Korea, US tentatively agree to defense cost-sharing deal

Korea and the United States have tentatively reached an agreement on how to share the costs of maintaining the 28,500-strong U.S. Forces Korea (USFK) here, according to a government source, Wednesday, when half of the Korean staff at U.S. military bases here went on unpaid leave due to a lapse in the deal to cover their wages.

In addition, the source said the deal, also known as the Special Measure Agreement (SMA), is likely to once again be effective for five years, unlike the one signed in 2019 that acted only as a one-year stopgap after the two sides failed to conclude a long-term deal.

Since 1991, Korea has partially funded the U.S. troops' stay under the SMA and Korea's contributions are used to cover the wages of the 8,600 Korean workers as well as payment for construction projects and logistical support.

“In the broad scheme of things, the two sides have clearly reached the stage of putting the finishing touches on the negotiations, though various possibilities remain still open,” the source said.

Although how much Korea will pay remains unknown, the two sides have narrowed the gap to an amount “at a reasonable level,” according to the source.

Negotiations have been deadlocked since the first round of talks last September, as the U.S. demanded $5 billion (5 trillion won) in payment annually ― a fivefold increase from the amount paid last year. The source said the U.S. lowered the demand to $4 billion, but it was still far higher than Korea's request for a 10 percent rise from last year's amount.

However, sources said the U.S. stance has changed since U.S. President Donald Trump had a phone conversation with President Moon Jae-in, March 24, during which he asked for the export of Korean-made medical equipment in response to the COVID-19 pandemic. Now, three Korean firms are preparing shipments of their coronavirus diagnostic kits to the U.S. after winning interim approval from the U.S. Food and Drug Administration.

Jeong Eun-bo, Korea's chief negotiator for the SMA, said in a video message, Tuesday, Seoul and Washington had “considerably” narrowed their differences on the former's share, raising expectations of a deal being struck in the near future.

While the talks were not making any progress, the U.S. leveraged its Korean employees' unpaid leave to pressure the government to quickly reach an agreement.

In order to avoid the furloughs of thousands of workers, Korea proposed that the two countries conclude a deal on personnel expenditures first, but the U.S. refused, saying such a partial agreement could distract them from reaching a comprehensive deal.

As a result, approximately half of the USFK Korean employees went on unpaid leave starting Wednesday, according to the USFK.
 
“This is an unfortunate day for us ... its unthinkable ... it's heartbreaking. The partial furlough of Korean employees is not what we envisioned or hoped what would happen,” USFK Commander Gen. Robert Abrams said in a press statement.

“We will continue to emphasize the need for an agreed upon SMA to both the Korean and U.S. governments in order to end the partial furlough.”

In response to the unpaid leave, the defense ministry expressed regret and said the government will work to enact a special law allowing it to support the Korean employees with its own budget. Even before the law is established, the government will find other urgent measures such as emergency loans for them it said.

“The ministry will continue to work closely with the U.S. Department of Defense and USFK to prevent the current situation from affecting the joint posture,” defense ministry spokesman Choi Hyun-soo said in a briefing.