Tag: Cost Sharing

It looks like the Trump administration is remaining committed to keeping their promise of making the ROK government pay more for the upkeep of USFK:

The negotiations to renew South Korea and the United States’ deal on defense cost sharing are likely to be a “difficult” path, the top South Korean negotiator said Monday following the inaugural round of talks last week.

The allies kicked off the first round of the talks in Honolulu, Hawaii, last Wednesday to renew their five-year Special Measures Agreement governing Seoul’s share of the upkeep of the 28,500 American forces stationed in South Korea for defense against the North.

In the three-day “exploratory” talks last week, the two sides discussed at the “rudimentary level” the contributions each has made to the development of the South Korea-U.S. alliance and the positions they have over the next defense cost sharing deal, a senior government official said in a background briefing.

“Both sides shared the understanding that the current negotiations should be led in a way that intensifies the combined defense posture and further develops the South Korea-U.S. alliance,” the official said.

He noted they are likely to be “difficult negotiations,” adding that the allies may take several rounds of talks to reach a new agreement. His comments hint that the allies had wide differences as they entered into the negotiations, especially after President Donald Trump’s repeated call to raise South Korea’s share of the defense financing.  [Yonhap]

You can read more at the link.

What I will find the most interesting about the final cost sharing number that the ROK agrees to is whether or not they will exceed that number with the aid they plan to give to the Kim regime?:

Seoul and Washington will begin the first round of negotiations for the renewal of a cost-sharing agreement for American troops in Korea on Wednesday in Honolulu, Hawaii, the Ministry of Foreign Affairs said Monday.

Korea’s delegation to the three-day talks on the 10th Special Measures Agreement (SMA) will be headed by its top negotiator, Chang Won-sam, while Timothy Betts, acting deputy assistant secretary for plans, programs and operations at the U.S. State Department’s Bureau of Political-Military Affairs, will lead the U.S. side. Both delegations will include defense officials.

The SMA, a multi-year cost-sharing deal under the Status of Forces Agreement (SOFA), establishes what Korea will contribute to the non-personnel costs associated with keeping U.S. troops in the country.

Since 1991, the two countries have conducted routine negotiations to decide what Korea’s financial contribution should be, and the current five-year agreement, the ninth of its kind, is set to expire on Dec. 31.  (……..)

Negotiations for the latest burden-sharing deal, set to come into force in 2019, come at a time when U.S. President Donald Trump has indicated that he may demand Korea to pay a greater contribution.

Seoul currently pays about half of the cost of the stationing of some 28,500 U.S. troops on the peninsula, and its contribution has consistently increased over the years and reached over 950 billion won ($878 million) currently compared to some 150 billion won in 1991.  [Joong Ang Ilbo]

You can read more at the link, but the original Sunshine Policy was bought and paid for initially with a huge $500 million bribe to the Kim regime.  Follow on bribes described as humanitarian and economic aid continued under the Sunshine Policy.  The aid would total to about a $1 billion a year.  To put this into context the South Koreans were paying more money to the Kim regime annually then what they were contributing to the US-ROK alliance at the time.  Will history repeat itself?  We will likely find out this year.

The Korean government better be ready to pay more for USFK cost sharing because this is something that I suspect President Trump will not waver on:

The Korean Ministry of National Defense said on Monday it is working toward a “reasonable” solution to the issue of maintaining U.S. troops here, following U.S. President Donald Trump’s claim that Korea should pay a larger portion of the cost.

Moon Sang-gyun, the Korean Defense Ministry spokesman, said in a briefing Monday, “The U.S. Forces Korea’s contributions to defense on the Korean Peninsula, our financial capability, the security situation on the Korean Peninsula, and also enabling conditions for stability in the stationing of USFK will all be comprehensively taken into consideration to enable negotiations to set burden-sharing at a reasonable standard.”

Trump said during the joint press briefing with President Moon Jae-in Friday in Washington after their summit, “We are working together to ensure fair burden-sharing in support of the U.S. military presence in South Korea.” He upped pressure on Seoul ahead of negotiations later this year to decide a defense cost-sharing plan.

“Burden-sharing is a very important factor,” Trump also said at the joint conference, which is “becoming more and more prevalent, certainly in this administration.”

This marks the first time Trump has publicly raised the issue of Korea paying more for the stationing of U.S. troops since he took office in January, amid concern in Seoul over upcoming cost-sharing negotiations.

