This week, the United States and South Korea reached a six-year cost-sharing deal that increases Seoul’s financial support of the extensive U.S. military presence on the Korean Peninsula, ending an almost two-year dispute between the allies. By reaching the agreement during its first months in office, the administration of U.S. President Joe Biden can now focus on strategic issues during its first high-level meetings with counterparts in Seoul later in March.
What is in the deal?
The resolution of Special Measures Agreement (SMA) negotiations ends an almost two-year stalemate in which the Donald J. Trump administration had sought to raise South Korea’s contributions nearly 500 percent by making it cover new categories of financial support, including transportation, training, and equipment for the U.S. Forces Korea (USFK).
Under the new SMA, Seoul will continue making financial contributions to sustain the U.S. military presence in South Korea in three categories: labor, logistics, and construction. The agreement encompasses guarantees for about nine thousand South Korean workers for the USFK, as well as material support for and upkeep of bases that house the twenty-eight thousand USFK troops on the peninsula.
South Korea will contribute 1.18 trillion won (around $1 billion) in the first year of the new SMA, a nearly 14 percent increase from the previous one-year agreement. The new deal reflects a 6.5 percent increase in base pay for South Korean workers in the first year, plus a 7.4 percent increase in South Korea’s defense budget. The two sides agreed that, in future years, the rate of increase in South Korea’s contribution will match the overall annual increase in its defense budget. This formula will likely bring South Korean contributions up to around $1.3 billion by 2025, an amount the Trump administration rejected in March 2020.
What does this mean for the U.S.-South Korea alliance?
The conclusion of the SMA fulfills a pledge the Biden campaign team made to strengthen the alliance instead of “extorting Seoul with reckless threats to remove [U.S.] troops.” The early fulfillment of the pledge enables Biden to shift focus away from alliance-management issues and instead focus on enhancing strategic coordination to address shared regional security challenges.
The deal means that alliance-management issues won’t hamper the first visits by U.S. Secretary of State Antony Blinken and Secretary of Defense Lloyd J. Austin III to South Korea and Japan later this month, when they plan to hold two-plus-two meetings aimed at revitalizing U.S. alliances in Asia.
What is on the agenda for the U.S. officials’ visit to South Korea and Japan?
The trip’s structure reinforces the Biden administration’s efforts to both strengthen bilateral relations and promote more effective trilateral coordination by the United States, Japan, and South Korea. The establishment of regular trilateral consultations with Japan and South Korea was a personal achievement for Blinken during his time in the Barack Obama administration that did not carry over into the Trump administration. Despite a steady deterioration of Japan-South Korea relations in recent years, the scheduling of back-to-back two-plus-two consultations with Japan and South Korea promotes U.S. expectations for renewed trilateral coordination on regional security.
What challenges remain for the U.S.-South Korea alliance?
Blinken and Austin will work to resolve differences on the question of whether China or North Korea is the alliance’s top priority. South Korean President Moon Jae-in’s priority has been facilitating U.S.-North Korea diplomacy, while Blinken’s first major foreign policy speech highlighted the strategic challenges posed by competition with China and the expectation that fellow democracies reinforce a line between the democratic and authoritarian leadership models.
The Biden administration will likely press South Korea to join the United States in opposing China’s authoritarian overreach. South Korea could take steps to align itself with collaborative initiatives, such as the Quad [PDF], and join efforts to enhance supply chain security among like-minded countries. At the same time, Seoul will urge Washington to seek accommodation rather than confrontation with Pyongyang.