(ATTN: UPDATES with details, background in paras 3, 6-14)
By Lee Haye-ah and Oh Seok-min
WASHINGTON/SEOUL, June 2 (Yonhap) -- The U.S. defense department said Tuesday it has accepted South Korea's proposal to fund the labor costs for all Koreans working for the U.S. Forces Korea (USFK) amid their stalled defense cost-sharing talks.
Around 4,000 employees were placed on unpaid leave starting April 1 amid the protracted stalemate in negotiations to work out a new Special Measures Agreement (SMA) that stipulates how much Seoul would pay for the upkeep of the 28,500-strong USFK.
"The Department of Defense has accepted the Republic of Korea's (ROK) proposal to fund the labor costs for all U.S. Forces Korea (USFK) Korean National (KN) employees through the end of 2020," the U.S. Department of Defense said in a release. South Korea will provide more than US$200 million for the entire Korean workforce, it said.
"USFK expects all KN employees to return to work no later than mid-June," it added.
The defense cost-sharing negotiations have been deadlocked after U.S. President Donald Trump rejected Seoul's offer as insufficient. Officials said Washington has asked Seoul to pay $1.3 billion per year, a nearly 50 percent increase from last year, while Seoul says its best offer stands at a 13 percent increase.
After the previous SMA expired at the end of last year, Seoul proposed in February that the two sides first settle the issue of salaries for the USFK workers and then work toward an overall cost-sharing agreement.
Washington objected to the idea, claiming it would "greatly detract from expeditiously concluding a mutually acceptable and comprehensive SMA."
In April, South Korea notified the United States of its intention to pay the workers first and then deduct the amount from whatever financial contribution it agrees to make under a new SMA.
"Since the last SMA lapsed on 31 December 2019, the United States has unilaterally shouldered the burden for all costs associated with U.S. Forces in Korea," the Pentagon said, citing labor costs, logistics contracts, and construction project design and oversight costs.
"This decision enables a more equitable sharing of the KN employee labor burden by the ROK and the U.S. More importantly, it sustains the Alliance's number one priority -- our combined defense posture," it added.
The Pentagon still maintained that South Korea should increase its contributions toward shared defense costs.
"We strongly encourage our Ally to reach a fair agreement as quickly as possible," it said. "The United States has shown considerable flexibility in their approach to the SMA negotiations and requests that the ROK does the same."
It added that without a new SMA critical defense infrastructure projects will remain suspended, the U.S. will continue to pay completely for all logistics support contracts, and "burden sharing will remain out of balance for an Alliance that values and desires parity."
"USFK's mid- and long-term force readiness remains at risk," it said.
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