EAI Asia Security Initiative Working Paper No. 30

Author  

Won Gon Park is Professor of International Studies, Languages and Literature at Handong Global University. He previously served as Director of Office of External Cooperation at Korea Institute for Defense Analyses (KIDA), US Foreign Policy Analyst at the Center for Security and Strategy, KIDA and Editor of The Korean Journal of Defense Analysis. Professor Park received his Ph.D. in International Relations from Seoul National University, his M.A. in Political Science from Boston College (U.S.) and his B.A. in Political Science from Southwest Baptist University. His areas of interest include U.S. Foreign and Security Policy, International Relations of East Asia, North Korea and ROK-U.S. Alliance.

I. Introduction

In 1991, the Republic of Korea (ROK) and the United States (U.S.) agreed to sign a Special Measures Agreement (SMA) on Article V of the Status of Forces Agreement (SOFA) as a consequence of the Mutual Defense Treaty between the ROK and the U.S. Through this agreement, the ROK provides financial support for the expenses incurred in the stationing of United States Forces Korea (USFK). Since 1991, the ROK and the U.S. have signed eight SMAs, the last of which was the 8th SMA with a validity period of five years, from 2009 through 2013, which was ratified by the ROK National Assembly in March 2009. Negotiations between the ROK and the U.S. for the 9th SMA began in 2013 when negotiators from the ROK and the U.S. met for the first round of talks in Washington in early July.

As one of the key agendas of the ROK-U.S. alliance, defense cost-sharing functions as an important influence factor in the continuation of this bilateral alliance. This is because the process and the outcome of cost-sharing negotiations have profound implications on the parliaments of both countries and on domestic public opinion. Moreover, defense cost-sharing presents a considerable burden on the ROK’s national finance and there are key issues that generate differences of opinion between the ROK and the U.S. Particularly among South Koreans, there is a “bandwagon effect” on cost-sharing. They acknowledge the necessity and importance of the ROK-U.S. alliance but show a rather negative attitude toward the shouldering of costs.

In particular, in the 9th SMA negotiations to take place from 2013, the U.S. is likely to reflect its changes in foreign policy strategies in the aftermath of the 2008 economic crisis. As the U.S. has been emphasizing the cost-sharing responsibilities of its allies due to its economic difficulties, negotiations for ROK-U.S. defense cost-sharing are not likely to be easy. In June 2012, Carl Levin, chairman of the Senate Armed Services Committee, during a press conference mentioned the need for a readjustment of the ROK’s defense cost-sharing contribution due to the overwhelming costs of stationing the USFK.

This paper was devised with an aim to suggest more productive and efficient negotiations between the ROK and the U.S., ahead of the ninth ROK-U.S. defense cost-sharing negotiations in 2013. The issue of defense cost-sharing was considered a symbol of the ROK-U.S. alliance, and in particular, the U.S. has shown a tendency to perceive the host nation’s economic support as a yardstick by which to measure the cohesion of the bilateral alliance. Therefore, in case differences of opinion between the ROK and the U.S. grow increasingly acute during defense cost-sharing negotiations, it cannot be ruled out that the overall stability of the bilateral alliance may be harmed.

In particular, I would like to emphasize that ROK-U.S. defense cost-sharing negotiations shall be pursued from a more holistic approach, taking into account its benefits for the ROK-U.S. alliance in general, not merely for accounting purposes. The issue of defense cost-sharing shall consider various factors, including the economic situation and changes in the security environment of both the ROK and the U.S., besides other detailed requirements. However, at the same time, for its objective improvement, problems in the existing ROK-U.S. defense cost-sharing negotiations shall also be addressed.

Therefore, this paper first seeks to analyze the background and history of ROK-U.S. defense cost-sharing and, after differentiating key relevant issues related to ROK-U.S. defense cost-sharing negotiations, suggest key factors to consider and future directions for ROK-U.S. defense cost-sharing, from the perspective of the ROK.

II. Background and History of ROK-U.S. Defense Cost-Sharing

1. Defense Cost-Sharing System

Defense cost-sharing, as a form of “defense burden-sharing” with a broader meaning, refers to the burden-sharing of various resources (territory, facilities, personnel, etc.) and monetary, financial costs that are required for common defense activities by more than two countries (trade alliance) in pursuit of their common military objective—joint defense.

Of the above common resources, those that focus on the monetary, financial costs refer to “cost-sharing,” and in particular, those that focus on the stationing costs of foreign troops refer to “stationing cost-sharing.”

Among economic resources, monetary cost-sharing refers to “direct cost-sharing” and cost-sharing in which cash is not directly paid, such as reduced real estate, tax, and public utility charges, and manpower support refers to “indirect cost-sharing.”...(Continued)