USA and South Korea are negotiating the burden sharing for the stationing of the 28000 troops in Korea. The core point of discord is the USA’s insistence to use the Korea provided funds to relocate its military bases to south of the Han River. South Koreans do not approve the proposal fearing its negative implication in South Korea domestic politics. South Koreans are interested in offering military equipment and materials on a case-by-case basis instead of offering a lump sum of cash in a bid to avoid domestic controversies over the defense cost-sharing issue.

Seoul’s contribution for burden sharing has been increasing over the years. Last year Seoul contributed 741.5 billion won ($787 million) under the 2006 Special Measurement Agreement, in which South Korea agreed to pay 725.5 billion, up 45.1 billion won from 2006, to the United States in 2007 and increase its level in 2008 in accordance with a rise in the consumer price index. According to USA the current Korean contribution amounts to only 41 percent of non-personnel stationing costs covering the salaries of Korean employees at U.S. bases, Korean contractors and service agents, as well as military construction, logistics procurements and maintenance and munitions storage. They are asking for this share to rise to 50/ 50 basis.

Currently Koreans are strongly differing with the USA's methods of calculation and are arguing South Korea is already making more than 50% contribution to USA forces in Korea. The difference over the proportion of host-nation funds between the two governments is resulting from different ways of assessing the values of host-nation support programs. For example, South Korea provides land for bases and firing ranges for free, unlike Japan and other nations where U.S. troops are stationed. U.S. forces are also exempted from taxation and benefit from reduced electricity and telephone charges.

Many south Koreans feels that if USA demand of using a part of the host nation's sharing funds in relocating its infantry units to the south of Seoul is met, then South Korea will be virtually footing most of the $10 billion bill for the relocation project. According to many Koreans this is not fair and defies logic and common sense. USA is trying to over smart and here believe South Koreans know nothing and can be easily manipulated. This will not work. USA must understand that there is limit to which USA can push South Korea.This is 2008 not 1950. South Korea cannot be pushed around in 2009. So USA must follow a more pragmatic policy to strengthen its relations with Korea.