. So, we can't allow that to happen.
    Ms. Hageman. Well, I agree with you, and I can assure you 
that every one of the people on this panel will be taking that 
message back to Washington, DC describing the interests of Guam 
and the surrounding islands, and why they are so important, not 
only to all of us, as American citizens, but again, to freedom 
around the world.
    Do you have any suggestions on how the United States can 
increase cooperation and coordination to address these unlawful 
activities from the PRC?
    Ms. Barnes. I think a full collaboration with our brothers 
and sisters of the blue continent is very key and important. I 
think, as we come together as one big, blue continent and 
having over 212 million miles, I think we have a big block of 
people who believe in freedom and democracy, and it starts with 
bringing all of us together and sharing in the principles, the 
values, the equipment, and the resources that it needs to 
protect the freedoms that we have today. That pure 
collaboration is needed.
    Ms. Hageman. I just want to say how inspiring it is to sit 
here and listen to the folks from Guam describe their 
patriotism and what they are fighting for and what their vision 
of the future is, and I want to thank you from the bottom of my 
heart to be able to participate in this. With that, I yield 
back.
    The Chairman. The gentlelady yields back. The Chair now 
recognizes the Ranking Member, Ms. Leger Fernandez, for 5 
minutes.
    Ms. Leger Fernandez. Thank you so much, Chairman. Mrs. 
Sgambelluri, what powerful words you shared with us, what a 
powerful story you shared with us. And the fact that you are 
sharing the story which you, yourself, said hurts every single 
time you have to say it. That describes the love that you have 
for your Guam, the love that you have for the United States of 
America, the love that you have for peace, freedom, and 
liberty, and I thank you so very much for sharing that love 
with us today. It was beautiful and it touched us.
    Ms. Sgambelluri. Thank you ever so much. God bless you all.
    Ms. Leger Fernandez. And God bless you as well. I wanted to 
really thank you, Madam Vice Speaker, and formerly Speaker, for 
sharing the importance of treating equal as equal, so that if 
you are an American citizen who resides in Guam, that you will 
receive the same treatment as an American citizen residing in 
New Mexico. And I think that that was very important for us to 
realize that, especially given the high participation and the 
patriotism that the people of Guam show in serving.
    Can you talk a little bit more about the importance of 
having reliable VA services and medical services here in Guam.
    Ms. Barnes. Thank you very much, Congresswoman Fernandez. 
We are thousands and thousands of miles away where expertise 
and specialties of medical need and what have you, mentalists, 
are needed. We are so far away and with the little resources 
that we have here, we have to travel and spend so much money. 
Don't have to go far. I said earlier my husband had a very rare 
lung disease and needed a transplant, and the specialty is not 
here. We have great doctors here, but we do not have that 
specialty and we had to pay, and having to go through the 
bureaucracy of not just the paper pushing, but the literally 
telling the story over, and over, and over again, the veterans 
here will tell you, they don't know who else to turn to. We 
have non-profit organizations to help fill out forms, to help 
get from one Federal agency to another, sometimes to no avail. 
We need better collaboration. We need a veteran clinic that is 
fully staffed. We need workers that can help our veteran 
families here because we believe in freedom and we believe in 
protecting who we are as Americans, and yet a lot of times we 
feel that when needing the help back, that support is not 
provided to us.
    Ms. Leger Fernandez. Right. And I think it is important 
that when we say the words ``thank you for your service,'' that 
we must back up those words with providing you with the 
services that you have earned and deserve. Because if we are 
going to say the words, mean it when you pass legislation, when 
you pass appropriations, to fund the VA at that level.
    I wanted to ask a little bit, to the extent you might be 
aware of it, the Biden administration released the first ever 
strategy for the Pacific Island Partnership. What have you 
seen, and what do you think is important with regards to that 
partnership and how it may work and influence what is happening 
here.
    Ms. Barnes. I think it is very important. In order for it 
to work, you need to engage with our islands. And inclusive of 
our island brothers and sisters, I think with the partnership 
and the plan, in order for it to be successful, it has to be 
shared across everywhere that is America. And this 
administration has taken that point, I think, that the 
awareness needs to come out, that the program needs to be here, 
but more importantly, we need to be able to acquire and to be 
able to be included in everything that is being given through 
that plan should be shared also with us here in this region.
    Ms. Leger Fernandez. OK, thank you so very much. And with 
that, Mr. Chairman, I yield back. I thank both of you for your 
testimony and for making real for us in our hearts and in our 
minds what you are facing here in Guam.
    Ms. Sgambelluri. Thank you.
    The Chairman. The gentlelady yields back. I recognize 
myself for questions, and instead of questions, I just want to 
say a great big thank you, Ms. Sgambelluri.
    Ms. Sgambelluri. Thank you.
    The Chairman. I can tell you that getting to come here and 
hear your testimony in person made the whole trip worthwhile, 
and it made running for Congress and serving and doing the job 
that we do worthwhile just to have that reminder, that reminder 
of how precious freedom is, how we should never, ever forget.
    I had a chance to look briefly at the book that your father 
wrote those names in, and I thought how he thought we could 
never forget these people that made sacrifices and the freedom 
that we have was bought with blood and sacrifice. Thank you so 
much for reminding us of that today.
    Ms. Sgambelluri. And I am thankful that I am an American.
    [Applause.]
    The Chairman. And Ms. Barnes, thank you for your service 
and for the same passion that we see from both of you. A 
passion for what we have and where we have come from, and a 
passion for where we are going. As I think about December 7, 
1941 and December 8, 1941, I often think not about those days, 
but maybe 10 years before that. And if those Members of 
Congress that were serving in the 1930s could go back, what 
would they have done different that could have possibly avoided 
what we saw through the second world war?
    And I think that is something that we, as leaders, we have 
to ask ourselves today, is what can we do to maybe prevent 
another atrocity like happened back then. And, personally, I 
think that we do seek peace through strength, that we have to 
project strength and resolve. And Ms. Barnes, it is up to you, 
and me, and the others at this table now to make those 
decisions.
    What do you think we can do as Guam, as Americans, as 
Congress, to strengthen our position here, to show that resolve 
and to hopefully avoid something like we have had to experience 
in the past? What are the main things that you are looking for 
from Congress where you want to partner with us to make that 
happen?
    Ms. Barnes. I think presence is key, resources is key, 
collaboration is key, and most importantly, making sure that 
what America gets, Guam and the islands of the blue continent 
get.
    The Chairman. Thank you. And with that, it will conclude 
our testimony and our questions. The Committee may have some 
additional questions for the witnesses, and we will ask you to 
respond to those in writing. Under Committee Rule 3, members of 
the Committee must submit questions to the Committee Clerk by 5 
p.m. on Tuesday, August 29, 2023. The hearing record will be 
held open for 10 business days for these responses.
    Again, thank you to our witnesses. If there is no further 
business, without objection, the Committee stands adjourned.

    [Whereupon, at 12:53 p.m., the Committee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submissions for the Record by Rep. Westerman

                                                August 22, 2023    

Hon. Bruce Westerman, Chairman
Committee on Natural Resources
1324 Longworth House Office Building
Washington, DC 20515

    Hafa Adai Congressman Bruce Westerman:

    Thank you for the invitation to speak in this Oversight Field 
Hearing entitled ``Peace through Strength: The Strategic Importance of 
the Pacific Islands to U.S.-Led Global Security''. I am in favor of 
actions that lead to the safety and protection of Guam, an island that 
I call home.
    Guam is the ``Tip of the Spear'' when in comes to the Defense of 
the United States. As with any spear, it must be hard, sharp at the 
edge, and in capable hands against foreign adversaries. In the worst 
case, missile launched from Asia can reach Guam in as little as 15 
minutes. Distances and regular airline flight time from Guam to the 
following location are as follows:

     Philippines: 2,492.21 km (2.73 hours)

     Japan: 2,613.57 km (2.86 hours)

     Taiwan: 2752.82 km (3.02 hours)

     South Korea: 3,021.88 km (3.31 hours)

     Continental USA: 11,562.54 km (12.67 hours)

