During his annual State of the Union Address on February 5, Trump announced that he will meet with North Korean leader Kim Jong Un for a second time on February 27-28 in Vietnam. The South paid 960.2 billion won for the defense cost sharing in 2018.
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.
The South Korean news agency Yonhap reported that Meari, which it described as "one of the North's propaganda outlets", insisted in a column Monday that Washington owes "corresponding practical action" to North Korea in exchange for "active and preemptive efforts" like not bombing Japan since 2017.
The deal - which must still be ratified by South Korea's National Assembly - resolves a dispute between the longtime allies at a crucial time, with a second U.S.
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South Korean President Moon Jae-in plans to discuss the upcoming summit with Trump soon, according to a spokesman from the Blue House.
The choice of Vietnam as host of this month's summit between Trump and Kim shows the Southeast Asian nation is headed in the right direction, Vietnamese Prime Minister Nguyen Xuan Phuc said on Tuesday.
The disagreement had raised the prospect that Trump could decide to withdraw at least some troops from South Korea, as he has in other countries like Syria.
North and South Korea are pressing ahead with a joint bid to host to 2032 summer Olympic Games in a new sign of the unprecedented improvement in relations between the two countries.
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The state-run Radio Pyongyang also reportedly broadcast similar demands that the USA move towards "credible steps and responds with corresponding practical action".
Brinkmanship is common in the cost-sharing talks, which have taken place since 1991, but the USA -led effort to persuade North Korea to give up its weapons raised the stakes. The two leaders held their first unprecedented meeting in June previous year in Singapore. President Donald Trump has said South Korea should pay more.
About 70 per cent of South Korea's contribution covers the salaries of some 8,700 South Korean employees who provide administrative, technical and other services to the United States military.
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". The North and its main backer, China, also would like to see the USA military presence removed from their doorstep.
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Late past year, the USA military warned Korean workers on its bases they might be put on leave from mid-April if no deal was agreed.