US withdrawing $5 billion demand for defense cost-sharing 'win-win' for allies

James DeHart, senior adviser for security negotiations and agreements at the U.S. Department of State's Bureau of Political-Military Affairs who heads the U.S. side for the 11th Special Measures Agreement between Seoul and Washington, speaks during an interview with South Korean reporters at the American Center Korea in Yongsan-gu, Seoul, Dec. 18. Joint Press Corps

By Jung Da-min

The United States has withdrawn its $5 billion (about 6 trillion won) demand for defense cost-sharing with South Korea, according to media reports citing diplomatic sources. The reports said the two allies are likely to reach an agreement for a 10 percent to 20 percent increase to Seoul's contribution for next year's defense cost-sharing.

The 11th Special Measures Agreement (SMA) negotiations between Seoul and Washington are still underway, with the sixth round of negotiations set to be held in January next year. The 10th SMA was concluded in February 2019 with Seoul increasing its contribution to around 1 trillion won for 2019, up 8.2 percent from the previous year.

Experts said Thursday that the 10 percent to 20 percent increase would be a “realistic” option for the two countries as they are facing another issue of denuclearization negotiations with North Korea while the year-end deadline set by the North is approaching amid a stalemate in talks.

They said the increase estimate is also realistic considering the negotiations with Seoul would set a standard for the U.S. which has to deal with upcoming negotiations with other allies. But it is also likely that the U.S. may have asked South Korea to contribute more to the alliance by purchasing more U.S. weapons.

Kim Jun-seok, a politics professor at Dongguk University, said such an agreement would be a “win-win” for both countries, as the U.S. side has so far claimed it would “force” Seoul to pay $5 billion. He said Seoul has nothing to lose from a deal involving a 10 percent increase, while there would be three “benefits” for U.S. President Donald Trump as well.

“The 10 percent increase would not cause anger among South Koreans and it would prevent negative messages over friendly relations between the two allies,” Kim said. “It would also help the U.S. in upcoming negotiations with other countries. ... Lastly, it would want to show solidarity with the South when dealing with the North Korea issue, as the year-end deadline set by the North is about to pass.”

Other experts pointed out, however, that it remains to be seen whether the U.S. would ask South Korea to pay “more,” aside from the defense cost-sharing for the upkeep of 28,500 United States Forces Korea (USFK) troops.

“Trump has been linking the defense cost-sharing issue with two other issues: pressuring Seoul to purchase more U.S. weapons and offsetting the U.S. trade deficit with South Korea,” said Park Won-gon, an international relations professor at Handong Global University. “If such media reports on the 10 percent to 20 percent increase of Seoul's contribution turn out to be correct, it is likely that the South Korean side has clearly told the U.S. side about its plans to buy more weapons.”

Shin Beom-chul, a senior fellow at the Asan Institute for Policy Studies, said it also remains to be seen whether the U.S. would want to form a separate agreement to ask Seoul to contribute to the upkeep of U.S. strategic weapons outside the Korean Peninsula.