    These distances and time emphasize the strategic importance of 
Guam. In the event of a crisis in this region, getting the right 
resources in a timely manner is critical. Guam is the closest part of 
the United States to Asia.
    Guam has two major military installations, a third currently being 
built and one minor installation that continues to grow. Andersen Air 
Force Base, Guam, the 36th Wing mission is to project airpower, expand 
combat capability, and strengthen partnerships from the forward edge of 
the Indo-Pacific. Naval Base Guam is a consolidated Navy installation 
with several components across the island. The base provides critical 
logistics support to the U.S. Pacific Fleet and is the only 
installation in the region that can be used for berthing, ship 
operations and maintenance, refueling, and ordnance handling. Camp 
Blas, a U.S. Marine Base is currently under construction and is 
projected to have approximately 5,000 Marines and their families being 
relocated from Japan to Guam by 2025. These installations place Guam as 
a viable military missile target by nations that may become hostile to 
the United States. The minor installation is the Barrigada Readiness 
Center that house the Guam National Guard. The multimillion-dollar 
complex is fairly new, in comparison to Navy and Air Force Base, as the 
nation relies on the Guard and Reserve as an operational reserve unit 
vice a strategic reserve.
    As of September 30, 2021, Department of Defense controlled 62,695 
acres (97.96 square miles) of land or approximately 46% (This 
percentage is different from what is published to the general public of 
one quarter (1/4) to one third (1/3) of the island depending on the 
source of information). While a large percentage is controlled by the 
military, many servicemembers and their families that are stationed 
here live outside these installations. The estimated 21,700 military 
personnel and their families is part of Guam's population of 
approximately 154,000, most of which are residents and citizens of the 
United States.
    The United States has a duty and a responsibility to ensure the 
safety of its people against all enemies, foreign and domestic. In 
2013, North Korean President, Kim Jung Un, threatened Guam with nuclear 
missiles. The THAAD (Terminal High Altitude Air Defense) missile system 
was not on Guam until after the threat subsided. The only protection 
against any Intercontinental Ballistic Missiles (ICBM) during this 
threat were Aegis equipped ships in the area. We were fortunate to have 
the THAAD permanently assigned to Guam prior to the next North Korean 
Missile Threat in 2017.
    But North Korea is not the only threat to the stability of this 
region. Nations have opposing claims over water rights and islands. 
Threats to freedom of sea navigation and the threats against Taiwan 
bring the possibility of conflict in this region. Conflicts may not be 
limited to direct intervention but also economic bans, political 
tensions, and cyber-attack. The United States has an interest in 
maintaining stability in this region, whether it is due to economic 
inter-dependency such as and not limited to specialized microchips from 
Taiwan or agreements with partner nations to come to each other's aide 
in any type of attack.
    A question brought forth to this committee is, will the US be 
reactive, such as when we brought the THAAD to Guam after the 2013 
North Korean Missile Threat concluded with North Korea deciding when to 
end the threat. Or will the United States take proactive measures to 
protect its citizens here in Guam against possible future armed 
conflict. The proposed action to deploy and operate a comprehensive, 
persistent, 360-degree Enhanced Integrated Air and Missile Defense 
(EIAMD) system to defend the entire island of Guam against the rapidly 
evolving threats of advanced cruise, ballistic, and hypersonic missile 
attacks from regional adversaries, seems on face value, a good plan.
    But, just like any plans, it must be thoroughly researched, subject 
matter experts on both sides given the opportunity to speak, and 
concerns mitigated. The U.S. military does a great job in planning for 
buildup projects inside the gates. As their infrastructure grows, the 
U.S. Military needs to realize the bigger impact they will have on the 
island. The COVID pandemic flu is a good example of the local 
government working with the U.S. Military to develop a joint 
operational plan to address the pandemic. The same thing needs to 
happen as the U.S. Military builds the MDA on Guam. For example, will 
road networks be built up at the cost of the project rather than the 
local community paying for roads damaged by increased traffic to 
include more heavy equipment. If roads are upgraded, secondary effects 
should be mitigated such as flooding on lands next to the roads. With 
the proposed system, all concerns to the infrastructure should be 
mitigated, not at the expense of the local government but part of the 
program's cost.

    There are concerns highlighted from the Congressional Research 
Service on the topic Navy Aegis Ballistic Missile Defense (BMD) 
Program: Background and Issues for Congress, updated on April 20, 2023. 
Mentioned in this paper include:

  1.  Missile Defense Agency (MDA) continues to omit the military 
            services' operations and sustainment costs from the program 
            life-cycle cost estimates . . . . By omitting these costs, 
            MDA limits decision-makers' insight into the full financial 
            commitments needed for affordability and funding 
            determinations.

  2.  MDA continues to adjust program baselines without clear 
            traceability over time. MDA also forgoes recurrent 
            comparisons to the original baseline. Such adjustments and 
            omissions impede decision-makers' awareness of each 
            program's cost performance and total system cost.

  3.  Vice Adm. Jon Hill said that Aegis has been integrated to operate 
            with the Terminal High Altitude Area Defense system, and 
            THAAD has been integrated with the Patriot missile defense 
            system, but MDA hasn't integrated all the regional defense 
            systems with homeland defense systems.

Potential Cost Cutting Measures:

  1.  Congress should consider mandating the integration of the Guam 
            National Guard into the Missile Defense plan of Guam. An 
            example bf how the integration could help cut cost is when 
            the Guam Guard was activated to provide a security unit for 
            the THAAD mission. For a couple of years, the U.S. Army 
            rotated a company size unit into and out of Guam. The unit 
            provide security for the THAAD. Guam Guard asked for the 
            security mission and completed a cost analysis. To get the 
            mission, Guam Guard demonstrated to the U.S. Army they 
            could save over $1 million dollars every year in 
            transportation cost if Soldiers who lived on Guam, could 
            complete the security mission. Today, Soldiers from the 
            Guam Guard have been doing the security mission for the 
            THAAD unit for several years.

  2.  In addition to providing security, the Guam Guard provided 
            personnel and finance support and extended family programs 
            support such as Marriage Encounters for Soldiers and their 
            spouses in the THAAD unit.
  3.  At one point in time, the Guam Guard had an active Signal 
            Detachment. The signal unit was assisting the active-duty 
            signal unit in Guam. When the U.S. Army was downsizing, the 
            Guam National Guard lost the signal unit. If given a signal 
            unit, Guam Guard can provide much needed signal 
            capabilities to MDA.

    Finally, the island of Guam has a need for a Missile Defense System 
and must be used as a last resort! The people on the island of Guam 
have suffered much during World War 2 and Guam does not need to suffer 
another attack. To spare the island of Guam and other Pacific Islands 
in the region, the United States Government must ratchet down the 
tension with other countries in the region and place more emphasis in 
improving diplomatic relations. A quote from Ulysses S. Grant can best 
express my sentiments. ``Although a Soldier, by profession, I have 
never felt any sort of fondness for war, and I never advocated it, 
except as a means for peace.''

    In conclusion, while I support actions that will make Guam and this 
region a safer place to live in, I recommend improving diplomatic 
relations, mitigate and address missile defense concerns and answers to 
questions given by individual citizens and to Congress. I encourage MDA 
to work closely with National Guard Bureau and the Guam National Guard 
to determine where they can help reduce cost to the U.S. taxpayers by 
working as an integrated team on Guam.

