Korea, NATO agree to open procurement talks for $9.9 billion defense market

National Security Adviser Wi Sung-lac briefs reporters on President Lee Jae Myung's participation in the NATO summit in Ankara, Tuesday. Yonhap

ANKARA — Korea and NATO agreed to open negotiations on a basic procurement agreement that would allow Korean defense companies to participate in NATO's joint procurement market, estimated to be worth 15 trillion won ($9.9 billion) annually, National Security Adviser Wi Sung-lac said Tuesday.

Wi said the agreement was reached on the occasion of a meeting between President Lee Jae Myung and NATO Secretary General Mark Rutte in Ankara, where the NATO summit is being held from Tuesday to Wednesday. Lee is attending the summit at Rutte's invitation.

"The agreement, once concluded, will provide an institutional framework for Korean companies to participate in NATO's joint procurement market," Wi said during a press briefing, pointing out that the market is estimated to be worth 15 trillion won per year.

“The agreement would give Korea a foothold to enter NATO's defense market, the world's largest,” Wi added, referring to NATO's 32 member states, which make up the world's largest defense procurement market with a roughly 55 percent share of global defense spending.

Wi said Korea and NATO also discussed harmonizing defense standards as part of their expanding defense cooperation.

"We expect the discussions to improve Korean companies' access to NATO's defense market by aligning with NATO's ongoing standardization efforts,” he said.

Addressing Canada's decision, Monday, to select Germany over Korea for its submarine project, a move widely seen as reflecting NATO considerations, Wi said Korea and Canada "continue to have broad potential for cooperation across various sectors as comprehensive strategic partners."

He noted that Lee and Canadian Prime Minister Mark Carney had already discussed the submarine project extensively during a phone call over the weekend.

He also noted that the two saw little need to revisit the issue during their brief meeting on the sidelines of the NATO Summit, instead focusing on prospects for expanding cooperation in a range of new areas, particularly artificial intelligence.

A senior Cheong Wa Dae official, meanwhile, dismissed speculation that harmonizing defense standards with NATO would significantly affect Korea's relations with other countries.

"Joint operation of weapons systems is expected to bring benefits such as lower maintenance costs, but that does not mean Korea is becoming part of NATO," he said.

"We do not expect this to have a significant impact on our relations with countries such as China and Russia," he added, stressing that Korea would continue to cooperate with NATO as a partner country.