Is the Old World Order Gone for Good? Carney Thinks So!

Canadian Prime Minister Mark Carney has asserted that the "old order is not coming back" during his address at the World Economic Forum in Davos, Switzerland, urging middle powers to unite against economic coercion from dominant nations. His remarks reflect a growing concern about the geopolitical landscape and the need for collaboration among nations like Canada, which he described as a stable partner amidst shifting alliances.

Last updated: 05 October 2023 (BST)

What’s happening now

Carney's speech at the forum has garnered significant attention, especially with its implications for international relations and Canada’s position on the global stage. He highlighted the urgency for middle powers, such as Canada, Australia, and South Korea, to collaborate in response to economic bullying from major nations, particularly the United States. This call to action comes amid rising tensions over tariffs, territorial claims, and shifting alliances, emphasising the need for collective action to safeguard national interests.

Key takeaways

• Mark Carney urges middle powers to unite against economic coercion from great powers.
• He affirms Canada's support for Greenland and its commitment to NATO.
• Carney warns that the global order is undergoing significant changes, describing it as a "rupture, not a transition."

Timeline: how we got here

The geopolitical landscape has been evolving rapidly, with key events leading to Carney's remarks:

• 2017: Tensions rise as Donald Trump threatens to impose tariffs on allies.
• 2019: Canada and other middle powers begin to reassess their global roles amid rising nationalism.
• 2020: The COVID-19 pandemic highlights vulnerabilities in global supply chains and increases calls for cooperation among middle powers.
• October 2023: Carney delivers a significant speech at the World Economic Forum, addressing the need for unity among middle powers.

What’s new vs what’s known

New today/this week

Carney's speech has brought to light Canada's strategic positioning in light of the US's aggressive trade stance and territorial ambitions, particularly regarding Greenland. His emphasis on forming coalitions based on shared values indicates a shift in Canada’s diplomatic strategy.

What was already established

The concept of middle powers acting collectively in response to great power politics is not new. Historically, nations like Canada have sought alliances and partnerships to bolster their influence and security. However, Carney's recent comments underscore an urgent need for these nations to reassess and strengthen their collaborations in response to contemporary challenges.

Impact for the UK

Consumers and households

For UK consumers, the implications of Carney's address may become evident in trade relations and potential tariff changes as the UK navigates post-Brexit negotiations. Increased tensions could lead to higher prices for imported goods or shifts in availability.

Businesses and jobs

UK businesses may find themselves in a precarious position if the US continues to leverage economic coercion. Companies reliant on trade with both the US and Canada may need to adapt to new tariffs or trade agreements that could affect their operations and workforce.

Policy and regulation

As the UK government observes these developments, policy adjustments may be necessary to strengthen relationships with middle powers. Increased engagement with Canada and other nations may lead to new trade agreements and collaborative initiatives, particularly in defence and security.

Numbers that matter

• 5–10%: Estimated tariff increases on goods traded between the US and its allies if current tensions escalate.
• £1.5 billion: Value of trade between Canada and the UK in 2022, highlighting the importance of strong bilateral relations.
• 30,000: Approximate number of UK jobs dependent on trade with Canada, underscoring the economic ties between the two nations.

Definitions and jargon buster

• Middle powers: Nations that exert significant influence in global affairs despite not being classified as great powers (e.g., Canada, Australia).
• Great powers: Countries with substantial military and economic strength, often holding permanent seats on the United Nations Security Council.
• NATO: North Atlantic Treaty Organisation, a military alliance of countries from North America and Europe committed to mutual defence.

How to think about the next steps

Near term (0–4 weeks)

In the coming weeks, watch for potential shifts in trade policies and diplomatic engagements between Canada, the US, and the UK, particularly in relation to tariffs and military collaborations.

Medium term (1–6 months)

Expect to see ongoing discussions among middle powers aimed at forming coalitions that can effectively respond to economic coercion. Additionally, Canada may solidify its military presence in Greenland, signalling a commitment to regional stability.

Signals to watch

• Upcoming trade negotiations between the UK and Canada.
• Changes in tariff rates announced by the US government.
• Military exercises or deployments in Greenland involving Canadian and NATO forces.

Practical guidance

Do

• Stay informed about changes in trade policies that may impact prices and availability of goods.
• Engage with businesses that are adapting to new trade dynamics.
• Monitor developments in international relations, especially concerning NATO and military collaborations.

Don’t

• Ignore potential impacts of tariff changes on your purchasing decisions.
• Assume historical alliances guarantee future security and prosperity.
• Overlook the importance of middle powers in global geopolitics.

Checklist

• Review how current geopolitical tensions might affect your industry.
• Stay updated on trade negotiations between the UK and Canada.
• Consider diversifying supply chains to mitigate risks from economic coercion.

Risks, caveats, and uncertainties

The future of international relations remains uncertain, particularly with the potential for shifts in US policy under the current administration. Economic coercion tactics could escalate, leading to further instability in trade relations. Additionally, responses from middle powers may vary, impacting their effectiveness in countering great power politics.

Bottom line

Mark Carney's speech underscores a critical juncture in international relations, urging middle powers to unite against economic coercion. As Canada positions itself as a reliable partner, UK readers should remain vigilant about the implications for trade, security, and diplomatic relations in an uncertain geopolitical landscape.

FAQs

What does Carney mean by "the old order is not coming back"?

Carney suggests that traditional geopolitical dynamics are changing, necessitating new alliances and strategies among middle powers to navigate the challenges posed by dominant nations.

How does Canada support Greenland?

Canada supports Greenland's right to self-determination and has expressed commitment to NATO, ensuring that any threats to Greenland’s sovereignty are seen as threats to all member states.

What role do middle powers play in global politics?

Middle powers, like Canada, play a crucial role in international relations by advocating for collective action and stability, often acting as mediators and stabilisers in geopolitical conflicts.