Rate increases, 'Trump risk' at heart of second round of USFK cost sharing talks

The second round of negotiations for the 12th Special Measures Agreement (SMA) to determine South Korea's share of the costs for stationing U.S. Forces Korea (USFK) after 2026 was held in Seoul on Tuesday.

The second round of negotiations between South Korea and the United States on sharing the costs for the upkeep of the 28,500-strong U.S. troops in South Korea, starting in 2026, is held at the Korea Institute for Defense Analyses in eastern Seoul on Tuesday. [YONHAP]

The second round of negotiations for the 12th Special Measures Agreement (SMA) to determine South Korea's share of the costs for stationing U.S. Forces Korea (USFK) after 2026 was held in Seoul on Tuesday.

The discussions typically focus on the total sum of Seoul's share of USFK stationing costs and the criteria for determining payment rate increases.

A critical issue is whether the current principle of increasing South Korea’s annual defense contributions based on growth in defense spending can be changed.

The meeting began at 9 a.m. at the Korea Institute for Defense Analyses in eastern Seoul and was led by Lee Tae-woo, South Korea's chief negotiator from the Ministry of Foreign Affairs, and Linda Specht, the U.S. chief negotiator from the State Department.

This follows their initial meeting in Honolulu, Hawaii, from April 23 to 25, where they exchanged basic positions.

Previously, the United States described South Korea’s defense cost-sharing as a “powerful investment” in the Seoul-Washington alliance.

In contrast, South Korea has argued that the renegotiated balance should be at a “reasonable level” to ensure the “stable stationing of USFK and to strengthen the allies’ combined defense posture” — reflecting subtle tensions over the size and criteria for determining contributions.

Under the current six-year deal, ending in 2025, South Korea agreed to raise its payment by 13.9 percent from the previous year to $1.03 billion for 2021 and to increase the payment every year for the subsequent four years in line with the rise in Seoul's defense spending.

Korea's contribution to U.S.-ROK defense cost-sharing [NAM JUNG-HYUN]

According to the mid-term defense plan at the time, South Korea’s average annual defense spending increase from 2021 to 2025 was 6.1 percent, which has been criticized as being excessively burdensome for the nation.

Experts have pointed out that linking defense contributions to defense spending is contradictory, as these are inherently complementary.

A CH-47 Chinook helicopter moves at Camp Humphreys in Pyeongtaek, Gyeonggi, the largest U.S. Army base in the world, on Tuesday as the second round of negotiations for the 12th Special Measures Agreement (SMA) to determine South Korea's share of the costs for stationing U.S. Forces Korea (USFK) after 2026 took place. [YONHAP]

Previous multi-year agreements typically reflected inflation rates rather than defense spending, with annual increases capped at 4 percent. The 2019 10th SMA also saw an 8.2 percent increase based on defense spending, but that was a special one-year agreement.

Following the 11th SMA in 2021, the Moon Jae-in administration effectively acknowledged the flawed increase method. Former Foreign Minister Chung Eui-yong said before the National Assembly in August 2021 that "it was unavoidable to link the increase to the defense budget growth rate," but clarified that this would not be a premise for future negotiations.

The current negotiations, which began 20 months before the expiration of the existing agreement, appear to be an effort to mitigate the so-called "Trump risk."

In the United States, the Special Measures Agreement (SMA) is considered an administrative agreement and can be unilaterally terminated at the president's discretion — raising concerns that any agreement could be overturned.

Former U.S. President Donald Trump has exacerbated these concerns by calling South Korea a "very wealthy country" during his recent election campaign. In an interview with Time magazine on April 30, he falsely stated, "They agreed to pay billions of dollars, and now probably now that I’m gone, they're paying very little." There are also fears that Trump could impose additional costs related to the defense of the Korean Peninsula.

"Instead of complicating the SMA established by the previous administration, [the United States] might demand cost-sharing through a new agreement between South Korea and the United States," said Park Won-gon, professor of North Korean Studies at Ewha Womans University. "South Korea should be prepared to bear some costs while identifying potential concessions it can secure in return."

BY PARK HYUN-JU [seo.jieun1@joongang.co.kr]