SEOUL (REUTERS, BLOOMBERG) - South Korea has agreed to a 13.9 per cent increase in its contribution to the cost of hosting some 28,500 US troops for 2021, the biggest annual rise in nearly two decades after the US calls for greater funding.
The increase will take South Korea's contribution this year to 1.18 trillion won (S$1.4 billion). Former US President Donald Trump had accused South Korea of "free-riding" on US military might and demanded that it pay as much as US$5 billion (S$6.7 billion) a year.
"The agreement resolved the longest-ever vacuum that had lasted about a year and three months," South Korea's chief negotiator, Jeong Eun-bo, told a televised briefing.
"It provided a chance to reaffirm the importance of the alliance and the need for stable stationing of US Forces Korea."
The six-year Special Measures Agreement with the United States came after drawn-out negotiations and will boost South Korea's annual contribution to the bill for 2022 to 2025 in line with its annual defence budget increase, which was 5.4 per cent this year, the foreign ministry said in a statement.
The pact replaces an arrangement that expired at the end of 2019, under which South Korea paid about US$920 million a year.
Both sides agreed to freeze South Korea's contribution for 2020, the ministry said.
Although the US and South Korea announced that they had reached the deal on Sunday, details of the agreement were not released until now.
State Department spokesman Ned Price told a news briefing on Tuesday that the deal had been "negotiated carefully, and, at least in principle, successfully".
Secretary of State Antony Blinken and Defence Secretary Lloyd Austin will visit Seoul from next Wednesday. The trip is part of President Joe Biden's efforts to demonstrate an early diplomatic focus on Asia.
The US and Japan separately agreed last month to extend their soon-to-expire troop-funding deal by one year.
In the last big increase in its contribution, South Korea in 2003 paid 17 per cent more than the previous year, according to data from a defence ministry white paper.
On the new link between the contribution to the cost of maintaining US forces and the defence budget, the ministry said the increase in the defence budget was a "reasonable, verifiable indicator" that reflected financial and security capabilities.
But Shin Beom-chul, a security expert at the Research Institute for Economy and Society in Seoul, said aligning the two issues was a "mistake" for South Korea, one of the world's largest defence spenders, and it could bring budget pressure.
About 28,500 US troops are stationed in South Korea to help defend it against North Korea under a treaty of mutual defence signed after the 1950-53 Korean War ended in an armistice, not a peace treaty.
The treaty provided the basis for the stationing of US forces in South Korea, which began paying towards their costs in the early 1990s after rebuilding its war-devastated economy.
With negotiations making little headway after the last pact expired, about half of some 9,000 South Koreans working for the US military were placed on unpaid leave, prompting the two sides to scramble for a stopgap deal to bring them back to work.
Jeong said the accord stipulated that in future, workers can be get their existing salaries in the absence of a new deal.
The workers' union welcomed the agreement, saying it would help ensure stable work conditions. Without it, thousands more workers would have been forced to take unpaid leave next month, the union said.
