South Korea will pay the United States 1.04 trillion won ($924 million) as a contribution for maintaining 28,500 American troops in the region for a year, after a deal was signed in Seoul on Sunday.
The deal will officially go into effect after it receives parliamentary approval in South Korea, which is expected to take place in April, according to Yonhap news agency.
South Korea has shared the financial burden for USA troops since the early 1990s.
"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. President Donald Trump has said South Korea should pay more.
The last agreement expired on December 31.
"The U.S. government realizes that Korea does a lot for the alliance and for peace and stability of this region", Betts said. "But it's an important part and we are pleased that our consultations resulted in an agreement that I think will strengthen transparency and strengthen and deepen our cooperation in the alliance".
The allies had struggled to reach a breakthrough despite 10 rounds of talks since March, amid Trump's repeated calls for a sharp increase in South Korea's contribution.
But both sides worked to hammer out a deal to minimize the impact of the lapse on ROK workers on US military bases, and focus on nuclear talks ahead of a second summit between Trump and leader of the Democratic People's Republic of Korea (DPRK) Kim Jong Un at the end of February, Seoul officials said.
The United States agreed there will be no change in USA troop levels in South Korea, the Ministry of Foreign Affairs said in a statement.
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.
After the meeting, Trump suspended major joint military exercises with South Korea. 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. Their first summit in Singapore last June resulted in Kim's vague commitment to the "complete denuclearization of the Korean Peninsula", a term that his propaganda machine previously used when it argued it would only denuclearize after the USA withdraws its troops from South Korea.
South Korean Foreign Minister Kang Kyung-wha and Timothy Betts, acting Deputy Assistant Secretary and Senior Advisor for Security Negotiations and Agreements in the U.S. Department of State, talk during their meeting at Foreign Ministry in Seoul, South Korea, February 10, 2019.
Trump's top envoy for North Korea, Stephen Biegun, visited Pyongyang last week to work out details of the upcoming summit.
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.
In order to ensure that the Alliance remains ready to "Fight Tonight", defend the Korean Peninsula, and (if necessary) defeat North Korea, South Korea and the United States prioritize the development and deployment of a wide array of military assets. Late previous year, the USA 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.
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