            Sincerely,

                                    Roderick Leon Guerrero,
                             Brigadier General, U.S. Army (Retired)

                                 ______
                                 
                        Statement for the Record
                           Lemanu P. S. Mauga
                         Office of the Governor
                       American Samoa Government

    Honorable Chairman and members of the House Committee on Natural 
Resources, it is a pleasure to be before you today to discuss the 
strategic importance of the Pacific Islands to the global security 
efforts led by the United States. We all know that the Pacific Islands 
occupy a very large strategic area. Strategic issues like food 
security, fishing rights, international trade, strategic communication 
lines, and the free flow of ideas should set the Pacific Islands and 
their people at the forefront of the discussion of global security.
    As Governor of the U.S. Territory of American Samoa, I speak today 
with particular pride about the strategic importance and opportunities 
of the islands I call home. While every Pacific Island and the people 
of those islands should be considered strategically important in the 
push for global security, today I seek to demonstrate American Samoa's 
importance to the global security efforts. I hope that I can impress 
upon you how American Samoa is uniquely positioned to strategically 
enhance these efforts and how the U.S. can support us in doing so.
    As we all know, a wholistic strategy for global security requires 
engagement on many fronts. From defense and security initiatives to 
economic development to cultural engagement, the opportunities to 
bolster global security through American Samoa are nearly limitless. As 
America's only South Pacific territory, we are uniquely positioned in 
geography, culture, and regional interactivity to become a hub for 
growing strategic engagement.
    With the appropriate and sufficient allocation of resources, 
American Samoa can become the go-to regional partner of our Pacific 
Island neighbors for healthcare, economic development, education, and 
jobs. For instance, as I am sure you all know, American Samoa is 
blessed to have one of the world's largest and deepest natural harbors. 
The opportunities that stem from this harbor alone makes our Territory 
strategically important for global security. With adequate development 
it can become a place of regional engagement benefiting everyone in the 
region and helping stave off outside influence. An increased U.S. Coast 
Guard presence would be a perfect fit in our harbor to, among other 
things, monitor and deter illegal fishing activities. In doing so, the 
U.S. demonstrates its commitment to sustainable economic development of 
not just American Samoa but our regional partners and allies alike. 
When we enhance food security and protect mutual resources that sustain 
ourselves and our neighbors, global security is strengthened.
    Additionally, development of a more robust industry-leading 
shipyard within this strategic natural resource would not only support 
Coast Guard needs but also allow American Samoa to provide our Pacific 
Island neighbors with a place where they could obtain much needed 
shipyard services. Again, being able to exploit such a resource for the 
benefit of everyone in the region leads to stronger global security. 
There is no need to turn to others who may not have our best interest 
at heart if these resources are available from those who do. Consider 
how much more effective American Samoa could be in the global security 
push if we were also provided with resources needed do this through 
healthcare, education, and economic development.
    These are just a few of the numerous ways that American Samoa can 
play a vital role in helping secure global security. Sometimes, just 
being a good neighbor is enough to stave off negative foreign 
influences. We are not naive enough to think that this is all it takes, 
but these are the types of building block initiatives that bolster the 
strategically necessary relationships between the U.S. and our brothers 
and sisters in the Pacific Island nations. They are so critically 
important in the effort for global security. These are the very real, 
practical needs that when we help meet them, we shore up holes in our 
global security efforts at the ground level.
    Please understand that the people of American Samoa share blood, 
culture, heritage, and history with so many of the people in these 
other Pacific Island nations. Many scholars point to Samoa as the 
mother of Polynesia. We know the history of how Samoan missionaries 
have spread Christianity across the Pacific. We know the history of the 
Samoans that traveled extensively around the Pacific, including those 
sent to Micronesia. American Samoa has a historical connection to all 
regions of the Pacific and these are the ties--the relationships--that 
bring American Samoa closer to all of the island nations of the 
Pacific. It allows our leaders to connect and understand each other on 
a level that only exists when there is a shared and mutual respect of a 
common culture.
    We also know of the involvement of the U.S. throughout history in 
the Pacific. Engagement through the Peace Corps brought the U.S. closer 
to the Pacific region. It was one of the best strategies implemented by 
the U.S. Because of this engagement in the 1960s and 70s, most if not 
all leaders of the Pacific today were taught and trained by the Peace 
Corps. This engendered good will toward the U.S. that has lasted for 
decades.
    But we also know of the absence of the U.S. in the Pacific in 
recent decades. This is what has led to the void that allowed foreign 
nations like China to find and develop opportunities to further their 
national interest through engagement with our Pacific neighbors. Make 
no mistake, when the U.S. neglects the Pacific, China and other foreign 
powers will move in and offer the support to our Pacific nation 
neighbors.
    With this in mind, please note that American Samoa has the highest 
U.S. military enlistment rate and highest casualty rate per capita of 
any state or Territory. We are a very patriotic community that revels 
in its relationship with the United States. There is no independence 
movement, and protests against the U.S. are non-existent. We are here 
today imploring you, the leaders of the U.S., to help us become the 
South Pacific hub from which U.S. engagement reaches out to our 
brothers, sisters, friends, and allies in these most strategically 
important Pacific Island nations. It is how we continue to win the 
hearts and minds of the people and the strategic support of their 
leaders.
    Thank you for your time and consideration. I welcome further 
discussions about how American Samoa can play a key role in supporting 
the U.S.-led global security efforts among these strategically 
important Pacific Island nations.

                                 ______
                                 
          Western Pacific Regional Fishery Management Council
   Waning US Influence and Impacts to Major US Pacific Tuna Fisheries
 within the Western and Central Pacific Ocean (WCPO): A Call for a US 
                       Government Strategic Plan

Summary

    For the small island developing States across the Pacific, fishery 
resources--particularly tuna--are often the greatest, if not the only, 
natural resource available to support their national development. As a 
result, engagement in the fisheries sector is seen by the Pacific 
Island States as a litmus test for the commitment of other States to 
support their development aspirations. The engagement of the United 
States in tuna fisheries across the Pacific has declined significantly 
in recent years. This is due to a variety of factors, including 
competition from highly subsidized fleets from China and other Asian 
nations; exemptions granted to other fleets (but not US vessels) from 
strict conservation and management measures under international 
management regimes; positions and policies of certain Pacific Island 
States that are wholly adverse to US interests (including by States 
receiving significant amounts of US economic assistance); and the lack 
of any concerted US strategy to combat these factors in favor of US 
interests.
    The diminishing role of US fisheries in the Pacific has a range of 
adverse consequences including 1) economic consequences for the state 
of Hawaii and the US Pacific Territories of American Samoa, Guam, and 
the Commonwealth of the Northern Mariana Islands; 2) waning US 
political and economic influence throughout the region; 3) weakening 
national security in the face of China's growing influence and presence 
across the Pacific; 4) conservation consequences for the species 
impacted by fisheries in the region, including protected and endangered 
species of marine mammals, sea turtles, and sea birds; 5) weakening of 
regional governance and rule of law; among others.
    The greatest beneficiary of diminished US engagement and influence 
is China. China is actively implementing a specific set of policies, 
programs, and investments to expand its influence throughout the 
Pacific specifically focusing on the fisheries sector, recognizing that 
the Pacific Island States see their development aspirations tied as 
closely to the fisheries sector as the Middle East is to oil. If the 
United States is to effectively stem China's rise as a regional power 
across the Pacific, it must develop a more holistic, high-level 
strategy to reinforce and reinvigorate the US posture in the Pacific, 
using fisheries as the influential conduit. Such a strategy requires 
coordination across multiple federal departments and agencies, 
including the Departments of State, Interior, Commerce, Defense, and 
Homeland Security.
I. Overview of Competing Interests in the Pacific

