Author: Soon Ho Lee, University of Hull
With the scheduled transfer of wartime operational command of the allied South Korean forces from the US to South Korea in December 2015 fast approaching, South Korea is seeking to improve its intelligence gathering capabilities vis-à-vis North Korea.
In particular, South Korea was negotiating with the US to purchase Global Hawks (high-altitude reconnaissance drones). The need for South Korea to improve its reconnaissance capabilities has been exposed by North Korea, most notably through the bombardment of Yeonpyeong Island in November 2010 and the launch of the Kwangmyŏngsŏng-3 satellite in December 2012. But whether the US will provide these new capabilities remains in question — highlighting the broader problem of defence procurement relations between the US and South Korea.
The United States Department of Defense (DOD) notified the US Congress in December last year of its plan to sell four Global Hawks to South Korea. However, South Korea has not been altogether happy with the terms of the agreement and the ROK DAPA (Defense Acquisition Program Administration) announced that South Korea will pursue an open-bid contest instead of taking up the DOD’s Global Hawk offer through the US Foreign Military Sales (FMS) program due to cost concerns. The possibility of South Korean indigenous production of mid-altitude Unmanned Aerial Vehicles (UAV) has also been keenly discussed.
As well as the obvious cost concerns, South Korea is also concerned about the technology transfer and maintenance package they would receive under the current proposal through FMS. Under FMS, the US government procures defence articles and services on behalf of the foreign customer. However, because the US government acts as the broker, the ROK government was unable to negotiate directly with US defence industry manufacturers regarding the price and technology transfer package for the Global Hawks. Compared with direct commercial sales, this put South Korean negotiators at an obvious disadvantage in the negotiation of price and contract conditions. The US, however, is against active technology transfers as it would allow South Korea to opportunity to develop new weaponry which is could then sell to other countries. This is undesirable as the US would enable a new competitor in the international defence procurement market and lose potential sales. It would also risk technology being leaked to countries under embargo.
The US and South Korea have clashed before on the issues of military technology transfer and the leaking of military technology. Last year the US accused the ROK Air Force of illegitimately dismantling the Tiger Eye sensor it had sold them as part of their F-15K fighter jets. South Korea insisted that it was opened only for maintenance, but US inspectors from the CIA and related industry experts suggested that South Korea tried to reverse engineer the Tiger Eye sensor to improve its KF-16 fighter jets’ combined navigation and targeting pod system LATIRN (Low Altitude Navigation and Targeting Infrared for Night). Eventually South Korea may intend to install to the reverse engineered technology in its newly developing indigenous low-to-mid range air fighters. This is apparently not an isolated incident; it has also reported that the US government suspects 16 other newly developed ROK indigenous weaponries were reverse engineered from US military technology. These accusations by the US have highlighted to the ROK public and defence community the disadvantages of the US’s FMS system: paying top money for a poor technology transfer package and paltry maintenance support.
In light of this situation, in January this year South Korea selected Anglo-Italian firm AgustaWestland’s AW-159 Wildcat military helicopter for its new SH-X maritime operation helicopter acquisition project due to its better technology transfer and maintenance packages as well as its more reasonable price. This was despite the fact that the Sikorsky SH-60 Seahawk helicopter had previously been selected for the project as suggested through FMS and it had scored better performance marks during the DAPA’s evaluation process.
Considering its information warfare vulnerabilities and the looming transfer of wartime operational command, South Korea should give serious consideration to purchasing the Global Hawks. The open bidding contests and indigenous production of mid-altitude UAVs could be viewed as a negotiation tactic by the ROK government to get a better procurement contract for the Global Hawks. However, the outcome of the SH-X helicopter project indicates that South Korea is willing to consider other reasonable options if it cannot receive desirable contract conditions from the United States.
Haggling over the procurement of Global Hawks between the US and South Korea reveals the inherent problems of the US’s FMS system. The strict FMS conditions — where the purchaser cannot contact the relevant industry representatives directly to negotiate the price, technology transfer and maintenance packages — has driven South Korea to explore other options. As a result, US dominance in the lucrative international defence procurement market is being challenged.
Given its superior weapons technology and angst over technology transfer issues, it is likely that the United States will maintain the FMS system for the sale of strategic goods. Competitors including Russia, China, Europe and Israel are lining up to tempt US allies away from the FMS. AgustaWestland’s success in selling the AW-159 Wildcat helicopter to South Korea, coupled with South Korea’s reluctance to accept the contract conditions for the Global Hawks through the FMS system, has offered encouragement to US competitors that they can compete with the United States for procurement contracts to traditional US allies such as Japan, South Korea, Australia, Singapore and Saudi Arabia.
Finally, it should be mentioned that despite tensions over conditions offered through the FMS system, the US-ROK alliance remains as resilient as ever. The US-ROK joint responses after the bombardment of Yeonpyeong Island and in the wake of the third North Korean nuclear test have demonstrated that disagreements over FMS will not be allowed to affect the resolve of the alliance.
Soon Ho Lee is a PhD candidate at the Department of Politics and International Studies, The University of Hull.