MICRONESIAN STATUS NEGOTIATIONS In 1969, the United States and Micronesian political leaders of the Trust Territory began negotiations to change their political status, which would in turn lead to termination of the U.N. trusteeship arrangement. Negotiations were successfully completed with the Northern Mariana Islands, which chose to become a U.S. territory. The Covenant with the Northern Mariana Islands was approved by a joint resolution of Congress in 1976. However, until the trusteeship is terminated, the NMI remains a part of it. The United States and the Federated States of Micronesia and the Republic of Marshall Islands have reached final agreement on a new type of political status--free association. The free association relationship is defined in the Compact of Free Association, under which the Micronesian states will exercise sovereignty over their internal and foreign affairs, while the United States will retain full responsibility and authority for security and defense matters. The Compact, currently with Congress for approval, represents a final step in the process to end the U.N. trusteeship. .The Compact contains several unique provisions defining the relationship between the United States and each freely associated state (FAS). It also is influencing the ongoing debate among many of the flag territories about the meaning of U.S. policy toward them and the future of U.S. territorial relationships. (See ch. 4). OBJECTIVES, SCOPE, AND METHODOLOGY At the request of the Chairmen of the Senate Committee on Energy and Natural Resources and House Committee on Interior and Insular Affairs, we reviewed U.S. policy for its territories and insular areas. Our objectives were to address (1) the back- ground and history of U.S. the extent considered domestic to which the in the policy, territorial territories and formulation (3) whether and and conduct of U.S. policies, designed with stateside objectives insular policy, insular areas laws, have foreign and (2) been and programs in mind consider the effect on the political, social, and economic development of the territories, and (4) whether the present federal organization is adequate to coordinate the delivery of federal programs and services to these areas, and provide a consistent basis for policy, including treatment under U.S. laws. To accomplish these objectives, we conducted a literature search on past and current territorial policy and related mat- ters. We relied heavily on previous studies and reports, including many made by GAO, to determine the political, economic, and social conditions in each territory and insular area. (See app. 9060204 IX.)