(ATTN: ADDS more info in paras 8-12; RECASTS 5th para)
By Song Sang-ho
SEOUL, April 1 (Yonhap) -- South Korea and the United States could announce a defense cost-sharing agreement as early as Wednesday, a source said, as thousands of Koreans workers in the U.S. Forces Korea went on unpaid leave in the absence of a deal to fund their wages.
"In the broad scheme of things, the two sides have clearly reached the stage of putting the finishing touch on the negotiations, though various possibilities remain still open," the source told Yonhap News Agency on condition of anonymity.
"The possibility (of the announcement) cannot be ruled out," the source added, refusing to delve into other details, such as the duration of the new cost-sharing deal, called the Special Measures Agreement (SMA).
A local news report said the two sides have reached an agreement on a five-year SMA that would stipulate how much Seoul should pay during the 2020-2024 period for the upkeep of the 28,500-strong USFK. Last year's SMA, which called for Seoul to pay about US$870 million, expired in December.
A day before the furloughs of about 4,000 Korean employees in the USFK, South Korea's chief negotiator Jeong Eun-bo said that Seoul and Washington have "considerably" narrowed their differences, and voiced expectation for the conclusion of the SMA talks "in the near future."
The furloughs have triggered concerns they could disrupt day-to-day USFK operations and undercut the military's readiness against the backdrop of military tensions caused by Pyongyang's repeated rocket tests.
Since September last year, the two sides have held seven rounds of talks to negotiate the SMA. But they have struggled to meet halfway, particularly about Seoul's payments for stationing the USFK.
A bone of contention was Washington's demand for a hefty increase in Seoul's payments.
The U.S. initially called for a fivefold increase to around $5 billion but later revised downward its demand amid criticism that Washington was focusing more on financial interests than on strategic interests for regional stability.
Seoul had reportedly sought an about 10 percent increase from the previous year.
The negotiations appeared to have gained momentum after Presidents Moon Jae-in and Donald Trump held phone talks on March 24 on efforts to fight the new coronavirus.
In the talks, Trump expressed hope for the export of Korean-made medical equipment in response to the COVID-19 outbreak. Three South Korean firms are preparing for shipment to the U.S. of their coronavirus diagnostic kits after they won interim approval from the U.S. Food and Drug Administration.
Upon conclusion of the negotiations, the Seoul government is expected to push for parliamentary ratification before the four-year term for the 20th National Assembly ends May 29.
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