This year’s defense cost will rise to KRW 1,183.3 billion, 1.5 times that Trump wanted in the end

The government on the 10th This year, it is possible to pay 1,183.3 billion won for the cost of stationing the USFK, and increase it to about 1.5 trillion won after 5 years.Disclosed the contents of the 11th Special Agreement on Defense Expense Contributions (SMA).

In a video message, “Through this agreement, we are able to contribute to the stable presence of US forces in Korea,” said Eun-bo Chung, the chief representative of the Korean negotiating team, in a video message that afternoon. The first priority was placed on the stability of employment in the company,” he explained.
He said, “Through this agreement, we have created a reasonable and fair level of defense cost sharing. This is the result of the government’s upholding the basic framework of the defense cost agreement and negotiating confidently based on objective grounds and logic.” “In particular, it prevented the establishment of a new item of readiness that the US side strongly insisted on for a rapid increase in contributions, and negotiated based on principles and standards, not just amounts.“He said.
As a result, the unprecedented state of the pact that lasted for about one year and three months from January 1, 2020 has been resolved. In particular, the negotiations, which have been repetitive for more than a year, have been concluded 48 days after the inauguration of the Biden administration. Meaning that the Trump administration fired a flare to restore the wounded ROK-US alliance.There is.
The gist of this agreement is ▶The agreement period will be maintained from 2020 to 2025. 6 yearsHowever, the agreement has already passed in a blank state. Defense expenses in 2020 will be frozen at the amount of 2019 (1.389 trillion won)▶2021 is recognized as the first year of the agreement, compared to the previous year KRW 1,183.3 billion, up 13.9%Korea shares the future. ▶Future The total amount of defense expenses paid by Korea each year is also increased by applying the rate of increase in defense expenses from the previous year.Is to do it.
Whenever the ROK-US negotiates defense costs, there are four issues that differ in their position: the total amount in the first year, the annual increase rate, the term of the agreement, and system improvement. It is common to conclude negotiations by bundling packages and receiving and receiving them.

Regarding the total amount, the government made a proposal in March of last year to raise 13.6% for the first year and reached an agreement between the US and South Korea, but President Donald Trump failed because he wanted a larger increase. The 13.9% increase rate for the first year agreed this time is not far from the government’s last proposal. The six-year agreement period reflects the Korean side’s position for a multi-year agreement.
The question is the annual increase rateto be. Regarding the standard rate of increase in defense spending, the government has decided to invest 30.7 trillion won in financing from 2021 to 2025 in the mid-term defense plan announced last year. In terms of annual average growth rate, 6.1% per year It is going up.

Applying this during the defense expenditure agreement period, 2020 (frozen) 1,389 billion-2021 (13.9%↑) 1, 183.3 billion-2022 (2021 defense expenditure growth rate 5.4%↑) 1, 24.7 billion-2023 (expected average) Growth rate 6.1%↑) 1 trillion 323.2 billion won-2024 (6.1%↑) 1 trillion 403.9 billion won-2025 (6.1%↑) KRW 1,488.6 billionto be.
President Trump, who was obsessed with a dramatic increase in the total amount, initially threw an irrational number of five-fold increase, but in March 2018, when the first meeting of the actual defense cost negotiations (10th SMA) was held, the first requested amount increased by 1.5 times, approximately 1,4400 trillion. It was 100 million won. Applying the expected growth rate of defense expenditure each year according to the 11th agreement agreed this time, In 2025, the last year of the agreement, the total amount that President Trump wanted would be exceeded.
In fact, the total amount for the first year of 1,183.3 billion won is a huge increase. During the 10th negotiations, the last request of the Trump negotiating team was lowered to 1.15 trillion won, because the amount exceeds that amount.

At the time, the annual increase rate requested by the Trump negotiation team was’fixed by 7%’. The 9th Agreement stipulated that the defense cost was raised every year to reflect the previous year’s inflation rate, but the increase rate was not to exceed 4%. The Trump negotiating team said, “During the 9th Agreement (2014-2018), the actual cost of stationing US troops exceeded the increase. He claimed to have stood,” and asked for a fixed increase of 7% per year to compensate for these losses. But The Korean side objected that the 7%, which is close to twice the upper limit of the previous increase rate, was too high, and it was also negative for the fixed rate of increase.

However, in the agreement concluded this time, the annual increase rate was not set as a number, but the rate of increase in defense expenditure suggested as a standard has already been formalized as a mid-term defense plan. This means that there are not many cases where the average rate of increase changes rapidly. Accordingly, it is pointed out that 6.1% is a de facto fixed increase rate within the period of this agreement. Until now, Korea has never accepted a fixed increase rate. In addition, the agreement does not put an upper limit on the annual growth rate.
In the end, there is room for a large part of what President Trump wanted in terms of the total amount or the annual increase rate to be achieved.to be. President Trump, who left, was the winner in the end, and the effect is the reason why the talk of President Joe Biden enjoyed publicly. Kim Jeong-seop, senior research fellow at the Sejong Institute, said, “You may think that this is a good save for President Trump’s first appearance, but first, there was an agreement between the US and the ROK on the line last year. It would have been difficult to lower the total amount.”It is not wrong to say that the Biden administration has benefited from the Trump effect.I said.

“Even if you consider that the Trump administration made unreasonable demands, 13.9% is truly a significant increase in history. There are even a lot of carryovers up to now that were not used up“If we increase our defense budget to increase our degree of independence, it is correct to lower the defense cost. It is contradictory to link this, and it is questionable whether the government is willing to change it.”
Regarding this, a senior official from the Ministry of Foreign Affairs said, “It is important that the USFK is more stable, and for this purpose, it is important to contribute responsibly for the alliance in accordance with our national strength.” Also, “the rate of increase in defense expenditures depends on the domestic budget situation and security situation, etc. It is an indicator that represents our situation,” he said. “I think that the domestic situation and the security situation will be linked, so that it will become a more realistic defense cost-sharing system.”
CEO Jung Eun-bo also said through a video, “The rate of increase in defense spending reflects our financial capabilities and defense capabilities, and it is a reliable and reasonable standard that anyone can check if it is confirmed through the National Assembly’s deliberation.”
Reporters Yoo Ji-hye, Jin-woo Jung, and Hyun-ju Park [email protected]