Ukraine and US: New Deal on the Horizon

The US and Ukraine have taken a significant step forward in their economic partnership. They have signed a memorandum of intent to create an investment fund for Ukraine's natural resources and energy assets. This move comes after a challenging negotiation process that was temporarily derailed by political tensions. The memorandum was signed virtually, with officials hoping to finalize the full economic accord by the end of next week. Yulia Svyrydenko, Ukraine's first vice-prime minister and economy minister, confirmed the signing. She posted a photo of herself and US Treasury Secretary Scott Bessent in their respective offices. Svyrydenko highlighted that this memorandum is a testament to the constructive joint work of their teams. She emphasized that the full agreement would open up opportunities for significant investments, modernization of infrastructure, and a mutually beneficial partnership between the two nations. The signing of this memorandum signals positive steps forward in a negotiation process that has faced significant hurdles. Talks were previously derailed following a confrontation between Ukrainian President Volodymyr Zelenskyy and former US President Donald Trump. Zelenskyy mentioned that US negotiators proposed an interim step as a gesture of goodwill. He clarified that this memorandum of intent reflects their constructive and positive intentions, but it is not the final agreement.

The full agreement is expected to be signed by April 26, after Prime Minister Denys Shmyhal's visit to Washington. However, the details are still being finalized. Trump had advocated for a broad deal granting the US preferential access to Ukraine's natural resources. This was framed as compensation for the billions of dollars in military aid supplied to Kyiv under Joe Biden's administration. However, Zelenskyy has been cautious, seeking security guarantees in any deal. The US proposal, sent to Kyiv last month, went beyond a joint economic accord outlined in February. It marked a sharp escalation of Washington's demands while offering no security guarantees in return. Senior Ukrainian officials warned that the deal, as written, could threaten national sovereignty, divert profits abroad, and increase dependence on the US. The proposal covered all mineral resources, including oil and gas, and called for a supervisory board with US veto power to oversee a fund splitting revenues from energy and mineral projects between the two countries. Kyiv has been working to negotiate a better deal with the US. They have hired the US law firm Hogan Lovells to work with Olha Stefanishyna, deputy prime minister and justice minister. Progress has been made to walk back some of the most contentious US demands, which could have kept the deal from being ratified by Ukraine's parliament. However, specifics have not been provided while negotiations are still underway. The matter has been so sensitive that Zelenskyy launched an investigation into the leak of the latest US proposal. Once finalized, the agreement will need approval from Ukraine's parliament, the Verkhovna Rada.

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