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Money Matters

기사승인 2020.06.14  06:56:35

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- Who shoulders the cost of the United States and South Korea’s military defense?

 

   
 

BACK IN June 25, 1950 when North Korea invaded South Korea during the Korean War, the United States helped South Korea by sending armed forces. South Korea and the United States have been tied with a military alliance ever since; however, this 67-year alliance appears to be facing a crisis as the two nations are failing to reach an agreement on how to divide the costs for military defense.

 

The alliance

   Signed in October, 1953, the Mutual Defense Treaty is the military alliance that forms the backbone of the relationship between South Korea and the United States after the hostilities of the Korean War ceased. One of its primary aims was to provide security to South Korea which depended on U.S. support to deter attacks from North Korea. The treaty not only guarantees South Korea’s national security, but also allows the United States to station military forces in South Korea under the United States Forces Korea (USFK), serving as an important alliance benefiting both nations.

   However, despite the merits that the treaty provides for both sides, there were disagreements ever since the 1990’s* over how much South Korea should contribute to offset U.S. costs to station military forces on the Korean peninsula. Known as the Special Measures Agreement (SMA), these negotiations on the defense cost agreements take place every five years, where the two countries hold talks on how to divide the defense costs. According to Global Asia, as specified in the Status of Forces Agreement (SOFA)—an agreement made in accordance with the Mutual Defense Treaty—South Korea was responsible for providing the United States with land and facilities while the United States was obliged to bear the expenses of stationing U.S. forces. Reflecting the poor economic condition of South Korea at the time the treaty was arranged, it was decided that the United States would be responsible for the full cost. However, this changed when South Korea underwent rapid economic development in subsequent decades. As South Korea’s economy improved substantially, the United States began to urge South Korea to shoulder a larger portion of the costs of stationing U.S. forces. Because South Korea still required U.S. support to combat North Korea’s military threats, the two countries adopted the SMA in 1991 and Korea began to pay a share of defense costs ever since. According to The Ministry of Foreign Affairs (MOFA), although the rates up to 2002 varied with each agreement—including 8% in 1999 and 25.7% in 2002—the rates were maintained under 10% since the mid-2000’s.

 

Splitting the costs

   Though the SMA discussions frequently took place in previous years, recent negotiations in November, 2019 especially revealed sharp differences between South Korea and the United States. According to The Diplomat, on Feb. 10, 2019, the two countries signed the 10th SMA deal that increases Korea’s contribution to the defense costs by approximately 8% more from that of the previous year. However, with the 10th SMA expiring at the end of 2019, U.S. President Donald Trump urged Korea to shoulder an even greater share of costs for the 11th SMA. Seven rounds of negotiations were held between September, 2019 and March, 2020 to renew the 11th SMA, which reached a tentative agreement on April 1, 2020 that Korea raises its contribution to the defense costs by at least 13%**. However, President Trump broke the agreement on April 10 in the final approval stage, leaving the two countries at a standstill in their negotiations.

   According to the Korea Institute for Defense Analyses (KIDA), the United States’ decision at the 11th SMA negotiations brought about various clashing opinions from both countries that delayed the outcome of the agreement. While the two parties formed a consensus on a multi-year negotiation rather than one every five years, in terms of the total contribution amount, the United States demanded approximately $5 billion a year—4 to 5 times the amount agreed in the 10th SMA. To complicate things further, while the Trump administration calls for a revision to the current framework of the SMA to newly include indirect costs such as rotation costs of the U.S. forces and off-shore training and transportation costs, South Korea insists that the cost sharing should be determined within the existing SMA framework, remaining firm in their decisions despite the pressure from the United States. The two countries also disagree with considering the effective period of negotiations: while the Korean government seeks to reach an agreement as soon as possible, the United States asserts that negotiations should proceed with sufficient time, most likely because the Trump administration is occupied with preparations for the U.S. presidential election taking place this November***.

   The South Korean government also emphasized its contribution to the alliance: in addition to paying their proportion of the defense costs, they have also made non-monetary contributions such as supporting funds for the construction costs of Camp Humphreys located in Pyeongtaek, the purchase of U.S. weapons, and the continuous increase of defense budgets. However, the Trump administration still demands that Korea increases its burden-sharing expenses.

 

Impacts of the delay

   With the negotiations showing no sign of progress ever since President Trump turned down the tentative agreement, concerns arise over how the disagreement can affect the alliance between the two countries or the stakeholders involved. According to The Korea Herald, the delays in finalizing the SMA has already negatively affected Korean workers in the USFK; almost half of these 9,000 workers were put on an unpaid leave beginning April 1, 2020 following President Trump’s demand in increasing the defense costs. The workers were notified on March 25 that they would be furloughed and should remain on leave until further notice. “If unpaid leave persists, there is the possibility that USFK workers will be fired under the U.S. domestic law,” said Park Won-gon (Prof., Dept. of Int’l Studies & Languages and Lit., Handong Global Univ.) to BBC Korea. Especially during a time when part-time or any kind of jobs are difficult to find due to the outbreak of COVID-19, the collapse of the SMA negotiations has jeopardized the livelihood of these Korean workers.

   With workers on the verge of unemployment, the situation is becoming urgent not only for South Korea but for the United States as well, as it will be difficult for the two countries to carry out joint military training****. This means that the USFK will have to adjust its operations due to the reduction in manpower, disrupting military preparedness to fight against possible nuclear threats from North Korea. As a result, the indefinite unpaid leave of the Korean USFK workers will undermine their support for the two countries’ alliance; this also escalates many calls from South Koreas for the U.S. military to leave the peninsula*****. Furthermore, the delays in negotiations can also reduce support towards the alliance from the South Korean public. The alliance was first formed in the aftermath of the Korean War, providing stability and prosperity to South Korea. Because of this, the KIDA states that many South Koreans highly value the alliance and the dedication of the United States to help Korea; however, the excessive pressure to increase shares in defense costs is likely to create a negative public opinion calling for the alliance to focus only on business transactions******.

 

*                 *                 *

 

   The halt in negotiations as a result of President Trump’s rejection brings forth uncertainties in the future of the U.S.-South Korea relations. Although South Korea and the United States are currently working to set up conferences to further discuss the sharing of defense costs, with both countries adamant in their stances, the negotiations for the 11th SMA appears unlikely to be made soon in the near future.

 

*Global Asia

**The Korea Herald

***Yonhap News Agency

****BBC Korea

*****Stars and Stripes

******KIDA

 

Kwon Kyu-hee rbgmlk@yonsei.ac.kr

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