Seoul, Washington reach a deal on sharing USFK cost

Chang Won-sam, the top negotiator in defense cost sharing negotiations shakes hands with Timothy Betts, a deputy assistant secretary at the U.S. Department State, after holding their fourth round of talks on the renewal of a defense cost sharing contract, at the Korea National Diplomatic Academy in southern Seoul, June 26. / Yonhap

By Lee Min-hyung

South Korea will likely pay around 1.05 trillion won ($934 million) in defense cost sharing with the United States this year, with the months-long negotiations in their final stages.

They have also agreed to renew the contract annually instead of the current five-yearly interval, sources directly involved with the matter said Friday.

The Ministry of Foreign Affairs plans to make an official announcement and hold a press briefing on the sometimes fractious talks, Feb. 10. The ministry is the authority in charge of negotiations for the Special Measures Agreement (SMA) governing the cost sharing.

“Seoul and Washington plan to sign a provisional contract on the compromise,” one source said.

The South and the U.S. have shared the cost burden for the United States Forces Korea (USFK) since 1991, and renewed the contract every two to five years.

Chang Won-sam, a former ambassador to Sri Lanka, will sign the agreement with Timothy Betts, deputy assistant secretary of the U.S. Department State, in Seoul. The two men have led the delegations from each side in the talks.

The ministry declined to confirm other details, as fine-tuning of this year's SMA is still underway.

An annual renewal of the contract could pose a short-term financial burden to Seoul, after Washington reportedly demanded it pay “much more” when renewing the deal for 2020, citing various military factors.

For the South, the best scenario would have been to renew the contract every three or five years. President Donald Trump has called on U.S. allies to pay more for defense cost sharing under his “America First” strategy.

Trump has stepped up criticism of the allies, saying they are “taking total advantage” of U.S. taxpayers and do not pay enough for defense cost sharing with Washington. In December, last year, Trump said; “America should not be doing the fighting for every nation on Earth, not being reimbursed in many cases at all. If they want us to do the fighting, they also have to pay a price.”

South Korea was no exception, being initially asked to pay around $1.6 billion for the upkeep of U.S. troops here. Around 28,500 USFK troops are stationed in the South.

Seoul reacted strongly to the demand, and the two sides reached a consensus by cutting the amount in exchange for shortening the expiration period.

Starting March last year, South Korea and the U.S. have held a series of negotiations to renew the SMA, but failed to reach a compromise even after the contract expired at the end of December.

Last year, Seoul paid 960.2 billion won for the defense cost sharing. During the negotiations, South Korea said it could only pay up to 1 trillion won annually, but the U.S. did not accept this.

Military officials said the U.S. may ask Seoul to pay more for joint military exercises, such as Ulchi Freedom Guardian and Foal Eagle. In addition, Washington is likely to raise the issue of Seoul paying for the deployment of U.S. strategic weapons here when negotiations start for the 2020 SMA.

“Even though the defense ministry does not negotiate the SMA, we are going to keep in close contact with our U.S. counterparts over the agreement to solidify our security alliance,” an official from the Ministry of National Defense said.