US asking S. Korea to increase defense cost share, while using funds for relocation

Posted on : 2017-07-16 11:20 KST Modified on : 2017-07-16 11:20 KST
Total relocation costs are $10.8 billion, which the US insists on covering only 8% of
 speaks at a press conference at Yongsan Garrison in Seoul
speaks at a press conference at Yongsan Garrison in Seoul

“We will always defend our allies. As part of that commitment, we are working together [with South Korea] to ensure fair burden sharing in support of the US military presence in South Korea. Burden sharing is a very important factor. A factor that is becoming more and more prevalent, certainly in this [US] administration,” said President Donald Trump during his joint press conference with South Korean President Moon Jae-in at the White House on June 30 following their summit. Trump’s remarks imply that he will keep pressuring South Korea to increase its share of defense costs. Cost-sharing has once again become a bone of contention for the South Korea-US alliance.

On top of this, the US Forces Korea (USFK) relocation to Pyeongtaek, Gyeonggi Province took nearly ten years longer than originally planned and the cost of the move has greatly increased, while a debate continues to rage over the US allocation of South Korea’s defense contribution to pay for the relocation cost, which it had agreed to pay for itself. The current situation’s disconnect with the principles of the agreements even appears in recent American documents.

 USFK Commander at the time
USFK Commander at the time

In written testimony submitted to the US Senate Armed Services Committee at the end of April, USFK Commander Vincent Brooks explained, “Construction of new facilities under YRP is 100 percent R.O.K. funded, while those under the LPP are 100 percent U.S. resourced. Total project costs are approximately $10.8B, of which only 8 percent of that comes from U.S. appropriated funds.”

A report titled “US-South Korea Relations” that the US Congressional Research Service (CRS) released in late May quoted Brooks’ written testimony and appears to shift the blame for the delay of the US base relocation and for the cost increase to South Korea.

The debate about increasing costs and allocation of funding centers on South Korea‘s defense contribution, which is to say what Seoul provides, both in cash and in kind, to USFK according to the Special Measures Agreement (SMA) that Seoul and Washington have renewed every two to five years since 1991. There are three categories of support: wages for South Koreans who are hired by USFK (in cash), military construction costs (in cash and kind) and military supply costs (in kind). Article 5 of the Status of Forces Agreement (SOFA), states that the US is responsible for all American military costs aside from facilities and areas. South Korea’s defense contribution this year is 950.7 billion won, in line with the 9th version of the agreement (in force from 2014 to 2018).

USFK‘s position is that there is nothing wrong with using South Korea’s defense cost share to cover the cost of the LPP base relocation (which the US was supposed to pay for itself). The cost of relocating the base, USFK contends, counts as a “military construction cost,” which is one of the legitimate uses of South Korea‘s defense contribution. Since 2008, the year after news broke about USFK’s appropriation of the defense cost share, the South Korean government has also repeatedly backed up the American position and argued that the two countries had an understanding on this point. In Oct. 2008, Defense Minister Lee Sang-hui said that “the two governments had reached an understanding about using the defense contribution for the LPP” and that he agreed “with the need to continue this practice.” In Feb. 2009, the Ministry of Foreign Affairs and Trade released a statement saying that “in keeping with the opinion of the National Assembly, the government has soberly reviewed this matter with the Americans and as a result has reconfirmed the previous conclusion that it is inevitable for the defense cost share to be used on the LPP.” This is still Seoul‘s position today. “The government’s position on this matter remains the same as before,” said a press officer for the Defense Ministry during a recent telephone conversation with the Hankyoreh.

But the understanding that Seoul and Washington reached in 2000 was not recorded in any official documents at the Defense Ministry. This understanding has been left uncodified since then, and it was not even reported during the National Assembly‘s review of the motion to ratify the LPP agreement in 2002. This raises questions about whether the understanding is legally binding. “Since the LPP agreement only had to do with the base relocation project and was separate from the defense cost-sharing agreement, using South Korea’s defense cost share to cover the cost of the LPP is a violation of the Special Measures Agreement, which defines how that contribution can be used,” said Ha Ju-hui, a lawyer with MINBYUN-Lawyers for a Democratic Society. Ha is the chair of MINBYUN‘s committee for researching issues related to the US military.

