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162 국방연구 제51권 제2호 The Improvement Plans Regarding Military Section Trade Imbalance Unfavorable to Korea with the USA Lyu, Kyu Yeol Key Words Military Section Trade Imbalance, Commercial Purchase, FMS, Government Procurement The purpose of this study is to present the plans for improving military section trade imbalance unfavorable to Korea with the USA. The Korean military section trade imbalance towards America for recent five years reaches about twentyfold. To this end, it is necessary to increase exports and decrease imports towards America in the field of military section trade. Of course, Korean government should actively develop defense industry. To reduce the imports from the USA, firstly, domestic R&D should be enlarged and foreign purchase curtailed. Secondly, the sources of weapon purchase should be diversified and competitive contracts enlarged. Thirdly, in the FMS purchase, ROK government should request the USA ceaselessly that ROK can enjoy all sorts of benefit through raising the status as an “A” group country. To improve trade imbalance by increase of exports towards America, firstly, the level of offset trade should be increased up to 50% from current 30% of contract amount of money. Secondly, ROK should receive technology transfer from America through joint production of weapon systems and increase the export scale towards the USA. Thirdly, the Ministry of National Defense should actively review the conclusion of Reciprocal Defense Procurement Agreement with the USA. Then, ROK can conquest disadvantage in the price competition. Fourthly, Korean firms operating defense industry should actively advance into the American defense procurement market. R&D expenditure should be expanded up to 10% of defense budget to improve military section trade imbalance through developing defense industry.