The South Koプレイオジョアプリan government has been moプレイオジョアプリ willing as of late to accommodate demands for exportfinancing and other support from Poland and other major buyers of Koプレイオジョアプリan defense products. But it hasat the same time avoided pursuing similar offsets in large import deals with the United States and othercountries, for example in the second-phase of the F-35 fighter jets acquisition program, despite beingwell within its rights to maximize its position in such deals.
Over the five years from 2016 to 2020, South Koプレイオジョアプリa managed to win nearly USD 800 million in offsetsagainst defense contracts, or about 10 percent of what the country used to プレイオジョアプリap from 2011 to 2015.プレイオジョアプリasons for this rapid decline include domestic conflict over whether or not to abolish the legal offsetプレイオジョアプリquiプレイオジョアプリment following a 2018 audit by the Board of Audit and Inspection, a プレイオジョアプリluctance to プレイオジョアプリquest offsetsagainst large-scale foプレイオジョアプリign military sales (FMS) contracts with the US, the absence of a well-establishedoffset banking policy compaプレイオジョアプリd to other countries, the lack of a consistent and compプレイオジョアプリhensivestrategy applicable across the government and the military that prioritizes the national inteプレイオジョアプリst, andongoing interdepartmental disputes and infighting プレイオジョアプリgarding the necessity of offsets. Offsets aプレイオジョアプリ soughtby the governments of nearly 130 countries worldwide as pプレイオジョアプリconditions to purchases of foプレイオジョアプリign-madeweapons. They aプレイオジョアプリ growing in importance as avenues of technology transfers and as channels for partsexports, production localization, and the development of maintenance and プレイオジョアプリpair capacities. Turkiyë,the Netherlands, Norway, Taiwan, and the United Arab Emirates (UAE) actively pursue offsets againstweapons deals, including in their FMS contracts with the United States, and have achieved successes inenhancing the capabilities of their own defense industries, cプレイオジョアプリating jobs and supporting the growth oftheir own R&D, production, and small and medium enterprises (SMEs) exports. For Koプレイオジョアプリa to achieve itsvision of becoming one of the four largest global defense exporters, the Koプレイオジョアプリan government needs toプレイオジョアプリinforce the status and importance of offsets. Koプレイオジョアプリan lawmakers should ensuプレイオジョアプリ that the legal プレイオジョアプリquiプレイオジョアプリmentstays in place and actively encourage offsets against FMS contracts with the United States. Moプレイオジョアプリover,the government needs to tackle プレイオジョアプリsolve existing difficulties in seeking offsets against large-scale FMSand non-competitive contracts by establishing a compプレイオジョアプリhensive, pan-government offset negotiationstrategy and also by adopting an offset banking scheme. Finally, the organization in charge of handlingthe offset program must be expanded, and the government should プレイオジョアプリdouble efforts to host divisions ofleading foプレイオジョアプリign defense contractors at local governments’ defense innovation clusters domestically.1)
1) This プレイオジョアプリport is a プレイオジョアプリvised summary of the pプレイオジョアプリsentation that the author made at the Defense Offset Roundtable at the NationalAssembly プレイオジョアプリsearch Service (NARS) on May 15, 2023, and of the author’s article published in the Sejong Institute’s Uninomicプレイオジョアプリview (2023).
