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The rare earths agreement, the mineral resources agreement, the natural and mineral resources agreement, or simply the economic agreement: these are all names for the treaty that the US and Ukraine wanted to conclude shortly after US President Donald Trump took office earlier this year.
After several attempts and changes, on April 30, Washington and Kiev signed an “Agreement on the Establishment of a US-Ukraine Investment and Reconstruction Fund.”
The agreement consists of only ten pages, plus two annexes. After the signing, Deputy Prime Minister and Minister of Economy of Ukraine, Yulia Svyrydenko, stated that, according to the document, Ukraine would jointly create a reconstruction investment fund with the US to attract large investments to the country.
The agreement does not mention any debt obligations that Ukraine owes to the US and does not change Kiev's path towards European integration.
According to Svyrydenko, the US will make contributions to the fund: in addition to direct financial resources, this could include air defense systems to help Ukraine, for example.
For its part, Kiev will contribute to the fund 50% of budget revenues from payments for new licenses for the extraction of important raw materials, but may also make additional contributions.
The fund will invest money in mineral, oil and gas extraction projects, as well as in associated infrastructure and processing.
Accordingly, Ukraine and the United States will jointly determine the specific investment projects for which the funds will be allocated. The fund is allowed to invest only in Ukraine.
"We believe that the profits and income of the fund in the first ten years will not be distributed, but can be invested only in Ukraine, in new projects or reconstruction. The conditions will be discussed later," the minister said.
The US-Ukraine agreement still needs to be ratified by the Ukrainian parliament. However, the parliamentary group of the opposition European Solidarity party is unhappy that MPs were not included in the negotiations on the agreement.
He calls on President Volodymyr Zelensko to hold talks with representatives of parliamentary groups and factions.
When will the first investments be made?
According to Ilya Neshodovsky of the Ukrainian social organization "Network for the Protection of National Interests" (ANTS), an agreement with the US is essential for today's Ukraine.
"We pay and give up part of our income, but in return we receive military and financial support, as well as American investment."
"Since the Americans will control how investments are made, they will presumably be more willing to invest in the Ukrainian economy," he explains.
However, the investments will not come immediately. Experts believe that they can only be expected after the hot phase of Russia's war against Ukraine is over, following a freeze in the conflict or the signing of a peace agreement.
"New projects are ruled out during the war. I don't think they will be possible before the middle of next year."
"Because companies that want to invest in Ukraine – whether in raw materials, mining or processing – should take this into account in their budgets for next year," Anatoly Amelin of the Ukrainian Institute for the Future said in an interview with DW.
He assumes that, in the best-case scenario, American investments will flow into Ukraine starting in 2027 and 2028. “The US remains motivated to help us, but future aid will accumulate as debt obligations in the fund,” says Amelin.
Will American military aid resume?
At the same time, experts note that the agreement is politically beneficial for Ukraine, as it continues cooperation with the US, including in terms of increasing US military assistance.
"This is a great political and diplomatic achievement for Ukraine," Tymofiy Mylovanov, director of the Kyiv School of Economics and former Ukrainian Economy Minister, wrote on Facebook.
"The agreement gives Trump a domestic political success, which also improves attitudes towards Ukraine in the US. Ukraine has managed to protect its interests in this agreement. All draconian demands on it were lifted despite unimaginable pressure. The agreement now looks fair and opens the door to increased US military aid to Ukraine," the former minister continued.
Experts note that immediately after the signing of the agreement, the media reported that Donald Trump had agreed to sell Ukraine weapons worth at least $50 million for the first time in his second term.
Did Zelensky receive security guarantees?
At the same time, experts emphasize that the signed agreement does not contain any security guarantees from the US for Ukraine.
This is exactly what President Volodymyr Zelensky had in mind when he initiated the signing of an agreement with the US. He wanted to receive security guarantees for his country in exchange for access to Ukrainian raw materials.
"This is an agreement for the future. The agreement is more political in nature, it is an attempt to restore relations with the US."
"But it does not contain security guarantees, and this is a real problem for Ukraine," says Yevhen Magda of the Ukrainian organization World Policy Institute.
He points out that Ukraine has already signed more than three dozen security agreements with international partners, which are more beneficial in terms of security policy than the agreement with the US on the creation of an investment and reconstruction fund./ DW
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