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SEOUL — A large portion of South Korea’s payments toward U.S. military costs on the peninsula will shift from cash to goods in coming years, under a five-year agreement proposed between the two countries.

The latest Special Measures Agreement would begin in January and calls for South Korea to pay 760 billion won, or $585.4 million, in 2009 toward the cost of keeping 28,500 U.S. troops in the country, according to South Korean and U.S. foreign ministry officials.

But by 2011, the Korean payments for construction would be in goods and services, according to an official at South Korea’s Ministry of Foreign Affairs and Trade. Costs of Korean labor and munitions support on the U.S. bases would continue to be paid in cash, he said.

The agreement must still be approved by the National Assembly, according to U.S. Embassy spokesman Aaron Tarver.

Under the terms, the contribution amount — both in cash and goods — would be tied to the consumer price index at a two-year lag, the ministry official said.

For example, the 2010 payment would change depending on the price index for 2008.

The maximum the contribution would grow in a year is 4 percent.

Earlier this year, U.S. officials had asked South Korea for a longer-term agreement. In the past, the cost-sharing terms ranged from two to three years.

This year, South Korea paid 741.5 billion won, or $571.1 million at current exchange rates.

That represents about 41 percent of USFK’s upkeep, officials said this past spring when the won was stronger against the dollar. A more current estimate of the overall share was unavailable on Monday.

The South Korean money can be used for transformation costs, including moving U.S. troops from the 2nd Infantry Division near the border with North Korea to the future U.S. headquarters in Pyeongtaek, south of Seoul.

The money may not be used to build any entertainment facilities for U.S. troops, the ministry official said.

The agreement would expire in 2013.


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