    In post-war years, the United States maintained a strategic 
geopolitical position among Pacific nations, much of which was brought 
about through foreign assistance and economic development in Pacific 
Islands. This strategic position helped advance the mutual interests 
between the US and those of Pacific Islands and Oceania nations, 
particularly with respect to national security which extended to 
fishery interests. Many of these Pacific Islands where the US had 
physical presence included its overseas possessions--which were to 
become US Territories (American Samoa, Guam, and the Commonwealth of 
the Northern Mariana Islands, CNMI) and the Freely Associated States 
(Federated States of Micronesia, Republic of the Marshall Islands, and 
Palau). Since the Compact of Free Association in 1986, the United 
States has provided economic assistance through trust funds, defense, 
and other services or benefits to Freely Associated States 
(approximately $270 million in 2020 obligations \1\). The Freely 
Associated States prove to be critical in negotiating fishery policy in 
the Pacific, as discussed in following sections. The United States also 
contributes foreign aid elsewhere throughout the Pacific, such as $2 
billion of its global $51 billion 2020 aid obligations to be disbursed 
throughout Oceania and East Asia.1
---------------------------------------------------------------------------
    \1\ USAID Foreign Assistance Data Dashboard, https://
foreignassistance.gov/
---------------------------------------------------------------------------
    While the US maintains a pivotal role with respect to foreign aid 
distribution and global security, the US seldom has its fishery 
interests supported the Pacific, which should serve as a litmus test 
for how the US is unable to advance its interests in the Pacific in a 
time when it needs to counter the influence of competing countries. 
Such an interest includes having a US catch limit for bigeye tuna 
commensurate with current capacity. Advancement of US fisheries 
interests in the Pacific are often stymied through disagreements with 
beneficiaries of US aid. US fisheries also operate with inherent 
disadvantage relative to other competing nations, most of which are 
also industrialized and are vying for influence in the Pacific. Many of 
these competing fishing nations rely significantly on subsidies, much 
of which are deemed `harmful' towards sustainability which include 
capacity enhancing or fuel subsidies, whereas the majority of US 
fisheries subsidies were deemed `beneficial' because they enhance 
conservation, research, and management.\2\ 55% of global fishery 
subsidies originate from Asia, including China which invested the 
greatest amount in fishery subsidies--$7.3 billion in 2018, of which 
91-95% are deemed `harmful'.1 This contrast may be apparent 
whereas the registry and fishery participation of Chinese flagged tuna 
vessels in the Pacific has increased dramatically over the last two 
decades.\3\ The World Trade Organization vowed to move towards reducing 
harmful fisheries subsidies; however progress on this front has been 
delayed as of November 2021 with draft negotiation text still in 
circulation.\4\
---------------------------------------------------------------------------
    \2\ Sumaila, U.R., N. Ebrahim, A. Schuhbauer, et al. (2019). 
Updated estimates and analysis of global fisheries subsidies. Marine 
Policy, Vol. 109
    \3\ Attachment--Informational Paper: The Rise of China in Pacific 
Tuna Fisheries
    \4\ Godfrey, M. ``WTO fishing subsidies agreement draft text sent 
to trade ministers, raising hopes of deal'' Seafood Source November 29, 
2021
---------------------------------------------------------------------------
    China has contributed an unknown portion of its global 2020 
contribution of $4.8 billion in foreign aid to the Pacific region--to 
countries such as Kiribati, Solomon Islands, Papua New Guinea, and 
others that are supported by the United States as well. Policy analysts 
warn that much of this aid, as part of China's Belt and Road 
Initiative, could lead to `debt-trap diplomacy'--a practice of issuing 
monetary or infrastructure assets in another country that cannot be 
reciprocated or repaid, thus creating leverage on that nation out of 
repercussion of having those assets seized. China's presence in the 
Pacific challenges the posture of US (and of other nations) influence. 
Such a presence and revisionist approaches to erode alliances and 
partnerships have been noted by the US Navy and the Tri-Service 
Maritime Strategy as detrimental to US naval advantages and potentially 
degrading to free and open international order.\5\ Recently in Kiribati 
and the Solomon Islands, China supplanted Taiwanese influence, 
restored, and strengthened diplomatic relations. In Kiribati, China 
drafted plans to develop a large airstrip and infrastructure that could 
be used for military purposes, which is of concern for US national 
security. Chinese influence for fishing access in Kiribati is purported 
to have driven a decision towards opening the world's second largest 
marine protected area--the Phoenix Island Protected Area--adjacent to 
the EEZs of US Pacific Remote Island Areas (PRIAS).
---------------------------------------------------------------------------
    \5\ US Navy. 2020. ``Advantage at Sea Prevailing with Integrated 
All-Domain Naval Power.''
---------------------------------------------------------------------------
    Other Asian distant water fishing nations or entities (ADWFN), such 
as Korea, Japan, and Taiwan compete with the US through foreign aid, 
much of which is intended to influence fisheries specifically. For 
example, Japan's Ministry of Foreign Affairs reported that Japan had 
provided $172 million in grants to Federated States of Micronesia and 
$233 million to Palau from 1980 to 2016, plus numerous other 
contributions and infrastructure projects to Pacific Island nations. 
The Japan Trust Fund and the Chinese Taipei Trust Fund contribute 
significant funds for fisheries development within the Western and 
Central Pacific Fisheries Commission (WCPFC).\6\ Aid by ADWFN may be 
conditional on support for donor nations' fisheries in international 
fora and negotiations. Fisheries are the economic common denominator 
and the largest shared commodity among all communities in the Pacific, 
including the ADWFN and the US alike.
---------------------------------------------------------------------------
    \6\ https://www.wcpfc.int/implementation-article-30-convention
---------------------------------------------------------------------------
II. Overview of the Western and Central Pacific Fisheries Commission

    Roughly 60% of the world's tuna supply, including the majority of 
US-caught tuna, is under international management of the Western and 
Central Pacific Fisheries Commission (WCPFC), a regional fishery 
management organization (RFMO) that includes waters under US 
jurisdictions around Hawaii and the US Pacific Territories. The WCPFC 
was established by the international treaty, Convention on the 
Conservation and Management of Highly Migratory Fish Stocks in the 
Western and Central Pacific Ocean. The treaty was ratified in June 
2004, based off the 1995 U.N. Fish Stocks Agreement. The WCPFC serves 
the purpose to ensure, through effective management, the long-term 
conservation and sustainable use of highly migratory fish stocks in the 
western and central Pacific. This is achieved through a consensus-based 
approach to adopt resolutions and conservation and management measures 
(CMMs) for which members agree to abide.
    The WCPFC, like other tuna RFMOs, assesses and reviews stocks 
through a scientific committee on an annual basis. The major tuna RFMOs 
manage the principal species which include tropical tunas (yellowfin 
tuna, bigeye tuna, skipjack tuna) and albacore stocks. The WCPFC is the 
only tuna RFMO for whereas these species are not overfished nor 
experiencing overfishing (Figure 1).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Figure 1--Comparison of catch volume and stock status between 
the WCPFC and other RFMOs: International Commission for the 
Conservation of Atlantic Tunas (ICCAT), Indian Ocean Tuna Commission 
(IOTC), and the Inter-American Tropical Tuna Commission (IATTC).\7\
---------------------------------------------------------------------------
    \7\ Hare, et al. 2020. The western and central Pacific tuna 
fishery: 2019 overview and status of stocks. SPC Ocean Fisheries 
Programme. Noumea, New Caledonia, 2020.

    Conservation and management is to be consistent with Articles of 
the WCPFC Convention Text, which include objectives and guidelines from 
incorporating principles related to best available science, 
precautionary approach, governance, WCPFC functions, compliance, 
enforcement, monitoring, cooperation with other organizations, and 
other guidelines. One of the most important and unique considerations 
of conservation and management within the WCPFC is the recognition of 
special requirements of small island developing states (SIDS) through 
reducing or preventing `disproportionate burdens' that may affect them. 
SIDS may have inherent economic and political disadvantages relative to 
larger nations such as the US, Australia, New Zealand, or ADWFN; and 
SIDS may be more reliant on its marine resources within their 
jurisdictions (inside their respective EEZs). WCPFC members are to be 
cognizant that shared fishery resources managed under the WCPFC are 
highly migratory, and thus these resources move among and outside 
national jurisdictions, often into the high seas where SIDS may not 
have the capacity to access them. The US Participating Territories are 
also entitled to the same considerations and privileges as SIDS. 
American Samoa also has a special consideration the WCPFC must 
consider, in that it does not have direct high seas access from its own 
EEZ. There are salient concerns among WCPFC members that non-compliance 
to CCMs and threats from illegal, unreported, and unregulated (IUU) 
fisheries on the high seas disproportionately impact SIDS and 
Participating Territories. Cooperation with developing states, such as 
the SIDS, to combat IUU fisheries, promote safety at sea, and 
strengthen compliance are notable priorities of the US Coast Guard in 
its 2021 implementation plan.\8\
---------------------------------------------------------------------------
    \8\ US Coast Guard. 2021. ``Illegal, Unreported, and Unregulated 
Fishing Strategic Outlook and Implementation Plan''.
---------------------------------------------------------------------------
    While the US has its own delegation to the WCPFC, each US 
Participating Territory is also recognized participant to the 
Commission, such that they may have their own delegation and thus 
attend and speak at Commission meetings on their own behalf. Having 
separate delegations consisting of the US and the three US 
Participating Territories also underscores the importance of the 
territories in negotiating mutual interests in the WCPFC and the need 
for US federal agencies work closely and in coordination with the US 
Participating Territories, particularly with improving relations with 
Pacific Island nations that may share cultural and economic 
commonalities.
III. US Pacific Tuna Fisheries Operating in WCPO and their Hardships

