DASD SEDNEY MEETINGS IN SEOUL: UNRESOLVED SMA AND

C O N F I D E N T I A L SEOUL 002369 SIPDIS SIPDIS COMM CENTER PLEASE PASS TO COMUSKOREA SCJS E.O. 12958: DECL: 08/07/2017 TAGS: MARR PARM PREL KS SUBJECT: DASD SEDNEY MEETINGS IN SEOUL: UNRESOLVED SMA AND YRP/LPP ISSUES REF: SEOUL 2368 Classified By: A/DCM Joseph Y. Yun, Reasons 1.4 (b,d). ¶1. (C) SUMMARY. The ongoing ROK hostage crisis in Afghanistan (reported reftel) and unresolved issues surrounding the relocation of U.S. Forces Korea (USFK) and the use of Special Measures Agreement (SMA) funds for relocation were key ROK agenda items in meetings with Deputy Assistant Secretary of Defense for East Asia David Sedney on August 2. Reiterating the Ministry of Foreign Affairs and Trade (MOFAT)'s position that in accordance with the National Assembly's supplementary opinion, SMA funds could not be used for the Land Partnership Program (LPP),DG Cho Byung-jae stressed that the issue posed a serious problem and called for a quick negotiation of a new SMA formula. Director of the Ministry of National Defense (MND)-USFK Relocation Office (MURO) BG Kwon Haeng Keum urged the U.S. to pay close attention to the issues related to the Yongsan Relocation Plan (YRP),that could negatively impact the otherwise smooth progress of the project. Kwon called for a quick U.S. response on the disputed landfill elevation level at Pyeongtaek and linked the issue directly to the Blue House's delay in setting a date for President Roh's attendance at a groundbreaking ceremony. DASD Sedney pressed both DG Cho and BG Kwon that it is imperative that the U.S. be able to use SMA funds for LPP. END SUMMARY. --- SMA --- ¶2. (C) DG Cho Byung-jae repeated MOFAT's view that the ROK National Assembly's supplementary opinion that future Special Measures Agreement (SMA) funds not be used by USFK to fund portions of the LPP constrained ROKG options. DASD Sedney repeated U.S. points from the previous week's Security Policy Initiative talks in Hawaii that it was important that the ROKG accurately inform the National Assembly regarding the necessity that the U.S. use SMA for LPP. DG Cho claimed that the ROKG had attempted to resolve the issue through its June 5 proposal to negotiate a new SMA formula, but complained that the ROK had received "no feedback" from the USG on that proposal. DASD Sedney pointed out that PM/SNA Ambassador Robert Loftis had met with Cho twice since June 5th on the issue and had clearly turned down the ROK proposal for being almost identical to a proposal offered by the ROK and rejected by the USG two years ago. DASD Sedney also stated that DUSD Richard Lawless made the same comments when Cho met with him at the end of June. DG Cho maintained that a new formula was needed because without it MOFAT would be unable to demonstrate to the National Assembly that it had complied with the supplementary opinion. ¶3. (C) Cho then expressed concern about earlier statements by then DUSD Richard Lawless indicating the USG would have no choice but to ask for "modification of the LPP agreement." OSD/APSA Mary Beth Morgan corrected that misunderstanding by pointing out that the U.S. wanted to see the LPP implemented as agreed and was not "walking away from the table." She pointed out, however, that without the use of SMA funds, it would be impossible for USFK to meet its commitments as specified under that agreement. DG Cho requested that incoming PM/SNA Ambassador Jackson MacDonald put a high priority on working with the ROK to resolve the issue. DASD Sedney promised to relay that message to the Ambassador. -------------- USFK RELOCATION -------------- ¶4. (C) MURO Director BG Kwon Haeng Keum said that after resolving some disagreements earlier in the year, he assessed that YRP and LPP were progressing very well. DASD Sedney agreed, saying that the ROKG's progress was impressive and that the U.S. side was pleased with the recent pace. Kwon raised two issues that he felt needed careful attention to keep the projects on track. First, the ROKG believed that the USG was placing a "huge burden" on the ROKG, adding that perhaps it was being done intentionally. Kwon cautioned against any significant deviations from projected costs. Kwon explained that the ROKG had promised to not use any taxpayers' funds to complete YRP, using only the proceeds from sales of returned lands. He said that according to the YRP Master Plan, he believes that those land sales funds would be sufficient, with perhaps slight deviations, but that significant deviations would be very difficult to manage. ¶5. (C) Kwon's second, and most serious point, was the difference of views on the proper landfill elevation (and the subsequent volume of landfill needed) in Pyeongtaek. Kwon noted that USFK was currently considering this issue and urged DASD Sedney to pass along the ROK desire for a quick U.S. response. Kwon noted that MND, the National Assembly, and the Blue House viewed the landfill elevation issue very seriously and linked the delay in receiving a response from USFK directly with the Blue House's delay in setting a date for President Roh's attendance at the groundbreaking ceremony at Camp Humphreys. While Kwon initially claimed that the ROK contractor could not complete planning for a higher landfill elevation level in less than three months thereby making it impossible to have the groundbreaking ceremony before a Roh-Bush Presidential Summit, he later said that with a U.S. response on the elevation issue, he believed the Blue House would agree to a September date for the groundbreaking ceremony. (NOTE: Other ROKG contacts have told the Embassy that the uncertainty surrounding the dates of the Presidents Roh-Bush Summit was the reason the Blue House was not confirming various dates, including the groundbreaking ceremony. END NOTE.) ¶6. (U) DASD Sedney has cleared this message. STANTON