WASHINGTON – Japan and the United States struck a deal Sunday on sharing the cost of relocating 8,000 U.S. Marines from Okinawa to Guam, with Tokyo paying 59 percent, or $6.09 billion, of the estimated $10.27 billion tab through grants, investments and loans.
Defense Agency Director General Fukushiro Nukaga and Defense Secretary Donald Rumsfeld announced the agreement after talks at the Pentagon that will allow the two countries to wrap up a package realigning the U.S. military presence in Japan.
Tokyo and Washington had been at odds over how much Japan would chip in for the move, with the U.S. side asking Japan to pay 75 percent, or $7.5 billion, and the Japanese side offering $3 billion in grants and $3 billion in loans.
Nukaga told reporters he and Rumsfeld reached the deal after both sides compromised, with the U.S. side lowering the 75 percent demand and the Japanese side raising its offer.
Japan’s contribution fell to 59 percent partly because the total cost of the transfer exceeded the earlier estimated $10 billion. Japan’s total payments will end up at more than $6 billion.
The Japanese share includes $2.8 billion in grants and $1.5 billion in investments — both of which require a budgetary allocation — and $1.79 billion in loans. Japan will be reimbursed for both the investment costs and the loans.
The two defense chiefs held the meeting after failing in several rounds of senior working-level talks to nail down the shares each would pay for the realignment, an accord on which was reached last October.
The two nations missed their self-imposed March 31 deadline to complete the implementation plan, due mainly to the cost-sharing issue and problems getting local approval for the relocation of U.S. Marine Corps Futenma Air Station within Okinawa. Both issues have now basically been resolved.
U.S. officials had repeatedly said the Futenma issue must be resolved before proceeding with the marines’ relocation to Guam, indicating they would not begin substantive negotiations on cost-sharing until Tokyo won local support for the Futenma plan.
Now that they have cleared the two crucial issues, the two nations hope to make final arrangements at another round of senior working-level talks Monday and Tuesday in Washington to set the stage for the “two-plus-two” top security meeting of defense and foreign affairs ministers early next month to finalize the overall implementation plan.
“I believe the agreement has set the stage for the two-plus-two meeting and then the bilateral summit” between Prime Minister Junichiro Koizumi and U.S. President George W. Bush, Nukaga said without giving specifics on when those meetings will be held.
The Koizumi-Bush meeting is expected to take place in late June in Washington.
Nukaga and Rumsfeld said they worked out the agreement based on the need to maintain a strong bilateral security alliance and to ease the burden on communities, especially in Okinawa, where many U.S. military bases are located.
“We have come to an understanding that we both feel is in the best interests of our countries,” Rumsfeld told reporters as he and Nukaga emerged from the Pentagon after their three-hour talks.