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Chung Eun-bo, South Korea’s special envoy for defense cost-sharing negotiations with the US, takes questions from reporters after announcing the details of the SMA negotiation with James DeHart, the U.S. chief negotiator for the defense cost-sharing agreement in February 2019. (Hankyoreh photo archives)

South Korea will pay 1.18 trillion won (US$1.04 billion) as its share of US Forces Korea (USFK) defense costs this year, with additional annual increases over the next four years corresponding to the rate of increase in national defense spending for the preceding year, according to an agreement reached with the US.

This means that while South Korea is paying 144.4 billion won (US$127 million, 13.9%) more this year than the 1.04 trillion won (US$914 million) it was responsible for in 2019, it will be responsible for a share totaling roughly 1.5 trillion won (US$1.32 billion) by the time the agreement elapses in 2025.

Essentially, the South Korean government has guaranteed that its defense cost-sharing contribution will rise by 50% over the course of the agreement.

Given US President Joe Biden’s emphasis on restoring alliance relationships, there had been hopes that one-sided demands made by the Trump administration would be revised following Biden’s inauguration. But in the end, the agreement stayed within the framework of earlier negotiations, which is likely to prompt criticism about an excessive increase.

In a press release Wednesday, South Korea’s Ministry of Foreign Affairs (MOFA) announced that negotiations on the 11th Special Measures Agreement (SMA) had concluded and released the specifics of the agreement, which was reached in Washington from Friday to Sunday.

MOFA said the agreement would be in effect for six years, running from 2020 (retroactively) to 2025. The two sides agreed that South Korea’s total contribution for 2020 would be frozen at the 2019 level (1.04 trillion won, or US$914 million), given the hiatus of coverage following the expiration of the 10th SMA on Dec. 31, 2019.

Since the South Korean government has already paid USFK 314.4 billion won (US$276.39 million) in personnel costs and living stipends for furloughed South Korean employees and over 400 billion won (US$351.54 million) for ongoing military construction and logistics support programs, Seoul only has 300 million won (US$263.66 million) left to pay for 2020.

MOFA explained that South Korea’s total contribution for 2021 was calculated by combining the 7.4% rate of increase of the South Korean defense budget in 2020 (76.8 billion won, US$67.53 million) with the 6.5% increase in the wages of South Korean employees in USFK (67.5 billion won, US$59.37 million).

“The 13.9% figure is an exceptional rate of increase that takes into account higher personnel costs resulting from institutional improvements,” MOFA stressed.

MOFA touted those institutional improvements as a “success.” The agreement raises the minimum allocation ratio of personnel costs in the defense cost-sharing contribution from the previous 75% to 87%, with 85% of that mandatory. The new agreement also specifies for the first time that if the agreement terminates without being renewed, workers’ wages can be paid at the same level as in the previous year.

By Kim Ji-eun, staff reporter

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