Chang Won-sam, the top negotiator in defense cost-sharing negotiations and Timothy Betts, acting deputy assistant secretary and senior adviser for security negotiations and agreements of U.S. State Department signed the one-year contract at the foreign ministry in Seoul, Sunday which the South will pay 1.038 trillion won ($923 million) for stationing 28,500 USFK soldiers in South Korea. Seoul said they would pay $924 million this year compared to $830 million in recent years.
That's short of the $1.5 billion per year that Trump reportedly had at one point demanded.
Unlike past agreements, which lasted for five years, this one is scheduled to expire in a year, potentially forcing both sides back to the bargaining table within months.
Upon review from the presidential office and the Legislation Ministry, the tentative pact is expected to be submitted to the National Assembly for approval sometime around April, before it can take effect.
"The two countries reaffirmed. the importance of a strong South Korea-US alliance and the need for a stable stationing of the US troops", it said in a statement issued after a signing ceremony.More news: Venezuela seeks to double oil exports to India
"I think the response so far has been quite positive".
The two countries have been in a security alliance since the 1950-53 Korean war, which ended with an armistice rather than a peace treaty - with more than 28,000 U.S. troops stationed in the South to guard against threats from Pyongyang.
President Moon Jae-in also has been credited with playing a mediator role in persuading North Korean leader Kim Jong Un to engage in diplomacy aimed at ridding his country of nuclear weapons.
"United States government realizes that Korea does a lot for our alliance and peace and stability in the region", said chief USA negotiator Timothy Betts. "The SMA is only a small part of that". That's 8.two percent more than Seoul contributed last year, reflecting a rise in South Korea's defense budget this year. He also has insisted that North Atlantic Treaty Organisation members increase their contributions, and the issue is expected to arise soon in Japan in talks on funding the 50,000 US troops based there.
Trump told CBS' Face the Nation last Sunday that he had no plans to withdraw troops from South Korea.More news: Thomas Markle reveals 'heartbroken' Meghan's five-page letter
However, he added "maybe someday", reiterating that he would like to save the money.
The allies had failed to reach a new cost-sharing plan during some 10 rounds of talks. Betts also said the U.S.is pleased with the results, acknowledging Seoul's contribution to the alliance.
Many analysts expressed concern he may make a similar gesture in his upcoming talks with Kim.
After the June meeting, Trump announced a halt to joint military exercises with South Korea, saying they were expensive and paid for mostly by the United States. The big US military presence in South Korea is a symbol of the countries' alliance, forged in blood during the war, but also a source of long-running anti-American sentiments.
South Korea began paying for the United States military deployment in the early 1990s, after rebuilding its war-devastated economy.More news: Katy Perry's 'Blackface' Shoes Pulled From Stores Following Outcry
South Korea has agreed to substantially increase its contribution to cover the cost of keeping US troops in that country.