The United States said Wednesday it had reached a deal with Micronesia to extend decades-old political and security ties, forestalling Chinese efforts to build influence in the region.
State Department officials said three documents were signed in Pohnpei, signalling the extension of a 20-year-old arrangement that gives the island nation security and budget guarantees.
In return, Washington gains influence and the right to locate military facilities across a swathe of the central Pacific.
The signing of the agreements will be a blow to China, which has made a concerted effort to increase its influence in Micronesia, prompting unease among some local politicians.
Then-president David Panuelo in March accused China of engaging in bribery, harassment and espionage as it tried to boost influence.
Beijing, he told parliament, had "demonstrated a keen capability to undermine our sovereignty, rejects our values, and uses our elected and senior officials for their own purposes".
Among the dramatic allegations, Panuelo claimed his own cabinet colleagues transmitted recordings of bilateral meetings directly to China, and officials were bribed.
"We are bribed to be complicit, and bribed to be silent. That's a heavy word, but it's an accurate description regardless," he said
US talks on the so-called "compact" with Micronesia have been taking place for years, alongside similar agreements with neighbouring Palau and the Marshall Islands. All three run out by the end of 2023.
Deals have now been reached with Micronesia and Palau, but talks with the Marshall Islands have been beset by disagreements about the legacy of testing nuclear weapons on the Pacific archipelago more than 70 years ago.
The United States detonated 67 nuclear bombs in the Marshall Islands between 1946 and 1958, and the health and environmental impacts are still felt today.
Marshall Islands negotiators first want the United States to pay more of the compensation awarded by the international Nuclear Claims Tribunal, totalling just over $3 billion, of which around $270 million has been paid so far.
Taylor Ruggles, the US State Department's Pacific Island Affairs director, said Wednesday that talks with the Marshall Islands were "advancing".
"Clearly the renewal of the compacts is important for the administration," said Ruggles, adding that the agreements still have to be "funded and approved" by the US Congress.
He described Micronesia, Palau and the Marshall Islands as "some of our closest partners in the Pacific".
The United States has major ballistic missile, space surveillance, radar and air force facilities in the region.
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