'6-Month-Long Hanmi Defense Cost-Sharing Negotiations Provisionally Settled... Announcement Possible as Early as the 1st'

USFK Korean Workers' 'Unpaid Leave' Situation Likely to End Early

[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] The Special Measures Agreement (SMA) on defense cost-sharing between South Korea and the United States has been tentatively agreed upon and is expected to be announced as early as the 1st. Following a phone call between the South Korean and U.S. presidents on the 24th regarding the response to the novel coronavirus disease (COVID-19), working-level consultations accelerated rapidly. South Korea and the U.S. agreed to change the negotiation cycle from an annual basis to a multi-year basis, and the increase in the amount was reportedly significantly reduced from $5 billion.

A diplomatic source said regarding the announcement of the negotiation results, "There are still steps remaining," and added, "We will have to wait until this afternoon." The defense cost-sharing negotiations, which had seen no progress despite seven face-to-face talks over about six months since last September, are now close to being finalized.

Earlier, Jung Eun-bo, South Korea’s chief negotiator for the defense cost-sharing talks, also expressed optimism about the final agreement. In an urgent video briefing the previous afternoon, he said, "Currently, South Korea and the U.S. are in the final stage of the defense cost-sharing negotiations and are making their best efforts to conclude the talks in a mutually beneficial manner," adding, "Since considerable consensus has been reached, we expect a final agreement soon."

Accordingly, the unpaid leave measures for Korean workers employed by the U.S. Forces Korea, which began today, are not expected to be prolonged. Approximately 4,000 Korean workers, nearly half of the total 8,500 employees, have been subjected to forced unpaid leave this time. The U.S. Forces Korea delivered the final decision notice of unpaid leave to Korean workers on the 25th.

The acceleration of the negotiations is believed to have been greatly influenced by the phone call on the 24th between President Moon Jae-in and U.S. President Donald Trump regarding COVID-19. During this call, President Trump requested medical equipment support, and President Moon responded that South Korea would provide support to the fullest extent possible.

The U.S. side reportedly significantly reduced the previously demanded defense cost-sharing amount of $5 billion. The initial increase requested by the U.S. was six times South Korea’s defense cost-sharing amount of 1.0389 trillion won last year, which had been consistently criticized as excessive. The South Korean delegation has maintained that an increase of around 10% is a fair and reasonable level.

The negotiation cycle is also reported to have been settled on a "multi-year" basis. The validity period of the Korea-U.S. SMA was initially 2 to 3 years after the first agreement in 1991, and 5 years for the 8th and 9th agreements. However, the 10th agreement was revised to a 1-year cycle at the U.S. side’s proposal.