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APPENDIX ITI

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APPENDIX II

Issues Affecting U.S. Territory and Insular Policy
The Department of State endorses the GAO report's broad
conclusion that organizational options for the Federalterritorial relationship should reflect the present direction
of that relationship -- i.e., greater autonomy within the
context of self-determination.
That evolution accords with
‘long-declared global United States policy on dependent
territories.
Greater centralization of territorial affairs within the
Federal Government in the area of program activities is likely

to be seen in the territories and abroad as a move to reverse
the present direction of U.S. territorial policy and as an

impediment to more efficient direct access to Federal agencies
by the territorial governments.
On the other hand, the Department recognizes the need for.
better coordination of both policy and program issues and
suggests that an interagency coordinating committee and working
groups, as have been used in the Micronesian situation, could
fulfill those needs.
The Department would oppose establishment of an interagency
_ body that would have jurisdiction over Micronesian as well as
territorial affairs.
Our present obligations as an
Administering Power on behalf of the United Nations and the
nature of our future relationships to the Micronesian states.
under the Compact of Free Association call for an entirely
separate organizational structure for dealing with the freely
associated states following termination of the trusteeship.

Any organizational arrangement linking the freely associated

states and the flag territories would be seen from abroad as a
perpetuation of “colonial status quo" and could only provide
fuel for the malicious Soviet charges that the Compact is
nothing but a sham annexation.
Presidentially approved policy on the management of our
post-trusteeship relations with the Micronesian states calls
for a two-level interdepartmental structure consisting of an
interdepartmental policy steering committee chaired by the
Department of State, with the Departments of Defense, Interior
and Justice, and JCS, OMB, and NSC as regular members, and
other agencies participating as the subject matter requires,
and an interdepartmental professional staff tailored to the
requirements of the situation, attached to and headed by a
career officer of the Department of State, with deputies from

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