    US Pacific Tuna Fisheries in the WCPO include the Hawaii-based 
longline fishery, the American Samoa longline fishery, and the US purse 
seine fishery. The Hawaii longline fishery is a limited-entry two-
sector fishery (capped at 164 vessels) that targets bigeye tuna and 
swordfish, operating predominantly on the high seas around the Hawaiian 
archipelago. The American Samoa longline fishery targets albacore, but 
fishes exclusively in the US EEZ around American Samoa. Both the Hawaii 
and the American Samoa fisheries operate using vessels less than half 
the size of competing foreign longline vessels with fewer crew, do not 
transship, and far exceed all mandatory observer coverage 
requirements.\9\ Many regard the Hawaii and American Samoa longline 
fisheries as the gold standard with respect to compliance and 
monitoring within the WCPFC. The US purse seine fishery operates almost 
exclusively in waters between 10+S and 10+N, targeting skipjack tuna 
that supplies canneries in American Samoa and throughout the Pacific.
---------------------------------------------------------------------------
    \9\ Attachment--Uneven Playing Field for U.S. Longline Fleet within 
the Western and Central Pacific Ocean (WCPO)
---------------------------------------------------------------------------
Hawaii Longline Fishery

    The Hawaii longline fishery is recognized as a `fresh fish' 
fishery, in that it packs bigeye tuna on ice for the purpose of 
consumption as poke and sashimi to supply the US market and Hawaii 
locally. The fishery is the most important domestically managed tuna 
fishery in the United States, supplying nearly 60% of the ex-vessel 
revenue of US-landed tuna fisheries, excluding canned tuna, and is the 
leading domestic US supplier of swordfish. The fishery contributes over 
$105 million annually \10\ in ex-vessel dockside revenue to Hawaii 
alone and is a significant component to the Hawaii economy, local 
culture, and food security. The Hawaii longline fishery has additional 
value in supporting thousands of jobs and supplying the local 
restaurant industry and vast tourism industry.
---------------------------------------------------------------------------
    \10\ Data from: WPRFMC Stock Assessment and Evaluation Reports, 
https://www.wpcouncil.org/annual-reports/
---------------------------------------------------------------------------
    Despite the national importance that the Hawaii fishery has in the 
geopolitical footprint of the US in the Pacific, the US has been unable 
to negotiate a fair US longline catch limit for bigeye tuna that is 
representative of fleet capacity, historical production, and demand. At 
present the US has a longline bigeye tuna catch limit of 3,554 mt, 
which is the lowest catch limit for six countries with specified catch 
limits.\11\,\12\
---------------------------------------------------------------------------
    \11\ Attachment--Annual Western and Central Pacific Bigeye Tuna 
Longline Catch Limits Adopted by the Western and Central Pacific 
Fisheries Commission (WCPFC).
    \12\ WCPFC CMM 2021-01 Conservation and Management Measure for 
bigeye, yellowfin and skipjack tuna in the Western and Central Pacific 
Ocean
---------------------------------------------------------------------------
    At the 18th Regular Session of the WCPFC (WCPFC18) in December 
2021, the US proposed increasing the US longline bigeye tuna catch 
limit by 3,000 mt, based on the rationale that a significant portion of 
catch remains unutilized by other members and such an increase would 
not undermine conservations objectives. The WCPFC Science Committee 
noted that the `temperate region', which includes the region where the 
Hawaii fishery exclusively operates has some of the lowest levels of 
regional depletion and offered scientific advice with the goal to 
increase bigeye fishery yields but reduce any further impacts on the 
spawning biomass in the tropical regions.\13\ The delegations of the US 
and US Participating Territories also submitted analyses further 
demonstrating that increases in US fishing privileges do not create 
disproportionate burdens for SIDS and may have positive benefits for 
SIDS and Participating Territories.\14\ Despite scientific support and 
demonstrable evidence that an increase of US longline bigeye tuna catch 
would pose no conservation risk or hardship to other members, the US 
was rebuked and was placed into a defense posture at WCPFC18. As a 
result, the US is to retain its catch limit through 2023.
---------------------------------------------------------------------------
    \13\ WCPO Bigeye Tuna Stock Status and Management Advice, https://
www.wcpfc.int/doc/01/bigeye-tuna
    \14\ Assessments under CMM 2013-06 for Proposed and Potential 
Provisions of a New Conservation and Management Measure for the 
Tropical Tuna Stocks, 18th Regular Session of WCPFC, WCPFC18-2021-TTM-
DP09
---------------------------------------------------------------------------
American Samoa Longline Fishery

    The American Samoa longline fishery has declined in participation 
and fishery performance since 2007, declining from over 5,000 mt catch 
to under 1,200 mt in 202010. In 2007, the ratio of Chinese to US catch 
South Pacific albacore was approximately 1:1. Since that time, Chinese 
catches of South Pacific albacore are over 20 times that of the US. In 
2018, the WCPFC adopted an interim target reference point to increase 
biomass with the goal to increase biomass and resulting catch-per-unit 
effort (CPUE). WCPFC members have suggested a reduction in fishing 
effort in the South Pacific targeting the stock, noting that the stock 
has gradually declined and CPUE has declined even greater. Despite all 
of this, the stock is not overfished, nor experiencing overfishing. 
However, regional depletion in waters around American Samoa is the 
highest in a region comprised mostly of EEZs of Pacific Island 
States.15 There is little to no chance of an interim target 
reference point for the stock being reached under status quo levels of 
catch and effort.\15\ Therefore, there was a need for WCPFC18 to 
possibly revise the CMM 2015-02 for South Pacific albacore to encompass 
the entire stock distribution and develop harvest strategies. 
Unfortunately, the WCPFC18 made no progress on reducing catches towards 
a biomass target and instead was fixated on reducing catches on the 
high seas, while substantive level of catches are extracted from areas 
inside EEZs around American Samoa. Meanwhile, fishery performance and 
profitability for the American Samoa fishery continues to decline due 
to increasing disproportionate burden, despite being entitled to 
special consideration as a SIDS.
---------------------------------------------------------------------------
    \15\ Reference Document for South Pacific Albacore for the Review 
of CMM 2015-02 and Development of Harvest Strategies under CMM 2014-06, 
18th Regular Session of WCPFC, WCPFC18-2021-18
---------------------------------------------------------------------------
US Purse Seine Fishery

    From 2018-2020 the US purse seine fishery caught and landed an 
annual average of 202,415 mt of tuna, of which on average of 78,879 was 
offloaded in American Samoa \16\ to supply the local StarKist cannery 
in Pago Pago. Viability of the only remaining cannery is existential 
for the American Samoa economy and directly tied to the success of all 
American Samoa fisheries--including the American Samoa longline 
fishery. GDP of American Samoa dropped 18.2% from 2007 to 2019,\17\ 
following closure of a cannery in Pago Pago. The remaining StarKist 
cannery needs assurance of product supply to maintain business. US 
purse seiners have been offloading on average of 39% of catch among all 
US-flagged vessels in Pago Pago from 2016-2020.13 From 2005-
2007, 76% of those vessels were offloading in Pago Pago.13 
While total tonnage has been relatively consistent, there is room to 
expand and increase the amount of product from US vessels offloading in 
Pago Pago as the amount of fish from US vessels offloading in foreign 
ports has increased.
---------------------------------------------------------------------------
    \16\ Data provided by NMFS Pacific Islands Regional Office, 
Honolulu, HI
    \17\ Government Accountability Office, https://www.gao.gov/
products/gao-20-467
---------------------------------------------------------------------------
    However, from 2018 to 2021, the US purse seine fleet declined from 
34 vessels to 13 vessels, considerably lower than the peak of US purse 
seine operations with 60 vessels in previous decades. Many of these 
vessels re-flagged from the US to avoid perceived stringent 
restrictions on allowable fishing effort on the high seas, access fees 
for US vessels under the South Pacific Tuna Treaty, and FAD closures. 
At WCPFC18, the US proposed recognizing US-flagged purse seine vessels 
that operate out of American Samoa as being eligible to benefits of 
SIDS. The idea was rebuffed and no progress was made to recognize these 
vessels.
    The inability for the US to progress and advance its interests in 
the WCPFC will undoubtedly have negative consequences--not only on the 
economies of Hawaii and the US Pacific Territories, but also for 
conservation and management of marine resources. When US fisheries 
cannot contribute adequately to meet demands, they supplanted by 
foreign fisheries that do not have regulatory equivalencies to the 
Magnuson-Stevens Act, Endangered Species Act, Marine Mammal Protection 
Act, National Environmental Protection Act, and other applicable laws 
to that US fisheries are beholden to. Supplanting US fisheries would 
likely lead to higher catches of sea turtles, mammals, birds, sharks, 
and other species in loosely regulated foreign fisheries. These 
fisheries are often not as well monitored and do not have the level of 
monitoring and surveillance as US fisheries. Diminishing the relevance 
of US fisheries in the Pacific also diminishes the political capital of 
the US to advance conservation and management measures that benefit 
marine life.
IV. Dynamic Political Landscape in the WCPFC

