Ukraine Likely Will Reject U.S. Economic Plan --- Draft of accord gives Washington first pick of country's natural resources

 

"KYIV, Ukraine -- The Trump administration expects Ukraine to quickly sign a new agreement that gives Washington sweeping powers over its ally's economy. The problem is that Ukraine almost certainly can't accept the terms.

The mismatch in expectations threatens to set up the U.S. and Ukraine for a new conflict over what President Trump can get in return for supporting Kyiv in its fight against Russia. A previous, less-expansive economic deal underpinned a blowup in the White House between Trump and Vice President JD Vance on one side, and Ukrainian President Volodymyr Zelensky on the other.

"Ukrainians feel that they cannot give up their entire economic sovereignty for nothing," said Daniel Bilak, a lawyer and a partner in the Kyiv office of Kinstellar.

What started out with Trump saying in February that he would like to get his hands on Ukraine's "rare earths" -- minerals used in modern technologies from cellphones to electric cars -- has developed into a plan for the U.S. to draw profits from Ukrainian economic projects across metals, oil, gas, and other natural resources, as well as infrastructure projects including ports and pipelines.

The 55-page draft, a copy of which was reviewed by The Wall Street Journal, is aimed at fulfilling Trump's demand to claw back billions in military and financial aid from Ukraine that has sustained its resistance to Russia since 2022.

Trump has put the U.S. contribution at $350 billion;

Ukraine says it is roughly $100 billion.

The draft, sent to Kyiv by the Treasury Department this past week, proposes a limited partnership registered in Delaware, and called the "United States-Ukraine Reconstruction Investment Fund." The draft is unusual for a deal between states as it resembles a commercial agreement, said Tymofiy Mylovanov, president of the Kyiv School of Economics and a former Ukrainian economy minister. "I don't know how you can write an intergovernmental commercial agreement," Mylovanov said.

Investment from the European Union, World Bank and the International Monetary Fund, among other entities, would be incompatible with this agreement, he said, adding that the Ukrainian parliament would never pass it.

The White House has presented the deal as mutually beneficial and a way to boost ties.

"The mineral deal offers Ukraine the opportunity to form an enduring economic relationship with the United States that is the basis for long term security and peace," said National Security Council Spokesman James Hewitt.

Ukraine has responded cautiously, and is working on an official response. The draft lacks security guarantees that Kyiv has been seeking, and reopens the question of whether Ukraine should repay the U.S. for the military aid it has been providing since 2022 -- a question that wasn't in a previous plan.

"It is very important to note the following: Any public discussions about the text of this agreement at this stage only harm the negotiations and hinder constructive dialogue with our American partners," Yulia Svyrydenko, Ukraine's economy minister, told Parliament on Friday.

Analysts said many of the emerging details would be hard for Ukraine to swallow. The fund would have the right of first refusal on all natural resource and infrastructure projects in Ukraine that the country is seeking investors for, both new and existing.

Those projects would pay profits into a fund managed by a board of directors consisting of three U.S. and two Ukrainian representatives, essentially giving Washington control of the fund's management. The fund's projects would have to avoid exporting critical minerals to strategic U.S. competitors.

The document states that the money from the fund would go toward repaying assistance the U.S. provided to Kyiv since 2022 events in Ukraine.

The document doesn't say what money would go toward much-needed rebuilding -- even as Ukraine struggles to maintain its essential services as Russian attacks continue.

If the document is signed, Ukraine would have 45 days to come up with a list of resource projects licensed by Ukrainian authorities.

Even if Kyiv wanted to find other investors for its vast mineral and natural resources, it would first have to present the project to the fund's board. If the fund declined to take it on, Ukraine couldn't offer other potential investors better economic terms in the following year." [1]

The reconstruction of Ukraine can be financed by the European Union, which is unable to invest its money anywhere else except in bureaucracy and inciting nuclear World War III.

1.  World News: Ukraine Likely Will Reject U.S. Economic Plan --- Draft of accord gives Washington first pick of country's natural resources. Lytvynenko, Jane; Ward, Alexander.  Wall Street Journal, Eastern edition; New York, N.Y.. 29 Mar 2025: A10.