With China looming, U.S. signs assistance deal with Micronesia

WASHINGTON, Feb 10 (Reuters) - The United States said on Friday it has signed a memorandum of understanding with the Federated States of Micronesia, reflecting a shared understanding on future U.S. assistance to the Pacific island country that Washington is anxious to keep out of China's orbit.

The State Department announcement means Washington has now signed MoUs on future assistance with three key Pacific island countries as it negotiates cooperation agreement renewals that gives the United States access to huge swaths of the Pacific for defense purposes.

Washington said it signed MoUs last month with the Marshall Islands and Palau and reached consensus on terms of U.S. economic assistance, but Washington has not provided details.

Micronesia did not immediately respond to a request for comment.

Friday's statement said the latest MoU affirmed "our close and continuing partnership and reflecting our shared understanding reached on levels and types of future U.S. assistance to be requested for the Federated States of Micronesia."

"The Memorandum of Understanding was signed as part of the ongoing Compact of Free Association negotiations and confirms our shared vision for a strong and enduring partnership that will continue to benefit both nations and the entire Pacific region," the statement said.

The U.S. move comes as Washington and its allies are concerned about China's military ambitions in the Indo-Pacific region.

Under Compacts of Free Association (COFA) first agreed in the 1980s, Washington retains responsibility for the defense of the three island nations while providing them with economic assistance.

COFA provisions will expire in 2023 for the Marshall Islands and FSM and in 2024 for Palau. Though the island nations still enjoy close ties to Washington, critics warn that a failure to finalize economic aid could spur them to look to China for funding or increased trade and tourism.