It's a political and military alliance between North America and Europe that was born out

of World War Two and signed into effect in 1949.

Its main aim back then?

To push back against any future aggression from the Soviet Union.

'The development of the North Atlantic Pact may have been reflected in the recent changes

in the Soviet high command.'

This became particularly important in 1955, when the Soviet Union and seven other European

countries signed the Warsaw Pact.

Communism was spreading across Eastern and Central Europe – and this pact promised

military support for Soviet satellite states.

There were 12 original NATO member countries - today there are 28.

Seven of those are former Warsaw Pact countries.

Each member of NATO has an equal say in discussions and decisions.

One of the most important principles of the NATO Treaty is Article 5.

It states that an attack on one country is, in theory, an attack against all members.

In theory all troops and equipment in each nation is available for NATO to use.

That means there are 3.5 million active personnel

and another 3.7 million in reserve.

So if it really came down to it, 7.3 million 'NATO forces' could be mobilized.

But Article 5 has been invoked only once in its nearly 70 year history - the day after 9/11.

It led to NATO action in Afghanistan.

Collectively, NATO member states account for most of the globe's military spending - just

under one trillion dollars.

In 2006 all 28 member states agreed to spend 2% of their GDP for the alliance's defense spending.

But in fact, in reality, that target is rarely met.

In 2015 the median spend was just 1.18%. The United States spent a whopping 3.7%.

That means that America accounted for some 70% of the alliance's total defence spending

and it is only one of 5 countries to spend more than 2%.

NATO admits the funding imbalance has been an issue since the start of the alliance,

and that it does cause friction.

During his Presidential election campaign, Donald Trump threatened to pull out of the

treaty, calling it 'obsolete.'

He also said the U.S. would only help countries that paid their fair share.

'Because we're protecting these countries.

We have the seal of the United States on these countries.'

A major test of Trump's tough stance could come in 2017, when US troops are due to be

deployed in Eastern Europe under Washington's European Reassurance Initiative.

The U.S. had gradually withdrawn its military presence from Europe since the fall of the

Soviet Union…

But that all changed in 2014 when Russia seized Crimea and started conducting military operations

in eastern Ukraine.

The U.S. responded with a $1 billion emergency response.

Next year, that budget is set to triple to $3.4 billion.

But will President-elect Trump follow through?

We'll have to wait and see...

Phil Han, CNBC London.