RELATIONS WITH THE EU
The European Union and Federated States of Micronesia
The Federated States of Micronesia (FSM) is a Micronesian Pacific island country. The relationship between the European Union and FSM is governed by the Partnership Agreement between the EU and the Organisation of the African, Caribbean and Pacific States (the Samoa Agreement). FSM and the EU work together on a number of common values, interests and challenges, such as climate change, oceans and human rights, which they address in bilateral Political Dialogues, at various ACP-EU policy dialogues, and at global multilateral levels.
Political Relations
Political relations between the EU and the Federated States of Micronesia
FSM consists of 4 islands-States, and an approximate total population of 105,000.
FSM participates in policy dialogues within the ACP-EU institutions from senior officials to parliamentary and ministerial levels.
The EU and FSM hold Enhanced Political Dialogues to address common interests and challenges, such as climate change, oceans, human rights, development cooperation, economic and trade cooperation. The last Political Dialogue took place in 2017.
FSM and the EU are engaged in the Pacific region through the Pacific Islands Forum (PIF) and Pacific Community (SPC). The Organisation of African, Caribbean and Pacific States (OACPS) coordinates the ACP-EU policy dialogues.
The EU and FSM apply a short-stay Visa Waiver Agreement, to encourage people-to-people contacts, boost tourism and invigorate business.
FSM has been supported by the EU and its Member States through the Team Europe response to the COVID-19 pandemic.
Trade and Economic Relations
Trade and Economic Relations Between the EU and Federated States of Micronesia
The Federated States of Micronesia (FSM) is classified as a Small Island Developing State (SIDS) with a mixed economy heavily reliant on agriculture, fishing, and tourism, alongside significant remittances from its diaspora. The economy is characterized by its high dependence on external assistance, with substantial contributions from the United States through the Compact of Free Association, as well as from international partners including the EU.
The FSM's economy is primarily based on subsistence farming and fishing, with agriculture accounting for approximately 15% of GDP. Key agricultural products include coconuts, copra, fruits, and vegetables. The fishing sector, especially tuna fishing, is significant, both for domestic consumption and export, and plays a crucial role in the livelihoods of the islanders.
Tourism is also a growing sector, attracting visitors primarily for its natural beauty and cultural heritage. However, due to its geographic isolation and limited infrastructure, tourism currently contributes a smaller proportion to GDP compared to other SIDS in the region.
FSM benefits from the EU’s Generalised Scheme of Preferences (GSP), which partially or fully removes customs duties on imports originating from developing countries, thereby increasing the competitiveness of their products. FSM expressed interest to join the EU-Pacific States Economic Partnership Agreement (EPA), which aims to promote sustainable development and the gradual integration of Pacific States into the world economy by removing customs duties and quota on all products exported to the EU market and establishing special Pacific-tailored trade provisions. EU support has been directed toward enhancing the capacity of FSM's fisheries sector and promoting sustainable practices within the blue economy.
More recently, the FSM has been actively seeking to enhance its trade relations and diversify its economic base. With an eye on sustainable development, the FSM government has been exploring initiatives related to renewable energy and climate adaptation strategies. Moreover, there is ongoing dialogue regarding future cooperation projects under the NDICI (Neighbourhood, Development, and International Cooperation Instrument) that may further strengthen economic ties with the EU.
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FSM can accede to the EU-Pacific Economic Partnership Agreement (EPA), currently applied between the EU and Fiji, Papua New Guinea, Samoa and Solomon Islands, for duty-free, quota-free access to the EU market — the world’s largest single market.
Copyright: Julius Sliver
DEVELOPMENT COOPERATION
THE EUROPEAN UNION’S DEVELOPMENT COOPERATION WITH FSM
The EU's development cooperation with FSM focuses on sustainable development, particularly in areas of environmental protection, climate change adaptation, and disaster risk resilience. Projects funded under various EU initiatives aim to enhance FSM's capacity to manage its natural resources, especially in the fisheries sector, improve infrastructure, and promote renewable energy. These initiatives are in line with FSM's priorities for sustainable development and economic diversification.
Through regional cooperation programmes like the EDF (European Development Fund) and the Global Climate Change Alliance Plus (GCCA+), the EU has supported projects designed to strengthen disaster preparedness, protect biodiversity, and improve food and water security. Civil society organizations in FSM also benefit from EU funding in areas such as environmental conservation, gender equality, and human rights.
The EU's focus on climate resilience aligns with FSM's vulnerabilities to climate-related disasters, and ongoing efforts target reducing the country’s reliance on external aid by fostering local capacities in sustainable practices.