The United States and Ukraine have sealed a significant agreement that grants Washington access to a portion of Ukraine's natural resources amidst the ongoing conflict with Russia. This deal, long anticipated, aims to create an investment fund that Ukraine hopes will reinforce US support as it continues to resist Russian aggression nearly three years after the invasion. Following the public unveiling of the deal, both parties shared important statements highlighting seven crucial takeaways.
Firstly, there is no expectation for Ukraine to repay its alleged "debt" to the US, which amounts to around $350 billion in aid, a point emphasized by Ukrainian Prime Minister Denys Shmyhal. This comes after previous remarks by former President Donald Trump, who insisted on repayment.
Secondly, Trump has proclaimed the deal as favorable for the US, suggesting that his country will perceive a greater return on its investment relative to the aid given by the Biden administration.
The language in the deal reflects a notably aggressive stance from the US regarding Russia, referencing the "full-scale invasion" and aiming to exclude any individuals or entities that have supported Russia from benefiting from rebuilding efforts in Ukraine. This stronger rhetoric is likely to resonate positively in Kyiv, capitalizing on its demand for increased pressure on Russia in discussions involving a potential ceasefire.
Moreover, while the deal is predominantly centered around Ukraine's wealth in minerals, it also covers oil, natural gas, and other hydrocarbons. Despite the US gaining joint access to these resources, outright ownership remains with Ukraine, showcasing a moderate shift from earlier drafts where hydrocarbons were excluded. Top US officials have expressed confidence that these resources could generate more value for Ukraine, contingent upon the cessation of hostilities.
Interestingly, the agreement does not impede Ukraine's ambitions to join the European Union, an aspiration it has pursued since formal talks began last June. Although apprehensions existed that the deal could complicate Ukraine's accession by favoring US investors, the agreement explicitly states that it respects Ukraine’s EU membership intentions and commits to negotiating terms to accommodate future modifications aligned with EU integration.
The military aspect of US support has also resurfaced, as the agreement is positioned as critical for Ukraine to maintain military assistance from the US. With ongoing changes to the military strategy since Trump’s return to the presidency, the extent of future assistance remains an open question.
Lastly, a notable component of the agreement involves financial reinvestment strategies. Profits from the investment fund are set to be reinvested in Ukraine's economy over the first decade, potentially providing a significant boost despite not being explicitly outlined in the signed document. Further negotiations on these terms are anticipated as the partnership evolves.
US Treasury Secretary Scott Bessent conveyed that the deal symbolizes an opportunity for the US to engage actively in Ukraine's recovery, while Deputy Chief of Staff Stephen Miller framed it as a form of repayment for the investments made in supporting Ukraine during the conflict. The ultimate ramifications of the deal on the ongoing war and the broader geopolitical climate remain to be seen, especially as Moscow continues to respond to these developments.