    The WCPFC political landscape is driven by blocs of likeminded 
participating members, either linked by geographical, cultural, or 
economic commonalities. The US is often dismissed by delegations at the 
WCPFC, likely due to animus towards the US that may be residual from 
unrelated or past disagreements. With Pacific Islands, the animus is 
likely predicated on the notion that the interests of Pacific Islands 
are counter to those of the US and the lack of progress (or perceived 
willingness) by the US to find common ground with those nations. In 
contrast, ADWFN, despite cultural or political differences, tend to 
find themselves in mutual agreement among one another with respect to 
conservation and management negotiations.
    Most Pacific Island nations are generally unified by their 
membership to the Pacific Islands Forum Fisheries Agency (FFA). FFA 
members generally support interventions and negotiations by other FFA 
members. Eight Pacific Island nations comprise the Parties to the Nauru 
Agreement (PNA), which have specific interests regarding fishery 
management in the highly productive waters around the Equator.
    To ameliorate any perceived or substantiated disproportionate 
burdens for SIDS in negotiating conservation and management, the FFA 
and PNA often promote a rationale to balance fishing effort and/or 
catch between waters within SIDS jurisdiction and waters on the high 
seas. Presumably, WCPFC members would utilize high seas waters or 
within their own jurisdiction at no access cost, but would access 
another nation's jurisdiction (such SIDS) at an associated cost. This 
rationale is referred to as `zone based management'. US fisheries do 
not have access to most of the US EEZs in the WCPFC Convention areas 
due to establishment of Marine National Monuments and other closures, 
hence access to the high seas is important for the US. Zone based 
management is integrated in the WCPFC tropical tunas CMM through 
implementation of a vessel day scheme (VDS). Within the VDS, WCPFC 
members are limited to purse seine effort on the high seas, balanced 
with effort limits within member EEZs. WCPFC members are also subjected 
to seasonal restrictions on the use of fish aggregating devices (FADS) 
on the high seas and within EEZs. SIDS may declare registered vessels 
exempt from seasonal FAD closures on an annual basis.
    This privilege of FAD exemptions for SIDS often comes with debate 
at the WCPFC, out of concern that these exemptions undermine 
conservation precaution for bigeye tuna without due diligence of 
scientific review or may be misused by partnering distant water 
nations. In 2020, nearly one third of purse seine vessels in the WCPFC 
had declared exemptions from FAD closures, including 14 Chinese-flagged 
purse seiners operating through agreements with Kiribati.\18\ 
Meanwhile, US-flagged purse seiners are subjected to FAD closures, 
effort limits on the high seas, and may not have incentive to remain in 
the WCPFC Convention Area through the year in order to supply the 
American Samoa cannery.
---------------------------------------------------------------------------
    \18\ WCPFC Circular 2020/08, 3 August 2020: Notifications Relevant 
to Footnote 1 of CMM 2018-01
---------------------------------------------------------------------------
    Freely Associated States comprise three of the eight members of the 
PNA, which render the opportunity for the US and US Participating 
Territories to work towards mutual goals with these nations through the 
Compact of Free Association (COFA) and the Micronesia Island Forum. 
Through COFA, the US contributed $170 million in 2019 to Free 
Associated States within a 20 year trust fund of $3.5 billion. While 
the US does not presently identify closely with any group of WCPFC 
members, which can make it difficult to garner support or open 
dialogues that could be beneficial, Guam and CNMI are members of the 
Micronesia Island Forum. External to the WCPFC, the Micronesia Island 
Forum is an organization which plans for, and enhances, the quality of 
life throughout its member states while preserving each states diverse 
culture. Improving the relationship with the Freely Associated States 
can be critical to improving the positions of the US and the US 
Participating Territories and may reduce the overall animus towards the 
US.
V. A Path Forward and Need for a Strategic Plan

    The diminishing role of US fisheries in the Pacific can have dire 
consequences on US food production for the Pacific Islands and local 
economies. This may be indicative of waning US geopolitical influence 
in the region, while the present is a point in time that strengthening 
US positions within the Pacific is critical to countering the 
influences of global competitors such as China. Congressional members 
have demonstrated interest on this issue with proposed legislation 
referred to House Foreign Affairs \19\ and Senate Foreign Relations 
\20\ Committees. The US Navy, US Coast Guard, and the Tri-Services 
Maritime Strategy identify threats to US influence and its sustained 
national security advantages 5,8 that could very well be 
resulting in part to inaction of US agencies to advance US fisheries in 
international fora. A more holistic, high-level strategy is needed to 
strengthen US interests in the Pacific, using fisheries as the 
influential conduit. Such a strategy requires coordination across 
multiple federal departments and agencies, including the Departments of 
State, Interior, Commerce, Defense, and Homeland Security.
---------------------------------------------------------------------------
    \19\ H.R. 2967--BLUE Pacific Act. Introduced May 4, 2021 to the 
117th Congress, 2021-2022.
    \20\ S. 1774--Honoring OCEANIA Act. Introduced May 20, 2021 to the 
117th Congress, 2021-2022.
---------------------------------------------------------------------------
    A task force consisting of representatives from agencies within 
these federal departments need to design a roadmap for calculated 
actions each agency must take within a timeline in the next two years 
consistent with the current Administration. This task force may need to 
plan workshops and in-country visits. For example, Council had 
requested NOAA-NMFS to develop a workshop on zone-based longline 
management for WCPFC fisheries with cooperation with the Pacific 
Islands Forum Fisheries Agency. This task force could glean steps 
needed to assuage any disagreement or unrelated issues taken by Pacific 
Island countries. This may require numerous meetings of US Pacific 
Island stakeholders with decision makers in Washington DC. The end 
result must lead to increased US agency integration in the Pacific 
which will improve the US posture in the Pacific so it may achieve its 
goals for increased economic development, food security, and national 
security.

                              ATTACHMENTS

    Informational Paper: The Rise of China in Pacific Tuna Fisheries
                             February 2017
I. Introduction \1\
---------------------------------------------------------------------------
    \1\ This introductory section on China and its fisheries is freely 
adapted from a paper by Zhang Hongzhou (2015).

    China has experienced substantial growth of its fishing industry 
since the late 1970s with catches increasing from about 5 million tons 
to over 60 million tons. Historically, China's marine fisheries 
production was eclipsed by freshwater fisheries production and 
disrupted by political events such as the mid-1960s Cultural 
Revolution. In 2013, China's total fishery production reached 61.7 
million tons, representing over one-third of the world's total fishery 
production. China's enormous fishing industry is supported by the 
world's largest fishing fleet, with nearly 200,000 marine (sea-going) 
fishing vessels and 2,460 distant-water (i.e., fishing on the high seas 
beyond China's EEZ) fishing vessels that fish on the high seas beyond 
---------------------------------------------------------------------------
China's EEZ.

    Apart from being the biggest fishery producer, China has also been 
being the world's leading exporter of fishery products since 2002. In 
2013, China grossed USD 11.6 billion surplus from its external fishery 
trade.

II. China's Tuna Fisheries in the Pacific Ocean

    Since 2000, there has been rapid growth in Chinese longline and 
purse seine fisheries operating in the Pacific Ocean targeting tuna.