During his presidential campaign, Trump took an “America First” stance and has urged for U.S. allies to pay their fair share of the cost in defense.  [Joong Ang Ilbo]

You can read more at the link.

It seems like an inevitability that the ROK will end up paying more for the upkeep of the US-ROK alliance since it is an issue that President Trump continues to highlight:

President Moon Jae-in faced a demand on Friday by U.S. President Donald Trump to resolve trade imbalance between the two countries and pay more of the cost for the presence of U.S. troops in Korea, while winning assurances for stronger defense measures to deter North Korea’s rapidly advancing threats.

In the joint press conference that followed the Oval Office summit, Trump said the era of strategic patience with the North Korean regime has failed. “And frankly, that patience is over,” he added. After calling upon regional powers and all responsible nations to implement sanctions and pressure North Korea to end its nuclear and missile programs, Trump said now the goal is “peace, stability and prosperity for the region.”

The United States will defend itself and its allies, Trump said, and as part of that commitment, he said he wants to ensure that the cost of U.S. military presence in South Korea is equitably shared. “Burden sharing is a very important factor,” he said. “A factor that is becoming more and more prevalent, certainly in this administration.”

Trump also spoke of a “fair and reciprocal economic relationship” with South Korea, while complaining that the Korea-U.S. free trade agreement has increased the U.S. trade deficit with South Korea by more than $11 billion.  [Joong Ang Ilbo]

You can read more at the link.

Like I have said before President Trump’s comments about paying more for the THAAD system is setting conditions for next year’s negotiations for USFK cost sharing:

U.S. President Donald Trump should know that South Korea has already paid more than what he has billed the country for the deployment of a Terminal High Altitude Area Defense (THAAD) battery here, analysts said Tuesday.

Trump has insisted that Korea pay $1 billion for the anti-missile shield and his top aides also claim that the two countries should renegotiate the terms of the deployment agreement.

On top of the provision of the land for the missile defense unit, South Korea has already sustained huge damage from economic retaliation by China.

Company officials and analysts say that the value of losses Korea has suffered from retaliatory steps has to have topped $1 billion. They expect the amount to snowball to as high as $20 billion if friction over THAAD is not addressed.  [Korea Times]

You can read more at the link.

You can read more at the Korea Herald via a reader tip.

As I figured the statement made by President Trump in regards to South Korea paying for THAAD is related to upcoming US-ROK cost sharing negotiations:

National Security Adviser Gen. H.R. McMaster said Sunday that the U.S. will indeed pay for the roughly $1 billion THAAD missile defense system in South Korea, amid neighboring North Korea’s repeated ballistic test launches.

“What I told our South Korean counterpart is until any renegotiation, that the deals in place, we’ll adhere to our word,” McMaster told “Fox News Sunday.”

He spoke days after President Trump said South Korea should pay for the anti-missile system and hours after Seoul said that McMaster had assured its chief national security officer, Kim Kwan-jin, about the deal.

“The last thing I would ever do is contradict the president of the United States,” McMaster also told Fox News. “And that’s not what it was. What the president has asked us to do, is to look across all of our alliances and to have appropriate burden sharing-responsibility sharing. We’re looking at that with our great ally South Korea, we’re looking at that with NATO.”  [Fox News]

You can read more at the link.

I am surprised this poll showed 5% of people wanting to pay more to keep US forces in Japan.  It will be interesting to see what this number is whenever a similar poll in Korea is done:

Japanese citizens do not want to pay more for hosting U.S. military personnel and are now more likely to predict a downturn in bilateral relations, according to a Nikkei poll released Monday.

The survey taken this past weekend found that 57 percent of Japanese favored maintaining spending on U.S. bases at current levels, while 30 percent said Japan is spending too much. Five percent said Japan should spend more, the poll said.

Japan pays an average of 189.3 billion yen — or between $1.65 billion and $1.95 billion, depending on currency exchange rates — per year to support U.S. bases in the country as part of a five-year deal signed in 2015.  [Stars & Stripes]

You can read more at the link.

Where does this guy get his information from?

Seongnam Mayor Lee Jae-myung, one of the leading presidential hopefuls for the opposition bloc, said Tuesday that South Korea should pay less of the defense-cost sharing with the United States, clashing with calls by President-elect Donald Trump’s plan to get Washington’s allies to contribute more.

