S. Korea agrees to pay 13.9% more for hosting U.S. troops

[Photo provided by The Korean Ministry of Foreign Affairs]

South Korea has agreed to raise its payment for stationing U.S. troops on its soil by 13.9 percent this year from last year, concluding one and half years of negotiations.

The Korean Ministry of Foreign Affairs announced Wednesday that the two countries finally agreed on detailed terms, including that Seoul will pay total 1.183 trillion won ($1.03 billion) for its contribution to the cost of hosting U.S. troops in the country for 2021, up from 1.039 trillion won in 2020. After failing to reach an agreement on South Korean’s share under the Trump administration, the two sides agreed to freeze Korea’s payment for 2020 at the same level of 2019, which was 1.039 trillion won.

Under terms, Korea will also raise its share each year in proportion to an increase in Seoul’s defense spending for the upkeep of the U.S. Forces Korea (USFK), the ministry added.

The deal was reached during the ninth round of ROK-US negotiations for the 11th Special Measures Agreement (SMA) held in Washington on March 5-7. The latest SMA will remain effective for six years until 2025.

The pact will go into effect after ratification by the National Assembly, replacing an arrangement that expired at the end of 2019.

The two countries began the negotiations over Korea’s contributions in September 2019, but the talks had stalled due to big differences over the cost. The U.S. under former President Donald Trump demanded South Korea to pay as much as $5 billion a year after accusing the ally of “free-riding.”

The lately agreed 13.9 percent increase reflects last year’s 7.4 percent increase in Seoul's defense spending in addition to the 6.5 percent rise in the cost for Korean workers in the USFK, the foreign ministry said in a statement.

South Korea’s SMA contribution from 2022 through 2025 will be linked to its defense spending and next year’s payment will thus grow by this year’s increase rate of 5.4 percent, or 1.247 trillion won in 2022 and close to 1.5 trillion won in 2025, given an average 6.1 percent increase per year planned in Seoul’s mid-term defense spending, according to the ministry.

The two countries also agreed to stipulate an SMA rule for the first time to enable Seoul to provide its share of the cost for Korean USFK workers at a level set in the previous year. Last year, about 4,000 Korean workers were furloughed as the deadlock in SMA negotiations continued amid the former Donald Trump administration’s demand for a hefty increase in Seoul’s contributions.

Following the final agreement, the two allies are expected to focus more on their cooperation to address geopolitical risks on the Korean Peninsula including the North Korean nuclear weapon programs and to enhance the two countries’ alliance, the ministry expected.

The official signing of the new SMA is expected to be held during a visit to Seoul by U.S. Secretary of State Antony J. Blinken and Defense Secretary Lloyd Austin next week.

Later Wednesday, the Korean foreign ministry confirmed that Blinken will visit Korea from March 17 to 18. He will meet with his counterpart Chung Eui-yong, Korean foreign minister, on the first day, and the two are expected to discuss Korea-U.S. relations and other regional and global issues on top of the current situation on the Korean Peninsula.

U.S. Defense Secretary Austin will also visit from March 17 to 19 for the 5th Korea-U.S. Foreign and Defense Ministers’ Meeting, the foreign ministry confirmed.

The visit by Secretary Blinken and Secretary Austin will mark the first U.S. ministerial-level visit to Korea since the Biden administration took office.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]