S. Korea seeks systemic reform in financial support for USFK

SEOUL, In thorny defense cost-sharing talks with the United States, South Korea has sought to overhaul its contribution system itself, not just minimize a hike in its burden, a government official said Friday.

The move is part of efforts to set an "appropriate, reasonable" amount of Seoul's spending for the 28,500-strong U.S. Forces Korea (USFK) through enhanced transparency.

"We have emphasized the need to improve the system to enhance procedural transparency and responsibility in the fields of installation construction and logistical support," the official told reporters on the condition of anonymity. "However, the U.S. sticks to a position that the USFK commander's rights related to military necessity shouldn't be infringed."

The allies had 10 rounds of negotiations throughout last year but failed to reach a deal.

Negotiations led by veteran diplomats to renew the Special Measures Agreement (SMA) are virtually done, and it has become a matter of political decisions by the allies' leaders.

Washington has demanded Seoul offer up to US$1.2 billion in 2019, up 41 percent from last year's contribution of $850 million. The previous contract, signed in 2014, expired at the end of 2018.

South Korean officials view 1 trillion won ($880 million), as the "psychological Maginot Line" for its taxpayers.

Their money is used to fund wages for South Korean employees at USFK bases, construction and logistical support.

The problem is a lack of detailed data and other information on the USFK's expenditures and standards of calculation.

So far, South Korea has provided money in a lump-sum method, while Japan has used the "program-project based cost" settlement system.

Plus, South Korea has provided the USFK with a number of indirect support, including land and tax benefits.

The USFK, in fact, received almost 300 billion won in "legacy cash" from Seoul's contribution at the end of last year, which it did not spend, according to a source.

That's a reason why South Korea has considered paying its share in the form of goods or services, instead of money, for construction and logistical support.

"The two sides discussed the issue in the SMA talks But it would be difficult to introduce such changes immediately," the source said. "For now, it's more urgent to sign a new contract."

Another sticking point is the contract period. The U.S. first called for a 10-year agreement, while South Korea suggested a three-year deal.

They reportedly narrowed the differences to five years in November, but the U.S. abruptly proposed a one-year accord a month later.

In case of a multiple-year contract, Washington's negotiating team once said the annual hike rate should be fixed at 7 percent, arguing the USFK cost has jumped beyond inflation rates, added the source.

South Korea does not want frequent talks with the U.S. on splitting the defense cost amid lingering doubts over the health and future of the alliance.

Source: Yonhap news Agency

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