U.S., South Korea Reach Stopgap Deal for Labor Funding at Bases

(Bloomberg) -- The U.S. and South Korea reached a deal to fund Korean labor at American military facilities through the end of this year, a partial step that leaves unresolved a thornier issue of a comprehensive cost-sharing agreement.

The two agreed that South Korea would provide $200 million in funding for the entire Korean workforce at U.S. bases for the remainder of 2020, the Department of Defense said in a statement on Tuesday. About 4,000 of the 8,500 workers were put on an unprecedented furlough in April when the countries couldn't work out a measure to extend their cost-sharing deal that expired Dec 31.

A breakthrough has proved difficult with President Donald Trump asking for as much as a five-fold increase and South Korea, which paid about $1 billion last year for hosting U.S. troops, showing no signs of offering anywhere near that much.

“We strongly encourage our ally to reach a fair agreement as quickly as possible,” the Pentagon said in its statement. South Korean President Moon Jae-in's administration has indicated that it wouldn't pay much more than it did last year with many in his progressive camp and the conservative opposition calling the American demands unreasonable.

The Pentagon said without a new agreement, U.S. Forces Korea's “mid- and long-term force readiness remains at risk.” South Korea's Ministry of National of Defense said in a statement it welcomed the deal, adding the two sides “will make efforts to reach an agreement for the defense cost-sharing talks within the near future.”

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Trump has repeatedly insisted that the U.S. gets a raw deal from partners who host American troops around the world, and he's focused particular ire on what is known as the Special Measures Agreement with South Korea.

While the U.S. and South Korea have been bargaining, North Korea has been busy testing new types of solid-fuel, nuclear-capable ballistic missiles designed to strike anywhere on the Korean Peninsula and evade U.S. interceptors. It has fired off nine in March alone, a record for a month.

The negotiations in South Korea could affect other U.S. allies hosting troops, such as Japan, with Secretary of Defense Mark Esper saying the Trump administration wants that country to pay more, too. Japanese officials are watching the South Korea negotiations closely with the approach of talks set to begin later this year for a U.S-Japan cost-sharing deal.