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Developments in S. Korea-US defense cost-sharing negotiations

South Korea and the US have entered the final stage of negotiations aimed at concluding their 10th defense cost-sharing agreement as they wrangle over the total amount of South Korea’s contribution and the agreement’s period of validity. Since no agreement has been in place since the 9th agreement terminated at the end of 2018, the next question is whether the two sides’ war of nerves will culminate in a breakthrough in the negotiations.

South Korea and the US have been at an impasse over issues including the total amount of South Korea’s contribution and the agreement’s period of validity since December 2018, but there have been indications that they’re making a last-ditch attempt to reach an understanding since news broke on Jan. 22 that US Ambassador to South Korea Harry Harris had visited the Blue House at the end of 2018. Around that time, details about the negotiations that the two sides had kept secret to strengthen their bargaining position, including the total amount and period of validity, have started to be released.

Shortly before this, on Jan. 21, South Korean Foreign Minister Kang Kyung-wha acknowledged that “there have been major disagreements between South Korea and the US in the process of negotiating South Korea’s defense contribution.” Though the two sides have not yet reached a compromise, they appear to be going public with the status of the negotiations in a bid to gauge the terms each side is willing to accept.

“It would be fair to say that the two sides are making a last-minute attempt to narrow their differences,” said a source who’s well-informed about the cost-sharing negotiations on Jan 23.

The main points that are still being debated are how much South Korea will contribute to stationing US troops in South Korea and how long the agreement will be valid. At the end of last year, the US made a final offer based on instructions from the top of the government – presumably President Donald Trump himself. The US has reportedly indicated it wants South Korea to contribute US$1.2 billion (1.35 trillion won) and that it won’t accept less than US$1 billion (1.13 trillion won) under any circumstances. The US is also determined that the agreement will only last for one year.

The South Korean government has reportedly countered that its contribution cannot exceed 1 trillion won, which is regarded as a psychological red line for the public, and that it won’t accept a validity period of one year. Seoul has apparently concluded that a one-year period of validity isn’t practical since that would mean that negotiations would have to begin immediately for the next year’s agreement. South Korea’s counteroffer is for an agreement that would last for three or five years.

But South Korea is reportedly willing to rethink its demand for its contribution to remain below the symbolism threshold of 1 trillion won, which suggests that the final negotiations will focus on the agreement’s validity period. The Blue House has presumably hinted that it could accept the figure of US$1 billion proposed by the US.

The problem is on the American side. “It won’t be easy for the US [to give ground]. We have to focus on why the US suggested a one-year period in the first place,” said a diplomatic source.

In the middle of Dec. 2018, the US reset the negotiations for the 10th cost-sharing agreement, which had been proceeding normally, and asked for a validity period of one year. This was apparently part of an effort to review the cost-sharing agreements that the US has made with each country and draw up new principles that it would use to renegotiate cost-sharing agreements not only with South Korea but with Japan and with NATO (the North Atlantic Treaty Organization). Since the prevalent view in the diplomatic establishment is that the US is unlikely to change its position, it’s unclear whether the two countries will be able to reach a compromise.

By Kim Ji-eun, staff reporter

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