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(3rd LD) S. Korea, U.S. reach deal on sharing defense cost

All Headlines 16:21 January 12, 2014

(ATTN: UPDATES with reactions by S. Korea and U.S. in paras 7-9)

SEOUL, Jan. 12 (Yonhap) -- After months of tough negotiations, South Korea has agreed to pay 920 billion won (US$866 million) to the United States this year in their latest deal on sharing the cost of keeping American troops here, the foreign ministry said Sunday.

The figure represents a 5.8 percent increase from 869.5 billion won that Seoul paid in 2013 under a previous Special Measures Agreement (SMA), according to the ministry.

Under the new deal, which will last until 2018, the annual rate of increase in South Korea's share of the cost is capped at no more than 4 percent, though it is in accordance with inflation.

The rate increase would put South Korea's share of the U.S. troop upkeep at above 1 trillion won before 2018.

(3rd LD) S. Korea, U.S. reach deal on sharing defense cost - 2

The U.S. agreed to provide South Korea with a report twice a year detailing the unspent cash in an apparent attempt to improve transparency in the defense fund use, the ministry said.

Washington also agreed that the South Korean government can submit a similar report to parliament in a manner that does not divulge classified military information, it added.

"We achieved a lot, though not 100 percent," in improving the system of South Korea's contributions, a foreign ministry official said. He asked not to be identified, citing policy.

The U.S. Embassy in Seoul said the sides have successfully concluded negotiations for a new deal and South Korea will continue to provide cost-sharing support in the areas of labor, logistics, and construction.

"The majority of SMA funding is re-circulated through the Korean economy via salaries and benefits paid to Korean workers, supply and service contracts with Korean firms, and the implementation of local construction work," the embassy in a press release.

The five-year agreement, reached after several of round of talks since last July last year, is subject to parliamentary approval. The previous deal rewritten in 2009 expired at the end of last year.

The Seoul-Washington defense treaty had initially put the burden of financing U.S. defense activities solely on Washington. Still, the allies signed their first SMA in 1991, and the deal has since been renewed intermittently.

Currently, about 28,500 American troops are stationed in South Korea, a legacy of the 1950-53 Korean War.


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