The battle between South Korea and the United States for defense costs, where is the way out?

As the third round of negotiations on the 11th Special Agreement on the Sharing of Defense Fees held by Korea and the United States was too different, the meeting ended without results. Although the Korean and American officials have for the first time denied that the US military will withdraw some troops from South Korea, the South Korean-American military alliance will not be affected, but people still have to ask, how will the conflict between South Korea and the United States will be resolved?

At present, the differences between the two sides mainly exist. The total amount of defense funds allocated by the United States to South Korea is rated at US$5 billion, which is five times the amount of Korea’s 2019 burden. So, how much “protection fee” should South Korea give to the United States? In general, there are three main methods for pricing products. The first is cost-oriented, that is, according to the cost of the product plus a certain profit; the second is demand-oriented, that is, not based on the cost of the product, but based on the consumer’s demand for the product and the value of the product. Pricing; the third is competition-oriented, that is, competition-centered, based on the pricing of competitors.

Obviously, because there is no third party competing with the United States, the difference between South Korea and the United States is that the former believes that it should be priced according to cost, and the latter should be priced according to demand. This is the root cause of the excessive difference between the two parties. The US believes that a new framework for the defense fee sharing system should be developed. This new framework is a demand-based pricing approach. The logic of the US is that South Korea is very rich and needs the protection of the United States, and this protection is quite scarce. The same thing, sold to rich people, should have a better price. Moreover, security is priceless because economic development is based on national security.

However, from the perspective of Qingwatai, there are two difficulties: First, from $1 billion to $5 billion, the price disparity makes the text feel that the government has “cutting the flesh” and cannot break the precedent. Second, the Korean people generally The US “Lion’s mouth is open” is opposed. According to opinion polls, 96% of Koreans are opposed to sharing the $5 billion garrison fee. The government is unlikely to reverse the public opinion when the support rate declines.

In fact, with the changes in the situation on the peninsula and the improvement of South Korea’s national defense capabilities, the reduction of the US military in South Korea is a major trend in the past few decades. Before the outbreak of the Korean War, after the Soviet Union withdrew its troops from North Korea, the US troops stationed in South Korea in June 1949 withdrew from the Korean peninsula, leaving only a military advisory group of about 500 people. After the signing of the Korean War Armistice Agreement, the number of US troops stationed in South Korea dropped from more than 50,000 to about 28,500 at the end of 2018. South Korea’s existing military strength is 599,000. In 2019, the national defense budget was about 40 billion US dollars, an increase of 8.2% over the previous year.

At present, most Koreans still regard the South Korea-US alliance as the security pillar of South Korea. The conservatives in South Korea are worried that the US troops stationed in South Korea will shrink or even withdraw their troops. However, many Koreans hope to get the respect they deserve in the alliance. With the decline in the possibility of war, there has been a marked change in the attitude of South Korea to the US military in South Korea. The US military bases scattered throughout South Korea are unacceptable to Koreans with high nationalist sentiment: a newly industrialized country with an economic scale of 12th in the world and a per capita GDP of more than 30,000 US dollars, even with wartime operational command In the hands of others, can you bear it? What’s more, the way American leaders do things at the moment ignores the “self-esteem” of their allies.

In the absence of a sudden change in the situation on the peninsula, no matter from the domestic political perspective or from the national sentiment of South Korea, South Korea cannot afford to spend $5 billion to meet the US asking price. In the future, South Korea will delay the change and look at the situation in other countries. What will the US do? For example, the defense expenses shared by South Korea have risen, but in the end it still does not reach the asking price. The United States is likely to reduce the size of the garrison and express its dissatisfaction. Each step back and continue to maintain asymmetrical alliances.