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The Future of US-ROK Defense Cost Sharing

 
 

Negotiating the cost-sharing agreement between the Republic of Korea (ROK) and the United States for stationing U.S. forces in Korea is about to become contentious. Since 1991, the United States and South Korea have negotiated a Special Measures Agreement (SMA) as part of its commitment to the Mutual Defense Treaty of 1953. The SMA settles the ROK contribution to the non-personnel costs of stationing U.S. forces – that is, costs related to South Korean labor, utilities, rent, and construction. Under the terms of the current 9th SMA, Seoul pays around half of the overall cost of stationing U.S. forces in South Korea, roughly $821 million in 2016. Though this division of cost may seem fair to some, new U.S. President Donald Trump has signaled that he expects a higher contribution. Given present regional security challenges and the dramatic shifts in South Korea’s political landscape, such an expectation may be unrealistic.

A Transactional Approach to Burden Sharing

The basic premise of Trump’s demand for greater alliance defense-cost sharing is transactional. He believes our allies should do more to finance the costs of U.S. forces overseas since they contribute directly to the defense of those nations. On the face of it, this makes sense in South Korea’s case when one considers how the U.S. military presence has been essential to deterring North Korean aggression in the post-Korean War era. It makes even more sense considering the fact that the U.S. underwrote the modernization of the ROK defense establishment. Today, these very improvements in ROK defensive capabilities have naturally diminished the value of U.S. deterrence. Now more than ever, the ROK military is capable of imposing significant costs on North Korea in the event of any large-scale aggression even if the United States assumes a smaller role.

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Proponents of a robust and enduring U.S.-ROK alliance might counter that the ROK military is still in need of improving key capabilities like C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) and joint force interoperability. The implicit view is that the United States will continue to bridge shortfalls until South Korea can further develop these capabilities. Of course, one could argue that these capabilities are merely “icing on the cake,” not critical ones. After all, it is hard to imagine that those capabilities will decisively impact North Korea’s decision to commit acts of aggression. The shelling of Yeonpyeong Island in 2010 serves as a sobering reminder that the even the watchful eye of the sophisticated U.S.-ROK ISR network is no sure guarantee against North Korean threats. In the end, the reality is that South Korea’s military may have already matured to the extent that it can substitute a great deal of the U.S. deterrence capability.

The changing nature of the North Korean threat also fundamentally alters the purpose of U.S. forces in Korea and, in turn, the additional price that South Korea is willing to pay for non-personnel costs. The likelihood of North Korean aggression – namely, a significant conventional and asymmetric offensive campaign against South Korea – is becoming increasingly remote. If we take Pyongyang’s priorities in military technological investment at face value, then such an act seems highly unlikely. ICBM systems like the KN-08 and KN-14 are not directed at South Korea by virtue of their long-range capability. They are aimed squarely at the United States.

For this reason, the cost of deploying U.S. forces in Korea and systems like the Terminal High Altitude Area Defense (THAAD) should be viewed as directly serving U.S. interests. From a broader regional perspective, stationing U.S. forces in Korea also serves to counterbalance a rising China. It represents a real signal that the United States is committed to and willing to defend its interests in the Asia-Pacific should China aggressively pursue expansionist policies in Asia. Indeed, in light of these considerations, the transactional view of the U.S.-ROK alliance ignores how the United States is itself a recipient of its own services.

A Rough Road Ahead

The stunning reversal of political fortunes in South Korea is yet another complicating factor that could stymie efforts to increase Seoul’s contribution under the SMA. The Saenuri Party’s resounding defeat in the 2016 National Assembly elections and the impeachment of President Park Geun-hye paves the way for the election of Moon Jae-in, the former head of the Minjoo Party and the current leading frontrunner in South Korea’s presidential race.

On key security issues, the Minjoo Party’s platform would represent a substantive departure from that of President Park. Moon has called for a return to immediate engagement with North Korea and even the reopening of the Kaesong Industrial Complex. Should this more conciliatory Nordpolitik succeed, the North Korean military threat may lose its sense of urgency among the South Korean domestic audience. Without this, a threat of U.S. withdrawal might not persuade Seoul to absorb a larger share of the SMA defense burden beyond mere adjustments for inflation.

The option of canceling the THAAD deployment could also provide Seoul additional leverage in negotiating the SMA. The THAAD deployment has been a particularly divisive issue within the Minjoo Party, with some Minjoo lawmakers more willing to placate their Chinese neighbors amid intense political pressure. Most prominently, Moon expressed concerns that the move could escalate South Korea’s defense contribution under the SMA, an allegation which ROK Defense Minister Han Min-koo has denied. As the Minjoo Party seeks to consolidate its gains among the South Korean electorate, the United States may have to pay a steep cost for winning Seoul’s favor – one that could be reflected in the next SMA.

The political and security realities confronting the U.S.-ROK Alliance in the coming year have the potential to set up contentious deliberations at the 10th SMA. Washington and Seoul’s punitive approach to dealing with Pyongyang has exacted a heavy cost on Sino-Korean relations while doing little to address North Korea’s growing set of core military capabilities. For North Korea, things have been quite the opposite. It has been able to improve its capability to threaten the United States while waiting patiently for a relatively friendlier South Korean leadership to emerge from months of political turmoil. All of this suggests that South Korea may find itself with a strong playing hand prior to signing the next SMA.  Realistically, the United States may not be able to persuade its Korean partner to substantially increase its future commitments under the SMA. Should the leadership in Washington push too hard, they could risk harming a healthy U.S.-ROK Alliance, a scenario which is best avoided.

Charles Lee is an intelligence officer in the United States Marine Corps. He provides intelligence support to Korean Theater operational planning for III Marine Expeditionary Force. He holds a Masters in Public Policy from Georgetown University. The views expressed are the author’s alone and do not reflect the official position of the United States Marine Corps or Department of Defense

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