Maximizing the benefits of Critical Raw Materials for Ukraine

Ukraine’s critical raw materials have become an object of global discussion since the negotiation and signing of an agreement with the United States that gives that country priority access to their development.

The discussion paper "Critical Raw Materials, Local Content Policy and Ukraine’s Economic Recovery" analyzes the prospects of implementing local content policies in the mineral resources sector, taking into account the international obligations undertaken by Ukraine. It was prepared with the support of FES Ukraine by economists Brian Milakovsky, Volodymyr Vlasiuk, Serhii Povazhniuk and Luke Cooper.

The authors provide both a sober assessment of the overall magnitude of resources and a pathway to maximizing their benefits for Ukraine through the policy mechanism of local content. The latter  provides Ukraine the opportunity to move towards value capture in critical raw material value chains.

As a country that has clearly defined its Euro-Atlantic trajectory and is working diligently towards EU accession, Ukraine is a logical partner for the West in developing its critical raw material supply security and reducing dependency  on Chinese producers.

However, Ukraine will need to negotiate policy space in which to practice local content policy, which so far is heavily constrained by its Deep and Comprehensive Free Trade Agreement with the EU and its signatory status to several World Trade Organization (WTO) agreements. Finally, Ukraine must manage the contradictions of its commitments on critical raw materials to Washington and Brussels to unlock the investment resources needed to make those materials a driver of its economic recovery.

Read the full publication here: