SEOUL — The U.S. and South Korean governments Tuesday finalized a budget agreement for maintaining American troops here that falls short of what U.S. officials say is needed to cover their current costs.

A U.S. Embassy official confirmed that both governments have initialed a two-year cost-sharing agreement that requires the South Koreans to pay 680.4 billion won (about $680 million) annually.

Yonhap News Agency reported the amount is an 8.9 percent drop from last year’s 746.9 billion won. In dollars, the South Korean contribution is about $680 million this year, up from about $621 million. But those numbers are deceptive because of the dollar’s drop in value against the South Korean won and the fact that South Korea pays the United States in won, Yonhap reported.

U.S. Forces Korea commander Gen. Leon J. LaPorte testified to Congress in March that last year’s South Korean government support — instituted in 1991 under the Special Measures Agreement — equaled 40 percent of the command’s non-personnel costs.

USFK has said the shortfall could mean cutting up to 1,000 jobs among South Korean workers at U.S. bases. During a news conference in early April, USFK chief of staff Lt. Gen. Charles C. Campbell said, “We will be required to make tough but necessary decisions in the areas of force capabilities; pre-positioned equipment and stocks; personnel and services; construction; and command-and-control equipment currently provided to ROK military forces.”

In response to the possible layoffs, the union representing almost 13,000 Korean workers has begun formal proceedings to strike within about 45 days, a move that one local labor expert says could spark an emotionally charged labor dispute.

A strike “has a lot of potential for damage and helplessness,” said Brendon Carr, an American-trained lawyer in Seoul who represents foreign companies that deal with union issues. “I could see it turning pretty crazy pretty quick.”

In South Korea, companies are forbidden by law to lay off workers as a means to save money, Carr said. Layoffs happen only if the entire company is closing or declaring bankruptcy, he said. Thus, from a Korean’s perspective, he added, USFK’s layoffs are a rarity that target individual workers’ pride and competency.

A strike or protest could draw thousands of angry and even violent protesters, Carr said. He said when his own clients, which do not include USFK or the South Korean union, face similar business decisions about layoffs, he sometimes advises them to offer thousands of dollars of severance pay to avoid the disruption and demonstrations.

Korean Ministry of Labor officials also confirmed Tuesday that the Korean workers at U.S. military bases have the right to strike. But the union still must file a report with South Korea’s National Labor Relations Commission, which determines whether the strike will be considered legal, according to Park Moon-hong, who works in the commission’s labor mediation division.

The commission then will spend 45 days working with the union and USFK to negotiate a settlement to avoid a strike, Park said.

It also appears that many of the Korean workers whose jobs on U.S. military bases include emergency services would be allowed to strike, according to the Korean Labor Ministry.

South Korean civil service workers, who include firefighters, 911 operators and some hospital workers, are not allowed to strike. But some of the Koreans who perform these or similar duties on U.S. bases are not in the South Korean civil service; therefore, they may be allowed to join any walkout, according to Jung Won-hee, who works in the International Cooperation Division at the Labor Ministry.

On Tuesday, USFK officials referred most inquiries about the cost-sharing agreement to the State Department. USFK also declined to list, in general terms, those on-base jobs currently held by Korean workers.

As of March 31, about 14,500 Korean employees worked for U.S. Forces Korea, according to USFK public affairs officer David Oten. Of those, roughly 10,000 are appropriated-funds employees, meaning the U.S. government pays their salaries. The remaining are nonappropriated-funds employees who work for organizations that generate their own revenue, such as the Army and Air Force Exchange Service and a handful of contractors.

Only appropriated-funds positions would be affected by any layoffs, Oten said.

Just outside the Far East District base in Seoul, a handful of Korean workers stopped Tuesday to talk about the possible strike. One woman, who has worked at the base for about three years, said she thought the union should continue to negotiate and save jobs rather than threaten large protests and strikes.

Another woman, who has worked with USFK for 25 years, said she understood the union members’ plight.

“It’s the only way they can protect themselves,” she said, declining to give her name.

Park Un-young, a Korean who works for the U.S. Army Engineering Corps, agreed.

“It would be far better for them to make a deal before the Korean Union goes on a strike,” she told a translator on Tuesday. “But once the union decides to walk out, I will definitely follow their decision to participate.”

T.D. Flack contributed to this report.

A look back at past strikes

The last time the Korean Employees Union struck U.S. Forces Korea was in 1986, according to union President Kang In-shik.

The one-day walkout involved USFK’s plans then to lay off 760 Korean workers as some U.S. troops withdrew from South Korea.

Both sides agreed then to downsize through attrition rather than layoffs, Kang said this week.

The union president made a similar request of USFK this time but that was rejected, according to Kang. USFK officials declined to discuss either the request or this week’s discussion between Kang and USFK leaders.

In 1988, some 3,000 Korean workers walked off the job at four Air Force bases in South Korea to protest 105 layoffs among Korean staff.

In more recent years, the Korean union has threatened to strike but has held off from actual picket lines, Kang said.

— Stars and Stripes

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