The results of the 11th ROK-US defense cost sharing agreement negotiations, which determine how much South Korea will share the cost of the USFK’s garrison, were announced at 4pm this afternoon.
According to South Korea’s chief representative for the negotiations on the defense cost-sharing agreement, Eun-bo Chung, the ROK and the United States first decided to freeze the total amount for the last year, which was a negotiating hiatus, to KRW 1.38.9 trillion, the level of the previous year. I did.
The total amount this year was agreed at KRW 1,183.3 billion, an increase of 13.9% from last year.
This is the largest increase in history, and the government explained that the amount is refunded to Korea, including the labor costs paid to Korean workers in the USFK.
Both sides of the ROK and the United States also decided to apply the rate of increase in the national defense budget for annual contributions from next year to 2025.
The rate of increase in defense expenditures is 5.4% this year and more than 6% from then on. If this trend is to increase, it is expected that in 2025, the last year, the total amount of about 1.5 trillion won will be paid.
It is worthwhile in that it prevented the “extortion pressure” of the former President of the United States, Trump, who had to pay close to about 6 trillion won, but it does not maintain the custom of linking the annual defense cost increase rate during the multi-year agreement with the inflation rate but not exceeding 4%. It is pointed out that it is unfortunate that it was not possible.
The following is the full text of Ambassador Eunbo Jung’s presentation.
Hello. He is the representative of the Korea-US defense cost sharing negotiations.
We visited Washington from March 5th to 7th and concluded the 11th Special Agreement to Share Defense Expenses between Korea and the United States.
Let me tell you the main content.
This agreement is a multi-year agreement that is valid for a total of six years from January 1, 2020 to December 31, 2025. Through this, we contributed to the stable presence of the USFK and the stable employment of Korean workers.
The total amount of contributions in 2020 was frozen at KRW 1.38.9 trillion, which is the level in 2019. Labor costs for Korean workers paid in advance last year and 3144 billion won for livelihood support paid during the period of unpaid leave by the government through a special law are expected to be counted.
The total contribution in 2021 is KRW 1,183.3 billion. The increase rate was 13.9%, which is a 7.4% increase in defense expenditures in the previous year, plus 6.5% of the increase in labor costs for Korean workers due to system improvement.
After that, we decided to apply the increase rate of our defense expenditures in the previous year for the total amount by year. The rate of increase in defense expenditure is a reliable and reasonable standard in that it reflects our financial capabilities and defense capabilities, is determined through deliberation by the National Assembly, and can be verified by anyone.
In this negotiation, the first priority was placed on the job security of Korean workers. First of all, we have dramatically improved the contents of the existing agreement to make efforts to use more than 75% of the labor cost of Korean workers as a share of defense expenses. As a result, the labor cost allocation ratio has been expanded from 75% to 87%, of which 85% is a content that imposes obligations, not just effort, as before.
Next, in the event of an agreement gap, we stipulated the provisions of the previous year’s level of payment of labor costs. This prevented the possibility of recurring unpaid leave in 2026, when this agreement was terminated.
Finally, let me tell you the significance of this agreement. First, it has created a reasonable and equitable level of defense cost sharing. This is the result of the government’s bold negotiations based on objective grounds and logic, while maintaining the basic framework of the defense cost sharing agreement despite the longest negotiation period ever. In particular, we prevented the establishment of new items of readiness that the US side strongly prepared for a rapid increase in contributions, and negotiated based on principles and standards, not just amounts.
Second, we realized diplomacy for the people. The government has dramatically increased the ratio of labor cost allocation and prevented recurrence of unpaid leave. In addition, by enacting a special law to support Korean workers, the government is responsible for the livelihood of our people.
In this process, the support of the people and the National Assembly was a great help. Finally, through mutually acceptable agreements, the two sides created a win-win agreement. As a result, a major issue of the alliance that had not been resolved for a year and a half was settled 46 days after the biden administration was inaugurated. We will do our best to complete the necessary procedures and bring the agreement into effect as soon as possible. Thank you.
(Photo = Courtesy of the Ministry of Foreign Affairs, Yonhap News)