“South Korea’s defense-sharing cost should be on par with that of Japan,” Lee said during an interview with CBS Radio.

“Germany and Japan pay 18 percent and 50 percent, respectively, while South Korea shares stand at 77 percent,” he claimed.

Lee said the U.S. military presence in the country reflects Washington’s own interests and not that of South Korea. The mayor added the U.S. will suffer a great loss if it pulls its military out of South Korea.  [Yonhap]

You can read more at the link, but Japan pays 74.5% of US defense costs, not 50%, while South Korea pays about 50%. Mayor Lee is either blatantly lying for votes or is completely uninformed.  Either way it does not reflect positively on him.  I wonder if Mayor Lee wants to return to the old days when the Korean government paid the North Koreans more money to fund their nuclear and weapons program than what they spent funding the US-ROK alliance?

UPDATE:

From the Korea Times comes further information on how Mayor Lee came up with his 77% number:

Korea and the United States hold negotiations on cost-sharing for the upkeep of 28,000 American troops every five years under the Special Measures Agreement (SMA). Seoul pays about half the cost — 944.1 billion won ($782 million) and 932 billion won in 2016 and 2015, respectively. The last SMA was made in 2014 and the next negotiations for 2019 through 2023 are likely to begin later this year, according to the foreign ministry.

However, Seongnam Mayor Lee Jae-myung, a liberal presidential hopeful, claimed Tuesday that South Korea is actually paying more than Japan and Germany, both of which have a U.S. forces presence.

According to him, Germany and Japan pay 18 percent and 50 percent of the total costs, respectively, while South Korea share stands at 77 percent.

His calculation includes indirect costs such as providing land for bases and firing ranges for free along with an exemption from taxation and benefits such as cheaper electricity and telephone charges — things not included in the SMA negotiations.

In addition, civic groups also insist that the SMA should include the nation’s support such as providing police to guard bases and troops under the Korean Augmentation to the United State Army (KATUSA) program. [Korea Times]

You can read more at the link, but if Mayor Lee wants to play the game of including costs not in the cost sharing agreement than the US side can play that game to.  So how much does the use of the US military’s stealth bombers and B-52’s cost?  Better yet what about the cost of using the US space based satellites and sensors in support of South Korea?  What is the cost of all the US troops that would come to the peninsula in case of a crisis?  I could go on and on with costs the US military can add to the cost sharing agreement that right now the ROK is not paying for.

The next cost sharing negotiations to begin this year could end up being really interesting if a committed left wing candidate like Mayor Lee is elected and insists on South Korea paying less.

Basically this advisor is stating in the interview that Trump has to say one thing on the campaign trail, but once elected President he will be more flexible on the policies he is campaigning on:

A President Donald Trump will neither abandon South Korea nor let the Asian ally defend itself against threats from North Korea, a top foreign policy adviser to the presumptive Republican presidential nominee said.

Walid Phares, an international relations scholar who serves as Trump’s foreign policy brain, made the remark in an interview with Yonhap News Agency and Yonhap News Television, stressing that Trump’s remarks, such as his call for Seoul to shoulder all costs for U.S. troop presence, should be taken only as an expression of “principles.”  (………..)

“At this point in time he is a candidate. He’s a Republican candidate, practically speaking. So, he will talk about principles, and those principles mean burden-sharing. He wants the South Korean government to share more,” Phares said. “There is a principle … that America alone cannot be defending the world. It does not mean that America wants to withdraw from the world.”

Trump will see “what the South Koreans can offer, or what the Japanese would offer, what our friends in the Middle East could offer. Then he would negotiate. He is good at negotiations,” Phares said of the call for defense burden-sharing.

Such negotiations do not mean Trump will abandon South Korea, Phares said.

“If South Korea is threatened by either North Korea, or other players, a Trump administration would be standing by the South Koreans. There is no idea that we’re going to let South Korea or Japan defend themselves against a threat,” he said.

Referring to Trump’s call for South Korea to shoulder all costs for American troop presence, Phares said that the real estate tycoon “wants to show the maximum” as a negotiator before settling for reality. And such maximum positions could evolve over time, he said.  [Yonhap]

You can read the rest of the interview at the link, but the bottom line is that if Trump is elected the ROK government best be ready to pay more USFK cost sharing than the 50% they are paying now.  Considering Japan is currently paying 75% I would not be surprised if that is the number that Trump may want to settle on.