The Peninsula

Seoul Looks for a Tune that Resonates with Trump on Burden-Sharing

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• In a tweet, Donald Trump announced that South Korea had “agreed to pay substantially more money to the United States in order to defend itself from North Korea.”
• South Korean Ministry of Foreign Affairs underscored that it was “inappropriate” to comment on a foreign leader’s Twitter post, but emphasized that negotiations for the defense cost-sharing have not yet started.
• During his visit to Seoul in July, National Security Advisor John Bolton asked for $5 billion in annual payments from South Korea for hosting U.S. troops – this would mean South Korea paying over $4 billion more than what it is contributing today.

Implications: The South Korean government believes that it can coax the U.S. government into accepting a lower amount than what John Bolton demanded by offering concessions in other areas. ROK officials are reportedly discussing the deployment of naval units to the Strait of Hormuz to demonstrate South Korea’s role in advancing Washington’s geopolitical interests outside the Asia-Pacific region. In addition, Seoul may increase its acquisition of U.S. military hardware to convey the country’s contributions to the American arms industry. With an eye on messaging the importance of the bilateral security relationship more aggressively among U.S. policymakers, the Blue House will also dispatch a new ambassador to the United States.

These actions stem from South Korea’s belief that Washington is making an aggressive opening bid in a discussion that is negotiable. Some Korean newspapers have rationalized the controversial tweet as a tactic described in the 1987 business advice book “The Art of the Deal,” which is credited to Trump. This view may have been further bolstered by the fact that Bolton’s $5 billion demand does not comply with the U.S. administration’s own proposal for allies to pay “Cost Plus 50.” However, KEI Fellow Kyle Ferrier believes that the White House may be more recalcitrant in its position, as evidenced by Bolton’s similar demand to Tokyo that Japan increase its burden-sharing contributions fivefold.

Context: South Korea’s tactical maneuvers are animated by its recent negotiations with the U.S. government. When Donald Trump raised issue with the Korea-U.S. Free Trade Agreement, South Korean negotiators were able to steer the U.S. government away from significant revisions by making small concessions in the steel and auto sectors. Similarly, in last year’s negotiations with Washington on burden-sharing, Seoul avoided the initial U.S. demand for a 100-200% increase in monetary contributions through arms acquisition and other measures. It is unclear whether this strategy will continue to have mileage in upcoming burden-sharing discussions.

Korea View was edited by Yong Kwon with the help of Yusong Cha, Stephen Eun, Taehwa Hong, and Hyoshin Kim.

Picture courtesy of the White House