Tag: Cost Sharing

Here is the latest on the US-ROK cost sharing issue straight from the U.S. President himself:

U.S. President Donald Trump said Monday that he “rejected” Seoul’s defense cost-sharing offer and pressed Korea “to pay for a big percentage of what we’re doing.”  

“Now, they’ve offered us a certain amount of money, and I’ve rejected it,” Trump said at a White House coronavirus task force press briefing Monday, as Seoul and Washington struggle to sign a new bilateral Special Measures Agreement (SMA) on the upkeep of some 28,500 U.S. troops stationed in Korea. 

After months of negotiations, Korean officials at the end of last month indicated that the two sides were on the brink of signing a new deal after negotiators neared a tentative agreement which had Seoul paying a higher contribution than their previous accord but not anywhere near the amount demanded by Washington.  

U.S. officials told Reuters earlier this month that Trump decided to turn down Seoul’s offer to raise its contribution by at least 13 percent compared to the previous agreement.

“Look, you know, we’re doing a tremendous service,” said Trump in the briefing. “We have a wonderful feeling and a wonderful relationship with each other, but we have to be treated equitably and fairly.”

However, Trump appeared to deny a report that he was personally negotiating with President Moon Jae-in terms for a reduction of U.S. troops in Korea with four possible scenarios.  

“It’s not a question of reduction,” Trump said. “It’s a question of: Will they contribute toward the defense of their own nation?”

Joong Ang Ilbo

You can read more at the link, but I think what is going on is that President Trump wants a larger cash payment from the ROK while in the past the ROK has used a lot of goods and services to offset cash payments.

For example they pay the salaries of the Korean employees that work for USFK. That is money that is going back into the Korean economy. They also pay for new buildings and renovations which once again is done by Korean workers putting that money back into the economy. The ROK will also purchase civilian vehicles and give them to USFK for official use as well. The vehicles purchased is also money going back into the Korean economy.

I don’t know, but I would not be surprised that President Trump being a business man is pushing for more cash payments to USFK instead of goods and services. With the ROK parliamentary elections over I think the real negotiating can actually begin.

As I have long said, I did not expect a cost sharing deal to get done before the April 15th Korean parliamentary elections and it appears that will be the case:

U.S. President Donald Trump has rejected South Korea’s offer to raise its contribution to shared defense costs by at least 13 percent, a news report said Friday.

Trump made the decision last week after consultations with Secretary of State Mike Pompeo and Secretary of Defense Mark Esper, Reuters said, quoting unidentified current and former U.S. officials.

Esper made a phone call to South Korean Defense Minister Jeong Kyeong-doo earlier this week to press Seoul to quickly agree to much higher contributions, it said.

Yonhap

You can read more at the link, but politically there was no way the ruling party would agree to a major increase in defense spending. By the Trump administration turning down the modest increase, the Moon administration can go into the election saying they tried, but the Trump administration is too greedy and that is why all you Korean employees that work on U.S. bases are laid off.

The next decision by the Moon administration will be if they want to wait until after the U.S. Presidential election to make a deal.

Previous reporting has said the US and the ROK are close to a new cost sharing deal, but it has not been reached soon enough to stop the furlough of thousands of Korean employees:

Following months of warnings, the U.S. military put 4,500 South Korean base employees — about half its local workforce — on unpaid leave indefinitely Wednesday after the allies failed to agree on a new defense cost-sharing deal.

The furlough — the first of its kind — was a blow to the alliance and joint military readiness to fight on the divided peninsula, which commanders say already has been jeopardized by restrictions on movement aimed at preventing the spread of the coronavirus.

Stars & Stripes

You can read more at the link.

I wonder if the coronavirus test kits that South Korea has agreed to send to the U.S. had any bearing on the ongoing US-ROK cost sharing negotiations:

U.S. and South Korea are close to reaching a defense cost-sharing deal, a negotiator said Tuesday in Seoul on the eve of American military plans to put half of its local work force on unpaid leave.

U.S. Forces Korea was able to keep about 4,500 South Korean employees determined to be essential for maintaining “life, health, safety and minimum readiness.”

Stars & Stripes

You can read more at the link.

Here is the latest on the USFK furlough issue:

U.S. Forces Korea (USFK) said Thursday it has completed sorting out its Korean employees that provide essential duties to be excluded from a potential furlough in case Seoul and Washington fail to work out a defense cost-sharing deal in time.

The USFK has warned that some of its 9,000 Korean workers could be forced to go on unpaid leave starting in April should Seoul and Washington fail to reach a deal on the Special Measures Agreement (SMA) that regulates their sharing of the upkeep of the 28,500-strong USFK on Korean soil.

