The newly signed Ukraine-U.S. Agreement on the Establishment of a U.S.-Ukraine Reconstruction Investment Fund (the Framework Agreement) has been widely regarded as a breakthrough in Ukraine-U.S. relations. Still, the media has paid little attention to the Ukrainian leadership’s difficult tradeoffs in its effort to create commercial incentives for the United States to continue providing military assistance to Ukraine, which is critical in its defense against Russia.
The White House touted the agreement as strengthening the U.S.-Ukraine strategic partnership for Ukraine’s “long-term reconstruction and modernization,” signaling to Russia that the United States has “skin in the game.” President Trump also stressed that the primary reason for the deal is to ensure a return on the U.S. investment in Ukraine’s defense since 2022, which, in his view, may ultimately exceed $350 billion. Ukrainian
President Volodymyr Zelenskyy noted that the agreement is “truly equal” and mutually beneficial for the parties. Among other things, the Ukrainian government celebrated the absence of repayment obligations for previous U.S. military assistance, the preservation of Ukraine’s control over its natural resources, and the potential to attract American investments in Ukraine.
However, members of the Ukrainian parliament, who ratified the Framework Agreement on May 8, were not all that cheerful—including some from Zelenskyy’s party. Besides the lack of explicit security components in the agreement, the parliament did not have access to a limited partnership agreement (the LP Agreement), and related instruments which contain key commercial terms, including those related to partnership management, the parties’ contributions, and revenue sharing. Indeed,
the extent of Ukraine’s concessions depends on the undisclosed commercial agreements. And, language in the Framework Agreement and information available in Ukrainian media suggest some of these concessions may be troublesome.
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