Adam Zivo: Trump is trying to scam Ukraine — allies, beware

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Adam Zivo: Trump is trying to scam Ukraine — allies, beware The terms of a recently leaked draft peace deal amounted to an annexation of Ukraine's natural resources. The U.S. can't be trusted Get the latest from Adam Zivo straight to your inbox Sign Up Photo by TETIANA DZHAFAROVAROBERTO SCHMIDT/POOL/AFP/AFP via Getty Images

Article content According to a newly leaked draft contract, the Trump administration wants to confiscate large swathes of Ukraine’s resources, in perpetuity, as “payback” for American military support. This deal, which would functionally turn Ukraine into an economic colony of the United States, should frighten Canada and other allies who rely on Washington for security support.

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Article content The contract was provided by the Trump administration to Kyiv earlier this month, with Ukrainian President Volodymyr Zelenskyy being given only days to review and sign it. He ultimately refused to do so, despite intense pressure from the White House, out of concern that the agreement failed to provide Ukraine with real security guarantees and was, in general, not aligned with the country’s interests. “I defend Ukraine; I can’t sell our country,” he later told reporters, which was an understandable sentiment. Had it been ratified, the contract would have required that the U.S. and Ukraine establish a joint investment fund with “the exclusive right to establish the method, selection criteria, terms and conditions” of future licenses and projects. It would have also given the U.S. 50 per cent of Ukraine’s recurring revenues from “mineral resources, oil and gas resources, ports, other infrastructure (as agreed),” as well as half of its revenues generated by “all licences issued to third parties” in the future. For future licences, the contract reserved “a right of first refusal for the purchase of exportable minerals” for the U.S., as well.

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Article content The income would be subject to an American lien, meaning the U.S. would have had to be paid first, before Ukraine could see a penny from its own resource sector. The open-endedness of the proposed agreement’s wording — particularly the reference to the fund’s control of “other infrastructure” — makes it unclear what exactly might have been encompassed by the overarching agreement. Worse yet, it stipulated that it would operate under New York law, which meant that any future contractual disputes would have to be adjudicated in American courts outside Ukraine’s control. Although the fund set out in the draft contract to ensure that “hostile parties to the conflict do not benefit from the reconstruction of Ukraine,” its terms and conditions amounted to an annexation of the country’s natural resources. The existence of the document was made public last Monday by the Telegraph, a British newspaper, to the shock of Ukraine’s allies. Critics referred to the proposal as “shakedown diplomacy”; the Telegraph even noted that Ukraine was being asked to pay harsher reparations than those imposed on Germany after the First World War.

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Article content Their consternation was, and remains, entirely understandable. There appears to be no historical precedent (at least in contemporary times) for a superpower imposing such onerous costs upon a military ally. These types of vampiric arrangements are usually reserved for defeated adversaries. It should be noted that, according to one White House national security adviser, Ukrainian President Volodymyr Zelenskyy first showed interest in the idea of granting the U.S. access to his country’s rare earth minerals (i.e. lithium and uranium) in September, as part of a peace plan. The Trump administration has since contorted this idea beyond recognition, creating a predatory, one-sided deal instead. Not only did the draft contract fail to provide Ukraine with any real security guarantees, the economic concessions it demanded — estimated at US$500 billion (C$710) billion — were wildly disproportionate to the American aid provided to Ukraine. U.S. President Donald Trump has claimed that his country has spent US$350 billion on defending Ukraine, but this is simply untrue. Congress appropriated approximately US$183 billion to support Ukraine, but, not only was that budget not fully dispersed, much of it was spent within the U.S. to boost domestic weapons manufacturing capacities. According to Zelenskyy, Ukraine received only around $75 billion directly.

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Article content Depending on what figure one accepts, the Trump administration’s proposed “partnership” with Ukraine would have siphoned away between two and six times more wealth than inputted aid. While this would’ve been a remarkable return on investment for the U.S. from a business perspective, military alliances simply do not, and should not, operate along the principles of cutthroat trade. While all security partnerships are fundamentally transactional, they also require a certain degree of mutual respect and trust. Using military aid as a Trojan horse for economic colonization may be profitable in the short term, but it comes at the cost of breeding enemies over time. The U.S. should understand this, as it has historically benefited from these norms: imagine, for example, if France had demanded control over key economic sectors in the U.S. after aiding the American Revolution. Although a new, perhaps fairer version of the resource deal is reportedly being negotiated, the damage has already been done: how can western allies now place their faith in the U.S. if this might invite vassalization? Canadians should be especially alarmed. Would the U.S. demand “payback” for decades of security support, or for future military aid in the Arctic, by seizing control of Canada’s considerable resource economy? If yes, what further risks would that present given Trump’s new fixation on turning Canada into an American state? Who knows at this point. National Post

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