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A copy Of thesigned '

Statement of Principles describing the future relationship between the U. S. and each of these entities is
-enclosed herewith...
We are now negotiating a full
Compact of Free Association to implement these principles.

You will note that the Statement is silent on the

matter of post-Trusteeship U. S. economic assistance,
This has not yet been negotiated with the Micronesian
commissions, but negotiations on this topic are scheduled
for the next negotiating round in'’mid~-January.

For

present purposes, however, it may suffice for me to oer
tell you as, indeed, I have already
told the Hicronesian.

commissions, thatgive
we
to
each
government a

flat cash grant from which they will fundnearlyall ov”

05SheetZequirenents “The only exceptions planned ......-are the continued provision of three federal agencies'
programs, the FAA, the Weather Service and the Postal
Service, without additional cost to them.
e do not
contemplate the continuation of any other federal

programs in the post—Trusteeshipperiod
exc pt
for
sucnasthe Micronesians themselves might wish to

pay for out of their cash grants.

i adonot,frankly,

believe that the latter is alikély eventuality as

the cash grants I am authorized tonegotiatearenot_
large enough and the administrative costs are so high,
that tne future Micronesian governments are likely
to

conclude that their limited funds could be better

spent otherwise.

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.

a I should also add that additional U. S. postTrusteeship assistance will not be available to the

“"" Micronesians through AID, both for all the reasons

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‘ay oc...

set forth in the preceding paragraph and because

the Micronesians' unprecedented "free association”

- |Heeeitory status will leave_them_neither_aU. S..
‘térritorynor-indepe ndent ,
This means that theMicronesiansSwill not be eligible for food assistance’
either through USDA _or through AID.
TI should add,
coe

tration'sposition goingint«
into“negotiations
+
“with.

become necessary toadjust
bec
theMicronesians. Itmay
that position to some extent in order to attain both

a negotiated agreement and.congressional approval.

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Select target paragraph3