to their own time frames. For example, the U.S. will retain the right to deny access to Micronesia for security reasons regardless of whether the Compact is terminated. In addition, the U.S. obligation to defend Micronesia against attack will remain in force as long as the United States exercises its foreclosure or denial right. POTENTIAL ISSUES RELATED TO THE COMPACT Because of their geographic proximity and similar economic and social problems, the Pacific flag territories (American Samoa, Guam, and the NMI) will probably watch the new relationship between neighboring Micronesia and the United States closely. Some provisions in the Compact, such as foreign affairs, economic assistance, and increased local autonomy, have already generated some interest and concern. While the impact of the Compact on the U.S. flag territories is not fully known, we believe it could cause the territories to re-examine their Status relationship with the United States. Foreign affairs autonomy have Under the Compact, significant the FSM independence and in the Marshall .Islands foreign affairs will activities. They will be eligible for economic assistance from bilateral and multilateral donors, can negotiate treaties non-defense nature with foreign countries, and agreements of a and will be eligible to apply for membership in some international organizations. None of these rights are enjoyed by the flag territories. Territory officials from Guam, the NMI, and American Samoa have shown interest in receiving some of these benefits and are concerned about the potential impact these benefits might have on them. For example, territory officials have expressed interest in’ joining the Asian Development Bank, a multilateral lending institution which provides economic assistance to developing countries. They believe membership in the Bank will enable them to become more closely integrated with Pacific neighbors, as well as make them eligible for low interest loans. Currently, U.S. flag territories are not eligible for membership in the Asian Development Bank or most other international or regional organizations. Economic and local autonomy Some of the principal economic and domestic provisions in the Compact may also attract interest in the territories. For example, the long-term economic assistance commitment, currently only enjoyed by the NMI, may prove of particular interest. Guam has recently expressed interest in developing a long-term economic assistance program for capital improvements, which it 20 9000221