US and South Korea – Deal on Military costs

South Korea and the United States have struck a new deal that increases Seoul’s contribution for the cost of the American military deployed on its soil, overcoming earlier negotiations that had strained their decades-long alliance.

Background

The United States has maintained Army, Air Force, Navy, and Marine personnel in South Korea in support of its commitment to defend the later against any external aggression under the Mutual Defense Treaty.  The Combined Forces Command (CFC) based in Seoul was formed in 1978 with a US general at the helm.

The United States and the R.O.K. coordinate closely on the nuclear threat and the denuclearisation of the Korean Peninsula. With 23,468 soldiers, the continued presence of  U.S. forces in South Korea Is a clear vindication of its commitment to its Asia pivot strategy. 

South Korea began paying for the U.S. military deployment in the early 1990s, after rebuilding its economy from the devastation of the 1950-1953 Korean War.

Analysis

The United States and South Korea struck a hurried deal on the cost of the U.S. military presence, papering over a potential vulnerability in an upcoming U.S.-North Korean presidential summit. 

Last year, South Korea provided about $830 million, covering roughly 40 percent of the cost of the deployment of 28,500 U.S. soldiers whose presence is meant to deter aggression from North Korea. Trump demanded South Korea double its spending for the U.S. military deployment before the U.S. eventually asked for 1.13 trillion won ($1 billion). A five-year 2014 deal that covered South Korea’s payment last year expired at the end of 2018.

Chief negotiators from the two countries signed the new cost-sharing plan, which requires South Korea to pay about 1.04 trillion won ($924 million) in 2019, Seoul’s Foreign Ministry said in a statement. Seoul had sought a three-to-five-year agreement but only got one, so the two sides will have to return to the negotiating table in a matter of months.

The statement said the two countries reaffirmed the need for a “stable” U.S. military deployment amid the “rapidly changing situation on the Korean Peninsula.” The ministry said the U.S. assured South Korea that it is committed to the alliance and has no plans to reduce the number of its troops in South Korea. The deal, which involves the spending of South Korean taxpayer money, requires parliamentary approval in South Korea, but not in the United States, according to Seoul’s Foreign Ministry.

“The United States government realises that Korea does a lot for our alliance and peace and stability in the region,” chief U.S. negotiator Timothy Betts said Sunday in Seoul. “We are very pleased our consultations resulted in an agreement that will strengthen transparency and deepen our cooperation and the alliance.”

The Trump administration wants to strike similar deals with other allies who host large U.S. military bases, such as Japan and Germany, but South Korea's resistance have delayed it. South Korean observers worry that this marks a shift from a "rules-based international order, to a deal-based order," said Chung Kuyoun, a political scientist at Kangwon National University in Seoul.

The U.S. insists that it was not considering pulling any of its 28,500 troops out of South Korea if its financial demands were not met. "I regret that President Trump made the unilateral decision to suspend U.S.-South Korean joint military exercises during the first U.S.-North Korea summit in Singapore," said lawmaker Won Yoo-chul. "I am concerned that he may make a similar decision regarding the USFK in the second summit with North Korea." Legislation passed last year prevents the president from reducing USFK strength below 20,000 troops. On the rationale for drawing down US troops in the region, Trump previously cited what he called "a very big trade deficit" with the South, and claimed "our allies care about themselves”. "We lost money on trade, and we lose money on the military," Trump said in March. 

"Given that the economy is pretty bad, and income inequality is increasing, and average wages are going down," she said, "paying more money for the military forces will become a political cost for the current administration."

Assessment

Our assessment is that the willingness of the South Koreans to break the deadlock is to preempt a possibility that Trump might propose a withdrawal or reduction of American troops in South Korea as a negotiating tactic during his second summit with Mr. Kim which is set to take place at the end of Feb in Hanoi, Vietnam. We believe that the North Koreans will continue to argue that the American military threat had forced it to develop nuclear weapons. 

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