Ukraine Deal. Beware Of Americans Bearing Gifts

Witnessing the extraordinary cage fight this week between Zelensky and Trump in the Oval Office was an eye-popping glimpse into what is normally kept behind closed doors when world leaders meet to nut out matters of great consequence. The two presidents loudly talked over each other, eye balls rolling, aggressively gesticulating and contradicting each other, with occasional interjections by Vice-President JD Vance - “I think it’s disrespectful for you to come into the Oval Office and try to litigate this in front of the American media!”

Shortly after the on-camera shouting match, Trump said the deal was off and posted: “He disrespected the United States of America in its cherished Oval Office. He can come back when he is ready for Peace.”

On one hand it was a public airing of a mafia-style shakedown to force Ukraine to hurriedly sign an Unequal Treaty – effectively, for Ukraine to cede sovereignty and control over key parts of its economy to the US. But Zelensky foolishly picked a fight with someone he desperately needs in his corner and the odds of the US now going to the mat for Ukraine just go a lot less likely.

Zelensky had dangled the minerals in front of Trump weeks ago as bait to try to lure the US into providing a security guarantee. The US position is, however, that the war is unwinnable and must be ended – so Trump wants to take the bait (the minerals) but not the hook (a security guarantee).

Former US Treasury Secretary Larry Summers likened the deal for their “ally” Ukraine to the Versailles Treaty imposed on Germany after World War I – when British PM Lloyd George said “We shall squeeze Germany until the pips squeak!”

Current Treasury Secretary Scott Bessent had a kinder spin: he said in the FT that the deal was focused on “turbocharging the country’s economic growth.” There is some merit in that. Reconstruction aid will obviously be enormously important; how it is negotiated, however, is also critical.

Boris Johnson lauded Ukraine last week for “the continuing heroism of the Ukrainian people in resisting a vile act of unprovoked aggression”. I’ll have to go back and check if he was referring to Russia or the United States. Bo-Jo called the minerals deal “the great prize”, a holy grail that Ukraine should be thrilled about. However, the former Clown King of England did let slip that the deal was akin to the WWII US Lend-Lease “assistance” to Britain:

"Yes, it's extortionate, looked at one way, but so was Lend-Lease in 1941, wasn't it? Americans. Absolutely stiffed us. Stiffed us," Johnson said with jollity.

Homer (the Greek, not the Simpson) would have had a field day over all of this. He would have loved the metamorphosis of the Americans turning from godlike protectors into robber barons. In a neat twist, Trump, as a modern day Agamemnon, turns a gift (billions of dollars of Ukraine aid) into a Trojan Horse. Welcome to what is being described as the End of the Postwar World.

The core gambit by the US is to retroactively reclassify “aid” as “debt”. Granting the US the rights to a substantial portion of Ukraine's mineral wealth as "reparations" for what was previously “aid”. It sets a disturbing precedent in international relations.

The Kyiv Independent published the full text of the proposed deal on 26 February. Section 3 says 50% of future mineral revenues must be paid into the proposed Reconstruction Investment Fund. The US would have governance of the Fund – which would decide on distributions to shareholders and be subject to US law.

What we seem to be back to is the kind of unequal treaties the French imposed on Niger for uranium, Mali for gold, Guinea for diamonds (human beings too if we go a little further back), and by the British, the Ottomans and every other empire. None of this would have surprised Thucydides: “The strong do what they can; the weak suffer what they must."

The White House said in 2022: “The United States is proud to be the largest single donor of humanitarian, democracy, and human rights assistance to Ukraine.” It is worth pointing out that donor suggests “no strings attached”.

President Biden also said: “We are united in our abhorrence of Putin’s depraved onslaught, and we’re going to continue to have their back as they fight for their freedom, their democracy, their very survival.” As well as having Ukraine’s back, the US is now saying they will also have their minerals.

The Trump administration has got it right on one fundamental point: the war must end, there must be a return to diplomacy, culminating in a new security architecture for the whole of Europe.

Out on the driveway of the White House, following his rumble with Zelensky, President Trump said: “He wants to go on and fight, fight, fight. We’re looking for peace. We’re not looking for someone who is going to sign up a strong power and then not make peace because they feel emboldened.”

I think that is a valid point. I don’t, however, think Ukraine should be muscled into signing a hasty deal on resources.

It would be wrong that the Ukrainians, having sacrificed the sweet red wine of their youth, now have to smelt their own steel to turn into the chains of their own servitude to the American Empire. What valuable lesson might we all possibly learn from this?

Eugene Doyle is a writer based in Wellington. He has written extensively on the Middle East, as well as peace and security issues in the Asia Pacific region. He hosts the public policy platform solidarity.co.nz.

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