Washington, D.C. — Congresswoman Uifa’atali Amata took part in last week’s hearing of the House Foreign Affairs Committee (HFAC) on the U.S. Agency for International Development (USAID), and used her time to ask for expert witness testimony on U.S. priorities, aid, and support in the Pacific Islands, especially the commitment to the Compact of Free Association (COFA) allies and the role of the Development Finance Corporation. 

“I wanted a clear record of our established U.S. commitments to the COFA nations,” said Congresswoman Amata. “No matter what federal department account COFA funding may come from, the DOI will continue to administer that funding, subject to congressional oversight.”

Amata sought testimony confirming that USAID does not have typical foreign assistance economic grant programs in the COFA countries, to establish on the record that U.S. economic assistance to Palau, RMI and FSM is not part of the U.S. foreign assistance economic grant program. In fact, both the Trump and Biden administrations have rejected any proposals to channel COFA economic assistance through USAID as foreign assistance. 

Instead, U.S. economic assistance under COFA is a negotiated and mutually agreed political, economic and regional strategic security package that has also been voted through the Congress into law. Rather than foreign assistance, COFA is a negotiated alliance with key mutual benefits and interests. Since 1946, every President and Congress has favored economic assistance to the Freely Associated States greater than USAID’s foreign programs, but also not the same as U.S. territories. These policies promote self-determination along with international peace and security. 

In her next exchange with witnesses, Congresswoman Amata sought testimony on the Development Finance Corporation’s future role. 

The Development Finance Corporation (DFC) has had an important role that can continue and even improve within a reform process to sustain a next generation foreign assistance program that creates markets for U.S. exports and leads to jobs in America.

(Source: Congresswoman Uifa’atali Amata’s D.C. staff)

BACKGROUND

During the first weeks in office, the Trump administration has taken a series of bold actions, shaking the international development establishment to its core, according to the Center for Strategic International Studies. On January 20, the president issued an executive order nearly all foreign development assistance funded by or through the Department of State and U.S. Agency for International Development (USAID) for 90 days, pending a thorough review. In the future, USAID may be restructured, folded into the Department of State, or permanently abolished. 

The Associated Press is reporting that the USAID shutdown is upending the livelihoods for nonprofit workers, farmers, and other Americans.

This pause in foreign aid and the potential USAID realignment may reflect a broader shift in U.S. development strategy, emphasizing financial tools like development finance over traditional grant-based aid. If that is the case, the Development Finance Corporation (DFC), an agency launched in the first Trump administration, could play a more central role in advancing the president’s foreign policy agenda.

The DFC is up for reauthorization later this year.