Longline Fisheries

    Chinese longline vessels target bigeye, yellowfin, and albacore 
tuna, and operate in both the high seas and national waters of Pacific 
Island countries. Significant increases in both number of vessels and 
catch have been observed since 2000 (Figures 1). In 2015, 429 Chinese-
flagged longline vessels operated in the Western & Central Pacific 
Ocean (WCPO), catching over 35,000 mt of tuna and billfish. A 
significant component of the Chinese longline fleet is capable of 
landing ice-chilled and super-frozen tuna for various markets including 
sashimi (e.g. bigeye) and cannery (e.g. albacore). Chinese large scale 
longline vessels also operate in the Eastern Pacific Ocean (EPO), with 
observed increased catches since 2000 (Figure 3).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Figure 1: a) Number of active Chinese-flagged longline vessels 
operating in the WCPO; b) WCPO catch of tuna by Chinese longline 
vessels

    Source: WCPFC 2016.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    Figure 2: EPO catch of tuna by Chinese-flagged longline vessels

    Source: IATTC 2015.

Purse seine Fisheries
    China has a growing purse seine fishery. In 2000, there were no 
Chinese flagged seiners operating in the WCPO, now there are 20. The 
WCPO catch of Chinese-flagged purse seine vessels in 2015 was 43, 236 
metric tons. China's emergence in purse seine fishing has been coupled 
with significant investments in onshore processing facilities under 
development in Papua New Guinea, Federated States of Micronesia, Fiji, 
Marshall Islands, and Kiribati. Onshore investments are typically 
coupled to fishing access agreements to the EEZs of certain Pacific 
Island countries.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Figure 3: a) Number of Chinese-flagged purse vessels operating 
in the WCPO; b) WCPO catch of tuna by Chinese purse seine vessels

    Source: WCPFC 2016.

III. Chinese Government Subsidies \2\
---------------------------------------------------------------------------
    \2\ The following section on China's subsidies for its fishing 
industry is freely adapted from paper by J. Ilakini and R. Imo of the 
Forum Fisheries Agency (2014).
---------------------------------------------------------------------------
    China subsidizes its distant water tuna fleets to levels unmatched 
globally. In its 11th five-year plan (2006-2011), China's central 
government's `going global' strategy was emphasized, as it announced 
that it intended to actively support domestic enterprises abroad. Part 
of this strategy includes a set of incentives and subsidies to continue 
expanding its distant water fleet. These include subsidies on fuel, 
vessel construction, preferential tax treatment and payment for access 
to other nation's EEZs (Table 1).

Table 1: Tax incentives and Direct Subsidies by the Chinese government 
                      to its distant water fleets

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Source: Ilakini and Imo 2014.

    The extent and magnitude of the subsidies and other support given 
by the Chinese government to its DWF sector is significant and likely 
to provide the Chinese DWF with significant cost advantage over 
unsubsidized fleets. The extent of Chinese subsidies and tax incentives 
appears to be growing under each five-year plan. Operators of other 
fleets operating in the WCPO longline fishery feel that they may soon 
be rendered economically unviable due to their cost disadvantage.
IV. Influence in Western and Central Pacific

    It is no coincidence that China's rapid growth in fisheries also 
coincided with its growing influence in Oceania. Since the early 2000s, 
China has been an aggressive player in Oceania in search of natural 
gas, minerals, fish, and other raw materials. China provides hundreds 
of millions of dollars in foreign aid to governments of Pacific small 
island developing states. In many cases, the aid includes 
infrastructure projects, which are constructed by Chinese firms 
employing non-local Chinese workers. There are numerous articles that 
describe China's increased interest in Oceania and its mounting 
influence over Pacific Island countries. See the following reference 
list for further reading.
V. Competition with US fisheries

    Chinese longline vessels are supplying the same US markets that are 
supplied by US longline fleets operating out of Hawaii and American 
Samoa. Chinese vessels are also competing for fish on the same fishing 
grounds, often fishing side by side with Hawaii longline vessels on the 
high seas adjacent to the US EEZ around Hawaii.
VI. Conclusion

    China's rapid growth in Pacific tuna fisheries since 2000 has 
served to overcapitalize fisheries and has led to stock declines in 
bigeye and albacore fisheries. Significant government subsidies for 
Chinese vessels lessen the impact of reduced catch rates, which allow 
Chinese vessels to outcompete fleets of other nations including the 
United States. The expansion of China into Pacific tuna fishing is 
undermining US influence in the region, and exacerbating our seafood 
trade deficit through the influx of Chinese caught tuna supplied to US 
markets.
References

Hongzhou, Zhang. 2015. China's Fishing Industry: Current Status, 
Government Policies, and Future Prospects: a paper for the China as a 
``Maritime Power'' Conference. July 28-29, 2015, CNA Conference 
Facility, Arlington, Virginia. 34 pages.

Ilakini, J. and R. Imo. 2014. Fisheries subsidies and incentives 
provided by the Peoples Republic of China to the its distant water 
fishing industry. Prepared for the Forum Fisheries Agency. Honiara, 
Solomon Islands. 8 pages.

IATTC. 2015. The fishery for tunas and billfish in the Eastern Pacific 
Ocean, 2015. Seventh Meeting of the Scientific Advisory Committee of 
the Inter-American Tropical Tuna Commission. May 9-13, 2016. La Jolla, 
California. 50 pages.

WCPFC. 2016. Tuna Fishery Yearbook, 2015. Western and Central Pacific 
Fisheries Commission. Pohnpei, FSM. 149 pages.
Further reading

  1.  Feizkhah, E. 2001. How to win friends . . . Beijing is courting 
            tiny Pacific nations. Time International. 157:22. 34 pgs.

  2.  Henderson, J. and B. Reilly. 2003. Dragon in Paradise. China's 
            Rising Star in Oceania. The National Interest. 72. 94-104.

  3.  Tamara Renee Shie. 2007. Rising Chinese Influence in the South 
            Pacific. Asian Survey. 47:2. 322.

  4.  Leitner. B. 2007. China's third wave, part II. The sinicizing of 
            the South Pacific. Asia Times. April 18, 2007.

  5.  Wesley-Smith,T. 2007. China in Oceania. New forces in Pacific 
            Politics. Honolulu. East-West Center. 14 pgs.

  6.  Lum, T. and B. Vaughn. 2007. The Southwest Pacific. US interests 
            and China's growing Influence. CRS Report for Congress. 5 
            pgs.

  7.  Crocombe, R. 2007. Asia in the Pacific Islands: replacing the 
            west. University of the South Pacific. 135 pgs.

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Submission for the Record by Vice Speaker Barnes from Guam

                         TRANSSHIPMENT ON GUAM
                                   By
                      Sissie Luo, Emory University
             Patrick Wang, St. Mary's College of California
 Chirag M. Bhojwani, Director of Policy and Communications, Office of 
                          Vice Speaker Barnes
     Laurie Tumaneng, Chief of Staff, Office of Vice Speaker Barnes
Dr. James Ji, Jr., PPI Advisor, Assistant Professor, University of Guam

Introduction:

    The people of Guam are resilient. Having overcome world wars, 
centuries of colonization by three foreign oppressors, natural 
disasters, tragedies, as well as global pandemics--the people of Guam 
have been able to unite and rebuild. To address the economic 
devastation caused by COVID, the Guam Legislature recently passed Bill 
2-36, which was signed by Governor Lourdes A. Leon Guerrero as Public 
Law 36-23 on May 12, 2021. Based on reports by global stakeholders, in 
order to withstand future economic disruptions, a policy response is 
needed to address supply chain vulnerabilities in a post-COVID era.
Guam's Capacity to serve as a Transshipment Hub

