260. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Ford, Washington, January 3, 1975.1 2

MEMORANDUM
THE WHITE HOUSE
WASHINGTON

January 3, 1975

MEMORANDUM FOR: THE PRESIDENT
FROM: HENRY A. KISSINGER [HK initialed]
SUBJECT: Future U.S. Military Assistance to South Korea

As part of the preparations for your recent visit to South Korea, the departments completed a policy study on future U.S. military assistance to the Republic of Korea (ROK). The specific issues they took up in this study included (1) whether the rate of shift from grant military assistance (MAP) to FMS credit should be accelerated, (2) whether a termination date should be set now, and (3) whether additional high-performance aircraft should be transferred to the Republic of Korea.

During your meeting with President Park, you discussed our military assistance in general terms. You reaffirmed U.S. support for the Five-Year ROK Force Modernization Plan, and said that we hoped to speed up completion of our assistance to that plan. You also assured Park that we had no intention to withdraw U.S. forces from South Korea.

We now need your guidance on the specific issues listed above. The inter-departmental paper presents the following options on these issues:

A. Rate of Shift from Grant MAP to FMS Credit. The Modernization Plan, to which we committed $1.5 billion in 1971 at the time we withdrew the first of our two divisions from Korea, was to have been finished in FY 75. By the end of FY 74, however, we were still $500 million short due to budget limitations. The ROK places considerable store by our rounding out, in some credible fashion, our contribution to the Modernization Plan. From the beginning, we have made clear that we would fulfill our obligation through a combination of grant MAP, FMS credit, and excess defense articles. In the last year or so, we have begun shifting to larger amounts of FMS credit, both because of tightening Congressional constraints on grant MAP and because the ROK has been [Page 2]able to pick up more of the burden. On the other hand, we do not want to shift too rapidly. We do not want to give the wrong signal to Pyongyang and its allies or to undercut confidence in Seoul.

Distaste in Congress for Park's handling of his domestic political situation did not in the end reduce our military assistance to South Korea by as much as earlier seemed likely. For FY 75, Congress has authorized a total of $145 million, plus another $20 million if you certify that Park is making substantial progress on human rights. Congress has left to your decision how this total is to be divided between grant MAP and FMS credits. This figure compares favorably with the FY 74 appropriation of $100 million grant MAP and $57 million FMS credit. For FY 76, we are requesting $75 million in grant MAP and $100 million in FMS credit.

FY 76 FY 77
Grant FMS Grant FMS
OPTION 1 147 65 96 90
OPTION 2 75 100 50 150
OPTION 3 50 125 25 175
OPTION 4 10 175 10 250

Departmental Views. State supports Option 2 while Defense wants Option 3. State stresses the political importance of an Executive Branch request for a higher level of grant MAP. Defense emphasizes Congressional constraints and the reputed ROK desire for increased FMS credits.

My View. The real choice is between Options 2 and 3. Option 1 and Option 4 would not likely be considered seriously by Congress. I support Option 2. I believe it important in light of the present political and strategic situation on the Korean Peninsula that the Executive Branch show continuing solid support for ROK needs. Moreover, I believe that [Page 3]this combination of grant MAP and FMS credits is a figure that would have a chance with Congress and reflects Korean ability to assume a growing share of the defense burden. Option 2 also reflects the level that Congress has authorized for FY 75 and that we are requesting for FY 76.

B. A Possible Termination Date for Grant MAP. The Presidential guidance of mid-1973 did not give a termination date for grant MAP. The inter-departmental paper presents two options:

Option 1: After FY 77, continue a low level of grant MAP for minor investment programs.

Option 2: After FY 77, terminate grant MAP except for a level of training assistance at about $1 million annually.

Departmental Views. Defense wants Option 1. State also supports Option 1, but with a difference: if Congress does not support enough grant MAP and FMS credit to complete our contribution to the Modernization Plan by FY 77, State would have us request both of these in subsequent years until the Plan were completed. State would terminate grant MAP, except for training (at about $2 million a year), after the Plan is finished. OMB would make no decision on terminating grant MAP until after Congress completes action an the FY 76 bill.

My View. I favor Option 1. At this point, we do not want to indicate a termination of grant MAP. In terms of military and budgetary planning, it is not necessary that we do so now, since either Option 2 or 3 on the rate of shift from grant MAP to FMS credits indicates the downward trend in grant MAP. Projecting beyond FY 77, if you choose Option 2 on the rate of shift from grant MAP to FMS credits, I recommend that we then think in terms of about $25 million in grant MAP for FY 78, and thereafter taper off to a level of not more than $10 million annually.

C. Additional High-Performance Aircraft for the ROK. At this point the only real question is whether to transfer to the ROK the one F-4D squadron which has been bailed to the ROK under the Enhance Plus Agreement since late 1972. Before we consider other ROK requests for additional high-performance aircraft, we want to look at a basic reassessment of the North Korean threat and of ROK air defense needs. Defense is now completing this study.

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As regards the F-4D bailed squadron, State and Defense agree that we should transfer this squadron to the ROK by sale. The ROK already owns one F–4 squadron outright. The transfer of this second F–4 squadron to ROK ownership at this time should not stimulate arms competition on the Korean Peninsula, since this second squadron has in reality been in the ROK Air Force inventory for two years already although it remained our property.

Defense wants to attach a condition to the sale of this F-4D squadron: that the ROK be asked to pay the $3.3 million cost for rehabilitating the two F-5A squadrons being returned to South Korea from South Vietnam under the Enhance Plus Agreement. Defense wants to use the $3.3 million for its sorely-pressed Vietnam budget. I think we can ask the ROK to pick up this $3.3 million (on top of the $43 million price tag we have put on the bailed squadron itself), but believe we should not press the ROK to pay this additional cost if it raises serious objections.

At Tab A is a draft NSDM which embodies my recommendations above.

RECOMMENDATION:

That you approve my signing in your name, the draft NSDM at Tab A.
Approve [GRF initialed]
Disapprove

  1. Source: Ford Library, NSC Institutional Files (H-Files), Box H–57, NSDM 282, Review of ROK Air Defense Requirements (10). Top Secret; Nodis. Ford initialed the approve option. The response to NSSM 211, an undated IG paper, is ibid., Box H–32, NSSM 211, Review of U.S. Security Assistance to the Republic of Korea (1).
  2. Kissinger recommended that Ford approve the issuance of a NSDM on future U.S. military assistance to South Korea.