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Chung Eun-bo

South Korea has appointed Chung Eun-bo, former vice chairman of the Financial Services Commission (FSC), and a veteran of the Ministry of Economy and Finance, to lead its defense cost-sharing negotiations with the US. The two sides are deliberating their 11th Special Measures Agreement (SMA), which determines how much South Korea will contribute to the cost of stationing US troops from next year onward.

Considering that the negotiations have previously been led by figures from the Ministry of National Defense and the Ministry of Foreign Affairs, the appointment of Chung, a consummate economic bureaucrat, is highly unconventional.

The Ministry of Foreign Affairs (MOFA) said on Sept. 26 that Chung had held a range of positions, including financial policy department head, secretary-general, and vice chairman at the Financial Services Commission and assistant deputy minister at the Ministry of Economy and Finance. “He’s a professional economic bureaucrat who is adept at policy coordination, and he’s one of the country’s top experts in economics, finance, and budget,” the ministry said.

MOFA explained that it hopes Chung will be able to respond to the US’ demand for South Korea to greatly increase its defense contribution by meticulously assessing the appropriateness of the amount and categories of funding requested by the US. “We expect that Chung, along with a team of negotiators representing related agencies, including the Ministry of Foreign Affairs, the Ministry of National Defense, the Ministry of Economy and Finance, and the Defense Acquisition Program Administration, will conduct negotiations aimed at arranging a fair and reasonable way to share the cost of defense,” the Ministry said.

The first round of negotiations for the 11th Special Measures Agreement concluded on Sept. 25, the day before Chung’s appointment as lead negotiator. During a meeting at the Korea Institute for Defense Analyses in Seoul on Sept. 24-25, the two teams shared their basic positions about defense cost-sharing. The US is widely believed to be asking South Korea to greatly increase its share of the defense burden, asserting that the direct and indirect costs of operating US Forces Korea (USFK) come to about US$5 billion a year.

The South Koreans are apparently arguing that the American demands go beyond the framework of the current SMA in the three categories of personnel cost, military construction cost, and logistical support cost and that Korea can only shoulder costs within the current framework. The Korean negotiators are also believed to have provided a detailed explanation of how Seoul has helped support its alliance with the US and the American troop presence here, such as by making large purchases of American-made weaponry.

MOFA’s reference to a “new dynamic negotiating environment” in a statement issued after the meeting has led some to guess that the US has asked South Korea to cover logistical support costs and even the personnel costs of USFK servicemembers — which are not categories under the current cost-sharing arrangement — based on the US’ new standards for allied cost-sharing. Given the big gap between the two countries’ positions, a MOFA official said on Sept. 26 that “the negotiations aren’t likely to be easy.” The two negotiating teams have agreed to hold their next round of talks in the US next month.

By Noh Ji-won, staff reporter

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