    Guam's economy is primarily driven by three sectors--tourism, 
government spending, and defense spending. Guam's economy was thriving 
prior to the pandemic. However, COVID-19 has caused the economies and 
supply chains in Asia and the Pacific to suffer immensely. According to 
a white paper written by the Guam Chamber of Commerce titled Proposed 
Economic Diversification Initiatives for Guam, the contraction of 
production and consumption led to a ``slowdown in maritime trade, 
reducing shipping demand and port traffic and turnover.'' The proposed 
transshipment solution demands a coordinated regional response to 
ensure the smooth operation of global supply chains and the health and 
safety of shipping-related personnel. According to former Governor Carl 
Gutierrez, Bill 2-36 (LS) will close critical gaps in Guam's economic 
recovery.\1\ This solution urges the participation of both governmental 
and private stakeholders to efficiently sell and gain rapid access to 
consumers within the Asian market.
---------------------------------------------------------------------------
    \1\ Gutierrez, Carl T.C. ``Support for Bill 2-36 (LS), `Relative to 
Developing a Plan to Implement a Transshipment Industry Through the 
Creation of a Transshipment Task Force.' '' Received by the Office of 
Vice Speaker Tina Rose Muna Barnes on 22 April 2021.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    According to the U.S. Department of Homeland Security, the 
maritime transportation system (MTS) is the ``economic lifeblood of the 
global economy.'' Moreover, Guam has the unique capacity of receiving 
more shipments in comparison to other ports in the Pacific. A notable 
advantage of the commercial port is its convenient access to the 
Antonio B. Won Pat International Airport, allowing major airlines to 
fly to cities in the mainland from Guam. Furthermore, the Port 
Authority of Guam has the ability to move containerized, break-bulk, 
and fresh fish cargo. Not only does Guam have easy access to 
manufacturing hubs in the Asia-Pacific supply chain, but its strategic 
location also allows the United States to secure the defense of the 
nation and protect its allies. Furthermore, Public Law 35-105 has 
enabled the Guam Customs and Quarantine Agency to efficiently improve 
its procedures through automation and update its manifest requirements. 
This will contribute to Guam's post-COVID recovery by transporting 
goods into the mainland at faster rates. Public Law 35-105 will also 
improve operational and cost efficiencies while digitization and 
automation ensure maritime transportation remains uninterrupted.
    Notably, the COVID-19 pandemic has negatively impacted Guam's 
shipping and port sector. For example, the United Nations Economic and 
Social Commission for Asia and the Pacific report, published on 
September 30, 2020, indicated that ``any significant disruption to the 
MTS can have devastating implications for the global supply chain, as 
well as America's National Security. Thus, maritime elements of the 
global supply chain are considered by Homeland Security to be critical 
assets and systems that must be protected.'' \2\
---------------------------------------------------------------------------
    \2\ United Nations ESCAP. COVID-19 and Its Impact on Shipping and 
Port Sector in Asia and the Pacific. Tech. Washington, DC: United 
Nations, 2020. Print.
---------------------------------------------------------------------------
    The transshipment task force can play an active role in 
reactivating the MTS. Additionally, Public Law 36-23 encourages the 
U.S. to maximize the potential of Jose D. Leon Guerrero Commercial Port 
and A.B. Won Pat Airport to protect the MTS from vulnerabilities caused 
by the pandemic. Public Law 36-23 would further diversify the economy 
and assist in Guam's post-COVID recovery by increasing the production 
and sale of Guam-made goods; creating thousands of new jobs; injecting 
the financial industry with much needed liquidity, credit, savings, and 
assets; producing new revenue streams; and controlling reverse 
logistics costs. It would also support a sustainable initiative of 
green packaging and contribute to efficient delivery systems.
Regional Benefits:

    With tourism at a standstill, Guam is presented with an opportunity 
to rebuild an even stronger economy, capitalizing on new industries 
that have not been tapped. One such opportunity is to return to our 
roots and utilize Guam as a transshipment hub. According to a recent 
report by the International Finance Corporation (IFC), logistics can 
contribute greatly to a country's productivity and economic 
development. In fact, the cost of logistics as a percentage of GDP can 
be up to 25 percent in some developing economies. Investment and 
increased efficiency in the logistics and transshipment sector can 
boost competitiveness and stimulate economic growth in emerging 
markets.\3\
---------------------------------------------------------------------------
    \3\ International Finance Corporation. The Impact of COVID-19 on 
Logistics. Tech. Washington, DC: World Bank Group, 2020. Print.
---------------------------------------------------------------------------
    However, the global economy was greatly impacted due to logistical 
challenges as a result of COVID-19.\4\ Supply chain disruptions have 
made a dramatic impact on competitiveness, economic growth, and job 
creation. When ports in China closed in response to the spread of 
COVID-19, a backlog of containers was created--impacting the production 
and movement of automotive, electronic, pharmaceutical, medical 
equipment and supplies, and consumer goods. While the IFC is unable to 
put an exact dollar amount on the losses as a result of port shutdowns, 
it is predicted that the economic recession will produce a second 
demand shock in the various industries that have been impacted. 
Companies of a smaller scale simply do not have the flexibility nor the 
resources to afford a backup plan. Companies of a larger scale, such as 
DHL, have declared their contracts force majeure because of 
unforeseeable circumstances that prevent someone from fulfilling a 
contract--essentially deeming all existing contracts null and void. The 
impact of this declaration has had a spillover effect on ports, 
workers, landlords, and suppliers across the world.
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    \4\ International Finance Corporation. The Impact of COVID-19 on 
Logistics. Tech. Washington, DC: World Bank Group, 2020. Print.
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    These sentiments were reinforced by the United Nations Economic and 
Social Commission for Asia Pacific (UNESCAP). In their report, UNESCAP 
translated these challenges to represent the repercussions in the Asia 
Pacific Region.\5\ For many of the smaller Pacific Island nations, one 
ship a week may be all that services the population--limiting the 
amount of food and supplies that are available for the local 
population. Not only is the ability to survive jeopardized but exports 
of raw material and agriculture are discontinued, cutting off economic 
activity for these small populations.
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    \5\ United Nations ESCAP. (2020). Transport and trade connectivity 
in the age of pandemics U.N. solutions for contactless, seamless and 
collaborative transport and trade. COVID-19 AND ITS IMPACT ON SHIPPING 
AND PORT SECTOR IN ASIA AND THE PACIFIC.
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    Both the IFC and UNESCAP agree that a plan is needed to avoid the 
same economic devastation in the next pandemic. Lessons from this 
disaster serve as a guidebook for the future. These recommendations 
include an increased hybrid air and sea cargo capability, restructuring 
of the global supply chain to be further spread out, and expansion of 
digital services within the shipping industry. Guam has recently 
updated its decades-old law requiring a physical manifest of each cargo 
ship--the first step to modernizing its procedures at the port.
    As stated in the Guam Business Opportunities Report, Guam offers 
attractive business opportunities for private sector firms from various 
industries.\6\ The island benefits from a duty-free exemption for goods 
entering the continental U.S. Additionally, Guam laws already allow for 
tax rebates and exemptions for investors who choose to invest in Guam. 
With these tax benefits, as well as the protection of the U.S. Military 
and the political stability that it brings with it, Guam has a chance 
at tapping into this new industry. Furthermore, Guam is home to the 
largest deep-water port in the Asia Pacific, which is ranked 55th in 
the world for its military and economic importance and handles, on 
average, about two million tons of cargo a year. ``Port Strong'' is 
more than a motto for the Port Authority of Guam--it is a testament to 
the capabilities of the CHamoru people.
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    \6\ Kulik, N. & Maruska, K. (2007). Guam Business Opportunities 
Report. Prepared for the United States Department of the Interior 
Office of Insular Affairs.
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    Guam can take advantage of its geographical location to serve as a 
technology hub to return to a state of pre-COVID prosperity. With 
nearly every industry shifting its services online, this has created 
congestion in the existing technological infrastructure. When a 
consumer accesses data virtually, such requests travel in submerged 
submarine fiber optic cables to the respective servers where 
information is stored. With a global demand to access information on-
demand, the island's location as a bridge between the east and the west 
makes Guam a favorable candidate as a global tech hub. Creating a 
technology-hub in the Guam and Mariana Islands archipelago will render 
lucrative employment for our people.
Conclusion:

    Transshipment provides a significant improvement for the people of 
Guam and its economy. Guam's geographical and political-strategic 
location within the Asia Pacific represents a vital component to not 
only U.S. military logistics and operations but also an active role in 
serving as a manufacturing hub in the Asian market. While the 
challenges caused by the pandemic have created a need to establish Guam 
as a strategic hub for shipping for the area, the island is positioned 
for export-import businesses to capitalize on the benefits and import 
duties for U.S.-flag jurisdictions. The cost of living on Guam would be 
lowered as Guam acts as an intermediary location for the shipment of 
goods while at the same time improving the livelihoods and economic 
prosperity of the entire region.

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