The new Special Measures Agreement (SMA), the 12th of its kind since 1991, will raise South Korea's contribution to maintaining United States Armed Forces personnel and equipment stationed in the Korean Peninsula by 8.3 percent, with extra increases for the succeeding four years connected to the country's consumer price index rather than its defense budget.
The bilateral agreement, set to come into effect in 2026, will run through 2030. South Korea's National Assembly, which is presently controlled by parties in opposition to sitting President Yoon Suk-Yeol, has to agree to the SMA. The U.S. Congress does not need to approve the SMA.
Under the latest plan, South Korea's contribution will begin at 1.52 trillion won ($1.1 billion) in 2026.
If inflation stays at around two percent annually, the total contribution is anticipated to reach 1.64 trillion won ($1.2 billion) by 2030, marking a 17.2 percent growth from 2026 levels, with an average annual increase of 3.2 percent.
The current SMA, signed in 2021 under former President Moon Jae-in, linked South Korea's yearly contribution increases to the country's defense budget growth.
This formula led to sharper increases over the deal's term, with contributions growing from 1.04 trillion won ($780 million) in 2020 to 1.4 trillion won ($1.05 billion) by 2025, averaging a 6.2 percent annual increase.
Eight rounds of negotiations needed to reach latest agreement
As stated by Matthew Miller, a spokesperson for the U.S. Department of State, it took eight rounds of negotiations to reach the latest agreement.
"The agreement will be a significant accomplishment for both sides and will strengthen our alliance and our shared defense," Miller said.
The latest deal was led by South Korea's chief negotiator, Lee Tae-woo, and his American counterpart, Linda Specht, with the involvement of officials from the foreign, defense and economy ministries of both nations.
The two countries had an initial signing ceremony in Seoul on Thursday, Oct. 3, with a formal signing by senior officials at the vice-ministerial or ministerial level to follow, pending Cabinet approval and presidential confirmation.
"Korea and the U.S. have reached a conclusion in a relatively swift manner based on mutual understanding and the spirit of alliance. This will contribute to our shared goal of ensuring the stable stationing of USFK troops and maintaining a united defense posture," a foreign ministry official told the media.
America deploys more than 28,000 troops in South Korea, mainly U.S. Army personnel.
Their presence is essential for South Korea's defense against the aggression of North Korea, as both nations remain in a conflict that never officially ended but was stopped by a ceasefire in 1953. (Related: Gearing up for WWIII? Putin suggests sending missiles to North Korea.)
A heavily mined and barb-wired demilitarized zone works as a buffer, dividing the Korean Peninsula in half along the 38th parallel.
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