US-ROK Defense Cost Sharing, 13% Increase and Multi-Year Contract Finalized... Agreement Expected by March

Atmosphere for Swift Resolution... Expected Signal for Alliance Strengthening

[Asia Economy Reporter Lee Seon-ae] Negotiations for the Korea-US Special Measures Agreement (SMA) on defense cost-sharing are gaining momentum. Accordingly, there is growing anticipation that this will serve as a signal for strengthening the Korea-US alliance.

On the 11th (local time), US CNN reported that the defense cost-sharing negotiations could be concluded within weeks, with a high possibility of agreeing on a multi-year contract that increases the amount by 13% compared to the previous agreement. A Ministry of Foreign Affairs official stated on the 12th, "Korea and the US are closely working to reach a mutually acceptable agreement as soon as possible," but added, "Since negotiations are ongoing, we cannot confirm specific details of the discussions."

The "13% increase proposal" was a tentative agreement reached by Korea and the US in March last year. Although it was approved by the negotiation teams and even the foreign ministers of both countries, then-President Donald Trump rejected it, preventing a final agreement. Therefore, it is believed that both sides have resumed negotiations under the Joe Biden administration and are discussing based on the already agreed "13% increase proposal."

A 13% increase is quite a high rate compared to previous years. Given that Korea has already stated this as the maximum limit, it is widely expected that President Biden, who characterized Trump's defense cost pressure as "extortion," is likely to sign the agreement at this level.

It is also reported that both Korea and the US have already agreed on the necessity of a multi-year contract to ensure the stability of the alliance.

As the Ministry of Foreign Affairs explained the results of the 8th meeting held via video conference on the 5th, stating, "Based on the spirit of the alliance, serious discussions have been conducted to resolve ongoing differences and reach a mutually acceptable agreement," it shows that the negotiations are progressing smoothly.

It is also known that Foreign Minister Chung Eui-yong and US Secretary of State Antony Blinken agreed during a phone call on the 12th to work toward a swift conclusion of the defense cost-sharing negotiations.

Both Korea and the US reportedly want to quickly resolve the defense cost-sharing issue and focus on much more important issues such as North Korea's nuclear problem, responses to the novel coronavirus disease (COVID-19), and climate change.

Korea and the US are expected to sign the agreement as early as this month or by March at the latest. This is also evident from the fact that the usual procedure, where the US Forces Korea notifies that Korean workers paid through the cost-sharing funds may be placed on unpaid leave starting April 1 if negotiations are not concluded by the end of January, was omitted this year. This is analyzed as reflecting respect for the alliance and the expectation that an agreement can be reached by the end of March.

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