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U.S. Defense Secretary on Mission to Save Asian Military Alliances

Price Tag for U.S. Troops in South Korea Looms Over High-Stakes Trip

(Bloomberg) -- Defense Secretary Mark Esper arrives in South Korea Thursday to a host of strains on one of America’s most important military alliances, including a demand from President Donald Trump to pay about five times more to host U.S. troops.

Esper’s high-stakes mission -- the start of an eight-day trip through Asia -- begins with his arrival in Seoul. Its results could determine how well the Trump administration can keep allies Japan and South Korea together as they face threats from the likes of North Korea, and whether other countries hosting U.S. troops will face Trump’s pressure to pay far more to keep doing so.

The Pentagon boss is also facing a Nov. 23 deadline for South Korea letting expire an intelligence pact with Japan reached three years ago that was seen as a breakthrough in getting the frequent adversaries to cooperate independently of the U.S. Meanwhile, North Korea has given Trump until the end of the year to sweeten his offer for Pyongyang’s nuclear disarmament or risk it ratcheting up security risks to new levels.

South Korean President Moon Jae-in’s government has tried to play down any differences with Trump, who holds the cards on Moon’s key policy of seeking rapprochement with North Korea. Seoul has also reiterated its plans to terminate the intelligence-sharing pact, a move the U.S. says could hurt it, South Korea and Japan.

“If Moon says ‘no’ to to the issues of cost sharing and the intelligence pact and a compromise is not reached, then not only would the alliance plummet, but the Korean Peninsula could be hit with grave security consequences,” said Duyeon Kim, a senior adviser for Northeast Asia and nuclear policy at the International Crisis Group.

U.S. officials say the dispute between Japan and South Korea plays into the hands of China and North Korea by dividing key allies.

Esper made that point en route to Asia, telling reporters on his plane Wednesday that he will urge Japan and South Korea to “get beyond these issues” and “focus on how we partner as allies to deter North Korean bad behavior and, then in the long term, deal with the Chinese. The only folks who are benefiting from this dispute right now are North Korea and China.”

A timeline for U.S.-South Korea troop funding talks
  • Dec. 2018 - U.S. wants South Korea to double its payment and cut term of funding deal from five years to two, Chosun newspaper reports
  • February - U.S. and South Korea reach one-year deal that calls for Seoul to contribute about $1 billion to host some 28,500 U.S. service members
  • March - Administration officials tell Bloomberg News that Trump wants countries to pay all costs and a 50% premium on top of that for the privilege of hosting
  • October - U.S. seeks nearly $5 billion from South Korea for troops, reports in South Korean media said

But as a national election approaches for parliament in April, Moon risks alienating his progressive base if he is seen as giving away too much to Trump -- especially after South Korea in October said it would abandon its developing-nation privileges at the World Trade Organization following charges by the Trump administration that it was taking advantage of the status.

“We don’t think the termination would weaken the alliance with the U.S.,” a presidential Blue House official who asked not to be identified told reporters last week. Moon’s government has placed responsibility for its move on Japan, saying it won’t bend unless Prime Minister Shinzo Abe’s government rolls back export restrictions it put in place a few months ago as relations between the neighbors plummeted.

As Esper was heading to Asia, North Korea blamed U.S. and South Korean joint military drills “as a main factor of screwing up tensions.” It also reminded the Trump administration that leader Kim Jong Un has given it a year-end deadline to ease up on sanctions or “face a greater threat” from Pyongyang, its official KCNA news agency reported, citing an unnamed State Affairs Commission spokesman.

When it comes to troop funding, Japan may find itself inescapably linked to what happens in South Korea.

Esper lands in Seoul with Trump demanding South Korea pay about $5 billion for the privilege of hosting U.S. troops, about five times more than current levels. The price tag originated with the White House, according to people familiar with the matter, and administration officials justify it by saying it reflects the costs South Korea would incur if it takes operational control of combined U.S.-South Korean forces in the case of a conflict.

Esper -- who will continue on to Thailand, Vietnam and the Philippines -- wouldn’t discuss a specific dollar figure with reporters on his plane to Asia, but suggested South Korean contributions should increase sharply.

“We have asked for a significant increase in the cost sharing for our deployed troops,” Esper said.

Japan and the U.S. reached a five-year deal in 2016 where Tokyo bears costs for local staff, utilities and training relocation. Japan is set to pay 197 billion yen ($1.8 billion) this year, although the U.S. does not publish costs of maintaining the bases. Some experts say it’s probably cheaper for the U.S. to keep its troops in Japan than to bring them home.

--With assistance from Nick Wadhams.

To contact the reporters on this story: Kanga Kong in Seoul at kkong50@bloomberg.net;Glen Carey in Tacoma, Washington at gcarey8@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Jon Herskovitz, Bill Faries

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