US, South Korea Cost-sharing Deal Expires Amidst Calls by North to End Seoul-US Exercises

Washington and Seoul failed to renew an agreement on sharing the cost of maintaining a US military presence in South Korea amid a standoff between the two sides over President Donald Trump’s demand for more South Korean contribution.

The expiry of the cost-sharing deal has come at a time when the North Korean leader,  Kim Jong-un on Tuesday urged South Korea to “completely halt” military exercises with the US. “Now that the two Koreas (are) on the path (to) peace and prosperity, we insist that joint military exercises with outside forces should no longer be allowed and deployment of war weapons such as outside strategic assets should be completely stopped,” Kim said.

Tensions with the North was one the main reasons for the US to base its forces in South Korea but now with detente in the air, Seoul no longer sees the US presence as vital for its security.

The agreementl had required South Korea to pay $830 million per year for the cost of maintaining some 28,500 American troops stationed in the country. The US and South Korean officials failed to reach consensus on splitting the bill of the American soldiers stationed on the peninsula during the ninth round of bargaining in November last year.

The negotiations for the renewal of the contract are in a deadlock over US President Donald Trump’s request for a 50-percent increase in South Korea’s contribution, according to a report by the Wall Street Journal.

According to the report, Trump is pushing for between $1.2 and $1.6 billion per year, but South Korean President Moon Jae-in has been resisting the demand. During the latest round of talks last month, American negotiators suggested signing a one year contract, but Seoul is said to have rejected the idea.

Trump has reportedly called on Seoul to cover the cost of deploying new aircraft carriers and bombers. The US has already deployed two Terminal High Altitude Area Defense (THAAD) launchers to South Korea.

In April 2017, Trump had demanded $1 billion from South Korea for the deployment of THAAD and had said that the trade pact between the two countries was unacceptable. Seoul rejected the demand.