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Who pays for Thaad?

Apr 29,2017
A strong backlash has erupted in South Korea after U.S. President Donald Trump reportedly said he wants Seoul to pay $1 billion for the Terminal High Altitude Area Defense (Thaad) antimissile system now deployed in Seongju, North Gyeongsang. Trump is said to have made the remarks in an interview with Reuters ahead of the 100th day anniversary of his inauguration.

The Thaad battery is primarily aimed at safeguarding U.S. forces in South Korea from North Korea’s ballistic missile attacks. It can also protect South Koreans in other parts of the country, of course, thanks to its broad coverage.

First of all, it is hard for us to take Trump’s remarks literally. Reuters said, “He also said he wanted South Korea to pay the cost of the U.S. Thaad anti-missile defense system, which he estimated at $1 billion.” But it is not clear if he meant South Korea should bear all the costs of the equipment and maintenance or only a part of them. Nevertheless, a number of media outlets reported it as if South Korea must pay the entire $1 billion. Trump’s fuzzy words are partly accountable for the hoopla over his remarks and such vagueness can damage the Koresa-U.S. alliance.

However, Uncle Sam can’t demand Seoul bear the cost of the battery. As the missile defense system is a U.S. forces’ asset, Washington is responsible for its cost. Last year, both governments agreed that the U.S. would bear the cost of the deployment and operation in return for South Korea’s offer of a site for free.

It is also difficult to sharply increase our share of defense costs. The amount of our agreed share is 920 billion won ($809 million) annually from 2014 to 2018. As the share increases annually, South Korea paid 944.1 billion won last year. The money covers all additional costs for the construction, manpower and transportation in the operation and maintenance of the Thaad system.
Our political parties differ on the Thaad issue.

We had a similar experience in the 1994 Agreed Framework in Geneva between the U.S. and North Korea. Despite an agreement among Seoul, Washington and Tokyo, we had to pay up to 70 percent of the cost of the construction of light-water reactors in exchange for Pyongyang’s scrapping of its nuclear weapons program. At the time, the U.S only paid for heavy oil supplies. Instead of bickering over such a sensitive issue, both sides must summon the wisdom to resolve the matter successfully.

JoongAng Ilbo, April 29, Page 26