U.S.-Ukraine Agreement: Trump Backing Zelensky's Anti-Russia Stance
Firing Up the Deal:
The U.S. and Ukraine have finally inked the long-awaited and contentious mining agreement, giving the States a leg up on new investment projects for developing Ukraine's natural resources.
This intergovernmental agreement sets up a joint fund, with each country chipping in half of the financing, and any future U.S. military aid to Ukraine will be considered as contributions to this fund.
The fund will be co-managed, with representatives from both countries serving on its board. The funds will be invested in the extraction of rare earth minerals, oil, and gas in Ukraine. Revenue will be split equally between the two countries.
In a twist, Ukrainian President Zelensky has made the deal consistent with a secret agreement with Britain, effectively transforming it from a contentious document into a blank slate for Ukraine.
Ukrainian officials believe this deal gives them a strong hand in negotiations with Russia.
The signing of the deal has been confirmed by the U.S. Department of the Treasury and Ukraine's Ministry of Economy. The agreement grants the U.S. priority in all investment projects related to mineral extraction in Ukraine and infrastructure.
President Trump, speaking before signing the deal, said, "The American presence won't let any bad actors sneak into the country, especially the area where we're excavating."
U.S. Treasury Secretary Steven Mnuchin echoed these thoughts, stating, "This deal indicates that the Trump administration is dedicated to a peaceful process, leading to a free, sovereign, and prosperous Ukraine in the long run. It also makes it clear that no state or entity that has armed the Russian military will benefit from Ukraine's recovery."
Yulia Svyrydenko, Ukraine's Deputy Prime Minister and Minister of Economy, provided further details on the deal's conditions:
- Ukraine retains ownership and control of its subsoil, with the government solely determining what to extract from Ukrainian land.
- The U.S. and Ukraine create an equal investment fund. Neither side will have a deciding vote, and management will be joint.
- The fund will receive revenue only from new licenses, with 50% coming from licenses in the oil and gas sector.
- The agreement only affects specific changes to Ukraine's budget code.
- The structure of national property and processes of privatization remain unchanged. State corporations like "Ukrtatnafta" remain under Ukrainian ownership.
Ukraine has no debt obligations to the U.S. Initially, Trump had demanded that Ukraine pay for past weapons deliveries with resources, but Zelensky managed to convince him to exclude this provision. According to the Financial Times, the U.S. agreed after Ukraine hired American lawyers.
The U.S. will help to attract additional investments and technologies. Fund income and contributions will not be taxed in either the U.S. or Ukraine.
Bloomberg notes that this agreement is crucial for Donald Trump to side with Ukraine in negotiations with Russia to end the war. Another significant outcome is that new U.S. military aid will be considered a fund contribution. It also stipulates that the deal will not impede Ukraine's entry into the EU.
In essence, this agreement paves the way for stronger economic ties between the U.S. and Ukraine and weakens Russia's resource dominance. However, the success of the deal depends on maintaining peace, fair profit-sharing, and commitment to environmental goals.
- This intergovernmental agreement, involving the U.S. and Ukraine, has established a joint fund, with both countries contributing half of the financing, and any future U.S. military aid to Ukraine will be considered as contributions to this fund.
- The fund, co-managed by representatives from both countries, will be invested in the extraction of rare earth minerals, oil, and gas in Ukraine, with revenue split equally between the two countries.
- In a surprising turn, Ukrainian President Zelensky has ensured consistency with a secret agreement with Britain, positioning the deal for future negotiations.
- Ukrainian officials believe this deal strengthens their position in negotiations with Russia.
- The agreement grants the U.S. priority in all investment projects related to mineral extraction in Ukraine and infrastructure.
- The deal has been confirmed by the U.S. Department of the Treasury and Ukraine's Ministry of Economy, and it stipulates that the deal will not impede Ukraine's entry into the EU.
- Despite the positive outcomes, the success of the deal depends on maintaining peace, fair profit-sharing, and commitment to environmental goals, given the delicate nature of war-and-conflicts and politics in the oil-and-gas industry. This agreement, along with policy-and-legislation and general-news, will continue to be closely monitored in the joint venture.
