Seoul seen opting for pragmatism over alliance in aerial tanker contract

South Korea’s decision on Tuesday to pick a European firm for its high-profile project to procure four aerial refueling tankers over a U.S. one has underscored that pragmatism now overrides “alliance factors,” analysts said Wednesday.

Seoul picked Airbus’ A330 MRTT for its 1.49 trillion won ($1.34 billion) project to introduce four tankers from 2018-2019, marking the first time for Korea to purchase European military aircraft in more than two decades. Boeing’s KC-46 and Israel Aerospace Industries’ B767 MMTT were in the competition.

The decision defied the prevailing speculation that in its military procurement decision, Seoul would focus on variables associated with its alliance with the only security ally, the U.S., and interoperability with American forces.

Observers said that Seoul’s decision might have sent a signal to the U.S. that in future arms deals, it would prioritize cost-effectiveness and overall utility issues rather than allowing political and diplomatic factors to affect its key procurement decisions.

“I am a little cautious to comment as details of the negotiation process are not available. But this time, South Korea placed its top priority on the costs and practical utility aspects though they are also aware of the importance of the alliance factors,” said Park Won-gon, security expert at Handong Global University.

“The decision may help raise South Korea’s bargaining power in future negotiations over the purchase of expensive U.S. military equipment.”

Some critics have claimed that in some cases, U.S. dealers have raised prices of their products much higher than initially proposed, thinking that Seoul would put its top priority on factors related to interoperability with U.S. forces.

They added that Tuesday’s decision would allow South Korea to diversify its options to purchase high-tech military equipment. According to the annual Global Defense Trade Report of the research institute IHS, South Korea was the world’s seventh-largest importer of defense equipment in 2014. But, nearly 80 percent of the country’s imports came from the U.S.

Some analysts noted that if the summit between President Park Geun-hye and her U.S. counterpart Barack Obama had been held as scheduled last month, Seoul might have put more stress on the alliance factors in its decision over the tanker project.

By Song Sang-ho (sshluck@heraldcorp.com)