[News Terms] The Special Measures Agreement on Defense Cost-Sharing to Decide U.S. Forces Korea Defense Costs

South Korea and the United States have each appointed representatives to negotiate the 12th Special Measures Agreement (SMA) on defense cost-sharing, which will take effect from 2026, signaling the start of negotiations.

On the 4th, when the Freedom Shield (FS) South Korea-U.S. joint exercise began, a U.S. Forces Korea Stryker armored vehicle was on standby in Dongducheon-si, Gyeonggi-do.
[Image source=Yonhap News]

The SMA is a special agreement that stipulates the amount South Korea will bear for the cost of the U.S. military presence in Korea. Since the formal signing of the Korea-U.S. Mutual Defense Treaty in 1953, South Korea has indirectly supported facilities and sites under Article 5 of the Status of Forces Agreement (SOFA), which provides the legal basis for the U.S. military presence in Korea. However, since the conclusion of the SMA in 1991, South Korea has shared defense costs. This change was made by creating an exception to the provision in Article 5, Paragraph 1 of SOFA, which required the U.S. to bear expenses for the U.S. forces except for facilities and areas, thereby requiring the host country to share the costs. Starting with the first agreement in 1991, a total of 11 SMAs have been concluded to date. The 11th agreement was a multi-year agreement valid for six years from 2020 to 2025.

In the early stages of the SMA, South Korea shared costs for Korean workers employed by the U.S. Forces Korea, military construction, combined defense capability enhancement projects, and logistics support. From the 8th SMA (2009), the scope was adjusted to include labor costs, military construction, and logistics support.

Whenever negotiations for the defense cost-sharing agreement took place, controversies arose over the U.S. side’s excessive demands for increases. Since there was no clear regulation on the upper limit of the increase in the cost-sharing amount, which is the core issue of conflict between South Korea and the U.S., the structure inevitably relied on negotiations each time. The two countries sharply disagreed over the interpretation of expressions specified in the agreement such as ▲military necessity ▲military requirements ▲necessary cash amount ▲appropriate measures.

During the negotiation of the 11th SMA concluded in 2021, the chief negotiators from both sides agreed on a 13% increase based on the total amount. However, then-President Donald Trump demanded an increase of $5 billion, five times the existing contribution, and refused to approve the agreement. Subsequently, after the inauguration of the Joe Biden administration in March 2021, the new agreement was signed. The 11th SMA, effective until 2025, raised South Korea’s defense cost-sharing for the U.S. Forces Korea by 13.9% in 2021 compared to 2020 (KRW 1.1833 trillion), with annual increases reflecting the defense budget growth rate for the following four years.

Meanwhile, Lee Tae-woo, former Consul General in Sydney, was appointed as South Korea’s representative for the 12th agreement. He is a diplomat who has served as head of the North Korea Nuclear Diplomacy Planning Division, North America Bureau counselor, and counselor at the Embassy of the Republic of Korea in the United States. Leading the U.S. delegation is Linda Specht, Senior Advisor for Security Negotiations and Agreements at the State Department’s Bureau of Political-Military Affairs. She has served as a foreign policy advisor to the U.S. Strategic Command and worked at the U.S. Consulate in Adana, T?rkiye. It is unusual for both countries to form negotiation teams for the next SMA with about two years remaining until the expiration of the 11th SMA. This has led to analysis that it may be in consideration of former President Trump’s potential re-election in the upcoming U.S. presidential election in November.