The controversy about a “prior agreement” for allocating the defense cost share for the base relocation goes back a decade. On Jan. 18, 2007, Burwell Bell, USFK Commander at the time, made a shocking statement at the Foreign Correspondents’ Club in Seoul. He said that South Korea’s defense cost share would be used to cover the cost of moving the US 2nd Infantry Division from various bases in Gyeonggi Province to Pyeongtaek. Seoul at once lodged a forceful complaint with the US, but what it was protesting was not USFK’s plan for allocating the funds itself but the fact that this plan had been made public.

USFK Commander Vincent Brooks
USFK Commander Vincent Brooks

This was made apparent in a secret cable titled “MOFAT [Ministry of Foreign Affairs and Trade] Protests General Bell‘s Public Remarks” that the US Embassy to South Korea sent home the next day. “MOFAT Director General for North American Affairs Cho Byong-jae expressed a strong protest about two aspects of the public remarks General Bell had delivered [. . .] Second, and more serious, was Bell’s ‘explosive’ mention of the fact that some of the funds paid by the ROKG [Republic of Korea government] under SMA would be used to fund the transfer of the Second Infantry Division (2ID), an aspect of the funding agreement that had not yet been explained to the National Assembly or the public,” the cable said. “Bell‘s mention of it could make the National Assembly approval process for SMA in February more difficult.”

Previously, the US had signed a Land Partnership Plan (LPP) agreement with South Korea in South Korea - part of its own plan to integrate and redeploy US 2nd Infantry Division bases, which were then scattered around Gyeonggi Province. In 2004, an agreement on plans for Yongsan Garrison in Seoul were added at South Korea’s request. In explaining the US base redeployment plan to the National Assembly at the time, the South Korean government said the principle would be payment of costs by whoever was responsible: South Korea for the Yongsan base relocation, the US for the 2nd Infantry Division relocation. Indeed, the appendix and annexes to the LPP agreement stipulated that the US would provide alternative facility funding for 15 of the 28 bases scheduled for closure with the relocation.

In addition to violating this principle and channeling its share of defense costs toward the LPP, the US has gone a step further by using it as a means of pressuring South Korean into paying a larger share.

An Apr. 4 US Senate Armed Services Committee report titled “Inquiry into U.S. Costs and Allied Contributions to Support the U.S. Military Presence Overseas” stated that “South Korean SMA contributions are not keeping pace with the growth in U.S. costs.”

The report also said, “While the U.S. plans to pay a significant amount of these [LPP] costs with host nation support payments from South Korea, doing so will result in less South Korean funding being available for other U.S. expenses.”

“It is therefore critical that the growth in South Korea‘s contributions keep pace with U.S. costs,” it concluded.

Burwell Bell
Burwell Bell

Underlying the US’s arguments was an attempt to increase South Korea’s share ahead of the ninth round negotiations for the defense share agreement (2014-2018) to go into effect the following year. During the eighth round (2009-2013), the two sides had stipulated an annual 4% ceiling on the inflation rate from the previous year. But in 2014, the first year under the ninth agreement, South Korea’s share rose 5.8% from the previous year to 920 billion won (US$808 million).

Civil society representatives and military experts are calling the US’s demands unreasonable and arguing that the so-called “agreement” between South Korea and the US on diverting the share toward the LPP serves as invalid grounds. Kyungnam University professor Kim Dong-yeop, a former reserve lieutenant colonel, put it bluntly by saying, “The defense cost share means South Korea paying for a portion of the stationing costs for US, which is a different thing entirely from the costs of redeploying US forces.”

“Negotiations for the first year are going to be crucial when the tenth round of defense share negotiations start next year,” Kim predicted.

“We need greater transparency and accountability in the US military’s use of the defense share,” he said.

Park Seok-jin of the group Civilian Military Watch said, “By keeping aside and earning interest off of the unspent portions of the defense cost share and spending the share on LPP costs, the US is showing disregard for South Korea’s State Finance Act, which mandates transparency and soundness in state budgeting and accounts.”

USFK’s current plan is to finish relocating from Yongsan to Pyeongtaek by the end of this year, with its other base relocations to be done by next year. With new administrations taking office this year on both sides, another wrestling match over defense shares and USFK base relocation costs has already begun.

By Cho Il-jun, staff reporter

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