Discussion Paper: Critical Raw Materials, Local Content Policy and Ukraine’s Economic Recovery

Just ahead of the Ukraine Recovery Conference (URC) starting in Rome on 10 July, we publish our discussion paper Critical Raw Materials, Local Content Policy and Ukraine’s Economic Recovery. It analyses the prospects for implementing local content policies in the mineral resources sector, taking into account Ukraine’s international obligations. It was prepared with the support of FES Ukraine by economists Brian Milakovsky, Volodymyr Vlasiuk, Serhii Povazhniuk and Luke Cooper.

The authors offer both a measured assessment of the overall scale of Ukraine’s resources and outline a pathway for maximising their benefit to the country through the policy mechanism of local content. This approach provides Ukraine with the opportunity to move towards value capture within critical raw material value chains.

Commitments to Washington and Brussels

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

However, Ukraine will need to negotiate the necessary policy space to implement local content policy, which is currently heavily constrained by its Deep and Comprehensive Free Trade Agreement with the EU, as well as its signatory status to several World Trade Organization (WTO) agreements. Finally, Ukraine must navigate the potential contradictions between its commitments on critical raw materials to both Washington and Brussels to unlock the investment needed to make these resources a key driver of its economic recovery.

The paper was also featured by RedaktionsNetzwerk Deutschland (RND) in a recent article (in German only), analysing Ukraine’s untapped raw material potential.