U.S., South Korea agree on five-year plan to share defence costs

SEOUL (Reuters) – The United States and South Korea on Friday agreed on a new five-year plan on sharing the cost of keeping American troops in South Korea, South Korea’s foreign ministry and the U.S. Department of Statement said.

For 2026, the nations agreed to raise defence cost by 8.3% to 1.52 trillion won ($1.13 billion), South Korea’s foreign ministry said in a statement.

Seoul and Washington launched the talks earlier than usual in what was seen as a bid to conclude the negotiations before the U.S. election in November.

Lee Tae-woo, South Korea’s chief negotiator, and Linda Specht, the top U.S. negotiator for talks on defence cost sharing with Korea, finalised the new deal after eight rounds of talks that began in April, held just before the existing deals were due to expire next year.

Some 28,500 American troops are stationed in South Korea as part of efforts to deter nuclear-armed North Korea.

South Korea began shouldering the costs of U.S. deployments, used to fund local labour, the construction of military installations and other logistics support, in the early 1990s.

Donald Trump, the Republican nominee in the November election, had during his presidency accused South Korea, a key Asian ally, of “free-riding” on U.S. military might, and demanded that it pay as much as $5 billion a year for the U.S. deployment.

During his presidency, both sides had struggled for months to make progress, before reaching a deal with his successor Joe Biden, when Seoul agreed to increase its contribution by 13.9%, the biggest annual rise in nearly two decades.

The cost sharing rise for 2026 compares with the average annual increase of 6.2% for the past five years, to factor in higher maintenance costs and additional local staff, Seoul’s foreign ministry said.For 2027~2030, they agreed to use the Consumer Price Index as a reference and work to make sure the annual increase does not exceed 5%, it said.

($1 = 1,339.6400 won)

(Reporting by Josh Smith and Cynthia Kim; Editing by Ed Davies)