South Korea has agreed to a 13.9 percent increase in its contribution to the cost of hosting some 28,500 US troops for 2021, the biggest annual rise in nearly two decades, its foreign ministry said on Wednesday.
The increase will take South Korea's contribution this year to 1.18 trillion won ($1.03 billion). Former US President Donald Trump questioned the extent of US funding of the defence of allies and had demanded that South Korea pay as much as $5 billion a year.
"The agreement resolved a vacuum that had lasted about a year and three months," the foreign ministry said in a statement.
"It provided a chance to reaffirm the importance of the alliance and the need for stable stationing of US Forces Korea."
The six-year Special Measures Agreement with the United States, which came after drawn-out negotiations and will boost South Korea's annual contribution to the bill for 2022 to 2025 in line with its annual defence budget increase, which was 5.4 percent this year, the foreign ministry said.
The pact replaces an arrangement that expired at the end of 2019, under which South Korea paid about $920 million a year. Both sides agreed to freeze South Korea's contribution for 2020, the ministry said.
In the last big annual increase, in 2003, South Korea paid 17 percent more than the previous year, according to data from a defence ministry white paper.
On the new link between the contribution to the cost of maintaining US forces and the defence budget, the ministry said the increase in the defence budget was a "reasonable, clearly verifiable standard" that reflected financial and security capabilities.
The ministry said it would take swift administrative steps and send the agreement to parliament for approval.
About 28,500 US troops are stationed in South Korea to help defend it against North Korea. The 1950-53 Korean War ended in an armistice, not a peace treaty.