S. Korea, US agree on defense const sharing-plan US presidential election

South Korea and the U.S. have agreed on the 12th Special Measures Agreement (SMA), which will cover the five years from next year to 2030. Under the agreement, South Korea will pay 1.52 trillion won next year as its share of defense costs for the U.S. military presence in the country, up 8.3 percent from this year. The South Korean government announced the agreement on Friday, 33 days before the U.S. presidential election in November. It has been half a year since the two countries began early negotiations in April, and it is believed that both Seoul and Washington have sped up the process of finalizing the agreement as U.S. Republican presidential candidate and former President Donald Trump is likely to ignore the discussions held with the Joe Biden administration if he is reelected. However, the ‘Trump risk’ has not entirely disappeared as there is a small possibility that Trump will demand renegotiation if he wins the election.

According to the 12th SMA agreement released by the Ministry of Foreign Affairs on Friday, South Korea and the U.S. agreed to index the annual increase in defense cost to the inflation rate. Previously, in the negotiations for the 11th SMA in 2021, the two agreed to link the increase in defense cost to the increase in national defense spending. Still, this time, they decided to adjust it to the inflation rate again. According to the data distributed by the government on Friday, the defense cost growth rate is expected to be between 14.9 and 19.5 percent over five years when the inflation rate is applied, which is up to 15 percentage points less than when the defense cost growth rate is linked to the inflation rate (26.7 to 31.6 percent). The two countries have also reintroduced a cap on the growth rate, which requires that the annual defense spending growth rate not exceed five percent.

The conclusion of the SMA deal before the U.S. presidential election was seen by some in the South Korean government as laying the groundwork for a stable path on the sensitive issue of defense spending regardless of the political situation in the U.S. “There is no precedent for renegotiating defense expenditures after an agreement has already been made,” said a government source. “Even if Trump comes to power, the agreement itself will not be easily shaken.”


Jin-Woo Shin niceshin@donga.com