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Amid the current great power rivalry, the “old rules-based international order is not coming back” and mid-sized nations around the world like Canada must join together to build economic alliances and resist coercion, pressure tactics and intimidation by superpowers to survive, says Canadian Prime Minister Mark Carney in a speech to delegates on January 20 at the World Economic Forum in Davos, Switzerland.
Carney, who became prime minister only last year, is a former Bank of England and Bank of Canada governor, Goldman Sachs banker and head of transition investing at Brookfield Asset Management, was speaking at the annual Davos meeting, which has partially been over shadowed by threats by US President Donald Trump to take control of Greenland and impose tariffs on European nations showing support for the autonomous Nordic territory that is part of Denmark, a member of the European Union.
“More recently, great powers began using economic integration as weapons,” Carney states. “Tariffs as leverage. Financial infrastructure as coercion. Supply chains as vulnerabilities to be exploited. You cannot ‘live within the lie’ of mutual benefit through integration when integration becomes the source of your subordination. The multilateral institutions on which middle powers relied – the WTO, the UN, the COP, the architecture of collective problem-solving – are greatly diminished.”
As a result, many mid-sized countries across the globe must develop greater strategic autonomy in energy, food, critical minerals, finance and supply chains. “A country that cannot feed itself, fuel itself or defend itself has few options,” Carney points out. “When the rules no longer protect you, you must protect yourself. But let us be clear-eyed about where this leads. A world of fortresses will be poorer, more fragile and less sustainable.”
In place of the old order with the “comfortable assumption that geography and alliance memberships automatically conferred prosperity and security is no longer valid”, a new “values-based realism” is urged that aims to be principled and pragmatic. “Principled in our commitment to fundamental values: sovereignty and territorial integrity, the prohibition of the use of force except when consistent with the UN Charter, respect for human rights. Pragmatic in recognizing that progress is often incremental, that interests diverge, that not every partner shares our values.”
Mid-sized countries, Carney argues, must prioritize broad engagement, while building strength at home, citing as examples, his government’s recent cutting of taxes on incomes, capital gains and business investment, removing all federal barriers to interprovincial trade, building domestic industries and fast-tracking huge investments in energy, artificial intelligence, critical minerals and new trade corridors.
As for examples of diversification abroad, he cites his government’s recent strategic trade partnerships with the European Union, China and Qatar and current negotiations on free trade pacts with India, the Association of Southeast Asian Nations, Thailand, Philippines and South America’s Mercosur trading bloc.
“Building a strong domestic economy should always be every government’s priority,” Carney notes. “Diversification internationally is not just economic prudence; it is the material foundation for honest foreign policy. Countries earn the right to principled stands by reducing their vulnerability to retaliation.”
