Donald Trump Tightens Requirements for Ukraine in Fossil Deal (Photo Getty Images) Author: Yuri Doshchatov
The US has offered Ukraine a new agreement not only on minerals, but also on an investment and development fund. The US continues to put pressure on Kyiv based on the principle of “Two steps forward and one step back.” RBC-Ukraine correspondent Yuriy Doshchatov found out what's wrong with the draft agreement.
Content
- What is the new US agreement about?
- Worldwide reaction to new US proposals
- The main threats of the new treaty
The US has offered Ukraine a new treaty “on natural resources”. It essentially replaces the first draft of the document, which failed to be signed in February. But now the content and level of the treaty differs significantly from the previous one.
Previously, it was a memorandum that does not require ratification. Now it is a substantial document of more than 50 pages that must be ratified by the Rada. The full text of the document has not been made public anywhere, but the details that have appeared in the public space have not yet been denied either in Ukraine or in the United States.
Deputy Prime Minister Yulia Svyrydenko confirmed that the government had received the document from the US and that Kyiv was currently formulating its position on the draft of this deal. In addition, she noted that any public discussions on the agreement only cause harm and hinder constructive discussions with American partners. “As soon as a consensus is reached, we will come out with a public position,” she said.
But it was impossible to avoid discussions. The content of the deal is so impressive that it immediately caused a stir among both the Ukrainian authorities and the international media.
The head of the Verkhovna Rada Committee on Foreign Policy, Oleksandr Merezhko, even has some doubts about the authenticity of the document. But if this is so, he calls it simply absurd. “It looks like this is not a fake, because this document is drawn up in the style of American law. But there is no 100% certainty that this is not a fake. If this is a truly serious proposal from the American administration, then serious problems arise from the point of view that this document is absurd, to put it mildly,” Merezhko noted.
What is the new US agreement about?
The new draft agreement provides for the creation of the “American-Ukrainian Fund for Reconstruction and Investment”, which will be managed by a supervisory board of 5 people, three of whom are from the United States with full veto power, noted People's Deputy Yaroslav Zheleznyak.
The first project on rare earth metals concerned the extraction of uranium, titanium, lithium, graphite, etc. Their deposits are mainly in the Kirovograd, Zhitomir, Dnepropetrovsk and Donetsk regions.
The new agreement will cover not only rare earth metals, but a broader list. It concerns all minerals, both those that have already been developed and those that are new. “There is oil, gas, both new and existing throughout the territory of Ukraine,” Zheleznyak noted. And these are not only minerals that are state-owned. “We are talking about extraction by both state and private companies,” the MP emphasized.
The fund from the American side will consist of aid money that the US has provided to Ukraine since 2022. “And they can make a profit at their own discretion. And they receive “royalties” from the Fund first (and then Ukraine) +4%,” Zheleznyak noted. It should be noted here that the amount of aid from the US is still a controversial issue. Donald Trump sometimes talks about $350 billion. President Volodymyr Zelensky – about an amount several times smaller.
The agreement is open-ended and can only be changed or terminated at the initiative of the United States. Summarizing the analysis of the draft agreement, Zheleznyak noted that the United States is effectively receiving the “right of the first night” to all new infrastructure projects and the right of veto on the sale of resources.
“This is an agreement in the style of conquistadors offering something to the Incas,” says ironically Deputy Director of Securities Trading at Dragon Capital Sergey Fursa, commenting on the document. Considering that the US is not increasing support for Ukraine yet, signing such a document is not worth it at all, he believes. “The States do not promise us any help in the future, so there is no reason to support such extortion,” Fursa is convinced.
Worldwide reaction to new US proposals
The Times suggested that the new agreement is an attempt by the Trump administration to gain control over Ukraine's natural resources in exchange for brokering a ceasefire. “Ukrainian officials have expressed concerns that such demands could turn the country into a Washington vassal,” the newspaper notes.
The German publication Welt notes that the deal between the US and Ukraine on the development of natural resources has drawn criticism, as some see it as an attempt by the US to treat Ukraine as a vassal state, gaining unfair advantages from the arrangement. The lack of published details of the agreement, the publication notes, has given rise to speculation and discontent about the balance of power and Ukraine's role in the agreement. Critics argue that the agreement is economically and politically one-sided and undermines Ukraine's sovereignty.
The Financial Times noted that the new US agreement allows it to control Ukraine's critical minerals and energy resources without providing any security guarantees.
Experts note that the proposed deal does not provide security guarantees to Ukraine from the United States . This is worrying because Ukraine could hand over control of its resources without receiving corresponding commitments to protect them.
The main threats of the new treaty
It is already possible to identify several main threats from the treaty proposed to Ukraine with the United States. First of all, this is a threat to sovereignty and economic dependence . Such threats are due to the fact that the United States will effectively have complete control over the energy and extractive industries. This could lead to an increase in Ukraine's dependence on external management and a limitation of its ability to independently manage its resources.
The second problem concerns the filling of the state budget due to unfair conditions of income distribution. Revenues from the use of subsoil and from the profits of energy companies went and go to the state budget. According to the conditions proposed by the US, they should now go to the Reconstruction and Investment Fund. These changes will lead to a complete revision of Ukraine's cooperation with the IMF and will create budget risks.
It is highly likely that the US draft is not the final version of the agreement. The document will be worked out in cooperation with Ukrainian specialists, and the quality of its final version will depend on the skills of the negotiators. Meanwhile, the US is publicly pushing Ukraine. US Treasury Secretary Scott Bessent recently said that the agreement could be signed as early as next week. While Volodymyr Zelensky made it clear that it is too early to talk about signing.
In preparing the text, publications from Western media, statements by Deputy Prime Minister and Minister of Economy Yulia Sviridenko, head of the Verkhovna Rada Committee on Foreign Policy and Interparliamentary Cooperation Oleksandr Merezhko, MP Yaroslav Zheleznyak, and commentary by Deputy Director for Securities Trading at Dragon Capital Serhiy Fursa were used.