“The USFK has completed its Partial Furlough Implementation Process analysis for Korean national employees who will be retained to provide life, health, safety and readiness services,” USFK said in a release, adding that it is reviewing the results with the union of the Korean employees.

Joong Ang Ilbo

You can read more at the link.

The furloughs are coming:

U.S. Forces Korea (USFK) issued a 30-day advance notice of a potential furlough to its Korean employees, apparently to further pressure Seoul in defense cost-sharing negotiations.

Korea and the United States have been engaged in talks over how much Seoul should pay for the upkeep of the 28,500-strong USFK under their cost-sharing deal, the Special Measures Agreement (SMA), but have yet to reach a deal. “Their loss will have an impact on readiness,” USFK commander Gen. Robert Abrams said. “Unfortunately, without an agreed upon SMA, we must continue to prepare for a potential furlough.”

Absent an agreement, the furlough will begin on April 1, it said.

The U.S. Department of Defense earlier said it will fund the salaries of key Korean workers who provide life, health, safety and other readiness services, but USFK sent the notice, as required by U.S. law, to all its nearly 9,000 Korean employees as it is still unclear who will be subject to the potential furlough, it said.“We’ve explored all options that remain within my authority to delay a potential furlough due to the SMA lapse, and we will continue to explore funding alternatives up to and even during a required furlough,” Abrams said.

Joong Ang Ilbo

Here is the latest on the US-ROK cost sharing negotiations:

The latest push from Washington came Wednesday, after the Defense Department hinted that the cost-sharing agreement might be high on the agenda, if not the highest, in the upcoming Feb. 24 meeting between Defense Minister Jeong Kyeong-doo and his U.S. counterpart Mark Esper.

“We’ve got to work through the agreement for funding of forces, so that will obviously be a topic we will discuss,” Jonathan Hoffman, assistant to the secretary of defense for public affairs, said in a press briefing. “He’s looking forward to this meeting next week.”

When asked about the holding of joint military exercises this spring, Hoffman said he had nothing to say on the matter, which some observers say indicates the U.S. is prioritizing the cost-sharing issue in the upcoming meeting above all other matters.

Washington pressured Seoul further during the press briefing by giving details on a plan to potentially furlough 9,000 Korean workers on USFK bases.

Korea Times

You can read more at the link, but I continue to believe that nothing will get done on this until after April’s parliamentary elections. The Moon administration knows they are going to end up paying more and likely don’t want to give in on this issue until after the elections. If this is the case than the Korean workers on U.S. bases will be furloughed.

I don’t think a cost sharing agreement getting done until after the parliamentary elections in April. The ROK will end up paying more and they would likely rather pay more after the election. It would not look good going into an election and having the appearance of backing down to the U.S. on the cost sharing issue. In the meantime the Korean national employees on U.S. bases will be out of work beginning April 1st:

Yi Myong Hwa, who has worked for the U.S. military for nearly half her life, has been getting headaches and wakes up these days to a feeling of dread.

Yi is one of some 9,000 South Korean employees who received notice late last month that they may be forced to take unpaid leave beginning on April 1 if the United States and South Korea fail to agree on a new defense cost-sharing agreement.

“The furlough notice hit us like a bolt of lightning,” the 46-year-old fire department dispatcher told Stars and Stripes in a recent interview at her office at Camp Casey, the closest U.S. base to the border with North Korea.

“Korean employees have been working for U.S. troops and the security of the United States and South Korea,” she said. “It’s outrageous that we’re being used as a bargaining chip.”

Stars & Stripes

You can read more at the link.

Here is the latest on the status of US-ROK cost sharing talks:

 Foreign Minister Kang Kyung-wha said Thursday that South Korea and the United States still have “big” gaps in their negotiations over Seoul’s share of the cost for stationing American troops here despite a broadening of “mutual understanding.”

Her remarks came as the two countries are preparing for the seventh round of negotiations expected to take place in Seoul this month to determine Korea’s payments for the upkeep of the 28,500-strong U.S. Forces Korea under the cost-sharing deal, called the Special Measures Agreement (SMA). 

“Though gaps are still big, the two countries have deepened mutual understanding much more, and we are in a situation where we have to make an agreement based on that understanding,” Kang said in a press briefing.

Yonhap

You can read more at the link, but I don’t see this getting done before the April parliamentary elections in Korea. In whatever deal that is reached it is pretty clear that Korea is going to end up paying more and that won’t look good politically for the Moon administration. It makes sense for them to wait until after the April elections to make a deal.