Discussions on Defense Cost-Sharing, Previously Unconnected, Accelerate After Summit Call

Tentative Agreement Reached on Korea-US Defense Cost-Sharing Talks After 6 Months
No Resolution in 7 Negotiations, Face-to-Face Talks Impossible Due to COVID-19 Pandemic
Korea-US Leaders Discuss COVID-19, Agree on Alliance Cooperation Amid Difficulties

[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] The 11th Special Measures Agreement (SMA) negotiations on defense cost-sharing between South Korea and the United States, which had been dragging on for six months since last September, have entered the final stages with a sudden acceleration. The South Korean and U.S. delegations began reducing their significant differences through non-face-to-face working-level talks starting last weekend and have reached a provisional agreement. With all working-level consultations completed, a final decision is expected as early as the 1st.

Until mid-last month, both sides conducted seven rounds of face-to-face negotiations, including intensive talks between the chief representatives of South Korea and the U.S. during the 7th meeting, but no notable common ground was found. The U.S. side maintained its stance of a substantial increase in defense cost-sharing and comprehensive negotiations, despite the unprecedented forced 'unpaid leave' situation imposed on Korean workers at U.S. military bases in Korea. Furthermore, the U.S. officially rejected South Korea's proposal for 'prior settlement of labor costs' presented after the 6th meeting in January, intensifying the pressure. Subsequent non-face-to-face negotiations also saw no significant progress.

The rapid reduction in the gap between South Korea and the U.S. appears to have been influenced by a phone call between the two heads of state regarding the novel coronavirus disease (COVID-19). On the 24th of last month, U.S. President Donald Trump requested medical equipment support, to which South Korean President Moon Jae-in responded that he would provide maximum assistance. He also evaluated the currency swap agreement between South Korea and the U.S. as a very timely measure contributing to financial market stability. A diplomatic source explained, "Negotiations accelerated after the two leaders' phone call," adding, "It seems they recognized the need for alliance cooperation in difficult times."

The provisionally agreed accord reportedly includes a significant reduction in South Korea's defense cost-sharing amount, which initially reached $5 billion, and extends the negotiation cycle to five years. The U.S. delegation, led by Senior Advisor James DeHart from the State Department, had proposed $5 billion last year, which is six times the previous defense cost-sharing amount. After facing widespread criticism for the excessive figure, the U.S. lowered it to around $4 billion, but the South Korean delegation countered with an increase rate of about 10%, maintaining that the U.S. proposal was excessive.

The South Korean and U.S. delegations reportedly agreed to reduce the increase in defense cost-sharing while extending the negotiation cycle to five years. Since the first SMA in 1991, the negotiation cycle had been two to three years, with the 8th and 9th agreements set at five-year intervals. However, in the 10th agreement, the cycle was changed to one year at the U.S. side's proposal, which drew considerable domestic criticism. The one-year cycle negotiations inevitably led to sharp annual increases in defense cost-sharing.

[Image source=Yonhap News]

With the provisional agreement on defense cost-sharing reached, the unprecedented unpaid leave situation for Korean workers at U.S. military bases in Korea, which began on the 1st, is expected to be resolved early. However, it seems difficult to avoid criticism that the U.S. used Korean workers as leverage to gain an advantageous position in the negotiations.

Bloomberg News reported on the 31st of last month (local time), a day before the unpaid leave began, under the headline "Unpaid Leave for U.S. Base Workers Hits South Korea and Alliance," pointing out that this unpaid leave situation disrupts daily life on bases housing about 28,000 U.S. troops and could accelerate the reorganization of the alliance maintained to deter not only North Korea but also China.

Jeong Eun-bo, South Korea's ambassador for the SMA negotiations, expressed regret, saying, "The U.S. side's decision to implement unpaid leave as scheduled does not appropriately reflect the negotiation situation between the two countries," and urged, "Measures should be taken to allow Korean workers subject to unpaid leave to return to their workplaces promptly." He added, "The government will strive to minimize any damage to Korean workers at U.S. military bases under all circumstances by preparing necessary support measures and working toward a swift conclusion of the negotiations."

This content was produced with the assistance of AI translation services.