The Korean government has begun procedures to join the European Union (EU)'s joint weapons procurement program worth 245 trillion won. If an agreement is signed, it could receive an exception from rules restricting the use of parts from third countries, but it must also meet strict conditions.
According to the EU on the 13th, Korea recently submitted a formal letter of intent to the European Commission to participate in the joint weapons procurement program "SAFE" (Security Action For Europe). SAFE is a scheme that will take effect early next year to support the rearmament of EU member states, providing low-interest loans to member states that embark on joint procurement.
In principle, the share of parts from third countries in weapons financed by the loans cannot exceed 35%, but countries that have a security and defense partnership with the EU or are EU accession candidates are not subject to this limit if they sign a separate bilateral agreement. As a result, the likelihood that Korean defense companies will benefit has increased.
The European Commission will review Korea's letter of intent and then decide whether to open bilateral negotiations. However, the conditions for concluding an agreement are strict. Defense companies from participating countries must have production facilities in Europe and meet certain financial contribution requirements. Given that the main purpose of the SAFE scheme is to support Ukraine and Europe's defense industry, this functions as a safeguard.
In addition, for a third country to participate, it must form a joint procurement team with at least two countries among EU, European Economic Area (EEA), European Free Trade Association (EFTA) member states, or Ukraine. Accordingly, there is speculation that Korea could cooperate with Poland and Romania, which have already signed large defense contracts and applied for SAFE loans. Based on the loan amounts the EU recently allocated, Poland received 43,734 million euros, or about 71 trillion won, becoming the largest beneficiary.
The United Kingdom and Canada submitted letters of intent ahead of Korea, and the European Commission is expected to soon begin negotiations with these countries for bilateral agreements. Türkiye, an EU accession candidate, also submitted a letter of intent, but its actual likelihood of participation is rated low due to conflicts with Greece and Cyprus.