On Sunday, Seoul's Foreign Ministry said the countries signed a short-term agreement.
Chang Won-sam (right), South Korea's delegate to defense cost talks with the United States, exchanges a letter of accord with his counterpart Timothy Betts in a signing ceremony in Seoul on Sunday. 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.
Brinkmanship is common in the cost-sharing talks, which have taken place since 1991, but the US -led effort to persuade North Korea to give up its weapons raised the stakes.
"The United States government realizes that South Korea does a lot for our alliance and for peace and stability in this region", he said. "We are very pleased that our consultations resulted in an agreement, and I think that will deepen our cooperation in the alliance". This would allow Washington to call for additional increases in the amount South Korea would pay for the following year. The two sides had also difficulty on the final amount, as the Trump administration reportedly demanded an annual sum of around one billion dollars when the negotiations were close to an end late previous year.
About 70 percent of South Korea's contribution covers the salaries of some 8,700 South Korean employees who provide administrative, technical and other services for the US military.
Some conservatives in South Korea voiced concerns over a weakening alliance with the United States at the same time as negotiations with North Korea to deprive it of its nuclear weapons hit a stalemate.
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South Korea resisted increased spending but was concerned President Trump might put USA troop withdrawal on the table, or offer to scale back joint military exercises with the South even further, when he meets with North Korean dictator Kim Jong-un in Vietnam later this month - especially if the second Trump-Kim summit paves the way for a formal declaration of peace in the Korean War.
Trump tweeted in 2014 that South Korea was "absolutely killing us on trade deals", noting that "their surplus vs U.S.is massive - and we pay for their protection". During his election campaign, Trump suggested he could pull back troops from South Korea and Japan unless they took on greater a share of the financial burdens of supporting US soldiers deployed there.
A senior South Korean ruling party legislator said last month that negotiations were deadlocked after the United States made a "sudden, unacceptable" demand that Seoul pay more than 1.4 trillion won per year.
The ministry said that although the U.S. had demanded a "huge increase" in payment, they were able to reach an agreement that reflects "the security situation of the Korean peninsula". -North Korea summit due to take place at the end of the month in Hanoi, Vietnam.
Trump's top envoy for North Korea, Stephen Biegun, visited Pyongyang last week to work out details of the upcoming summit.
Trump surprised Seoul and many of his own aides when he announced after his first summit with North Korea on June 12 that he was suspending joint war games with South Korea, which he called "very expensive" and "provocative".
About 28,500 US troops are stationed in South Korea, where the United States has maintained a military presence since the 1950-53 Korean War. Late a year ago, the US military had warned the South Korean employees on its bases that they may be put on leave from mid-April if no agreement was reached.