Prime Minister Mark Carney gave a forceful speech Tuesday on the World Economic Forum in Davos, Switzerland, on the “latest world order” and the way middle powers like Canada can profit by working together.
The speech was delivered against a backdrop of rising geopolitical tensions between great powers like Russia, China and america, and as U.S. President Donald Trump threatens allies with tariffs and pushes to accumulate Greenland from Denmark, a member of the NATO military alliance.
Below is the total transcript of the English parts of Carney’s remarks.
Thanks very much, Larry. I’m going to start out in French, after which I’ll switch back to English.
(IN FRENCH)
Evidently on daily basis we’re reminded that we live in an era of great power rivalry — that the rules-based order is fading, that the strong can do what they will, and the weak must suffer what they have to.
And this aphorism of Thucydides is presented as inevitable, because the natural logic of diplomacy reasserting itself. And faced with this logic, there’s a robust tendency for countries to go along, get along to accommodate, to avoid trouble, to hope that compliance will buy safety.
Well, it won’t. So what are our options?
In 1978, the Czech dissident Václav Havel, later president, wrote an essay called “The Power of the Powerless,” and in it he asked an easy query: how did the communist system sustain itself?
And his answer began with a greengrocer.
Every morning, the shopkeeper places a sign up his window: “Staff of the world unite.” He doesn’t consider in it. Nobody does. But he places the sign anyway to avoid trouble, to signal compliance, to get along. And since every shopkeeper on every street does the identical, the system persists — not through violence alone, but through the participation of extraordinary people in rituals they privately know to be false.
Havel called this living inside a lie. The system’s power comes not from its truth, but from everyone’s willingness to perform as if it were true. And its fragility comes from the identical source. When even one person stops performing, when the greengrocer removes his sign, the illusion begins to crack.
Friends, it’s time for firms and countries to take their signs down.
For many years, countries like Canada prospered under what we called the rules-based international order. We join its institutions, we praised its principles, we benefited from its predictability. And since of that, we could pursue values-based foreign policies under its protection.
We knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically, and we knew that international law applied with varied rigor, depending on the identity of the accused or the victim.
This fiction was useful, and American hegemony particularly helped provide public goods, open sea lanes, a stable economic system, collective security, and support for frameworks for resolving disputes.
So we placed the sign up the window. We participated within the rituals, and we largely avoided calling out the gaps between rhetoric and reality.
This bargain now not works.
Let me be direct. We’re within the midst of a rupture, not a transition.
Over the past 20 years, a series of crises in finance, health, energy and geopolitics have laid bare the risks of utmost global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.
You can’t live inside the lie of mutual profit through integration when integration becomes the source of your subordination.
Get breaking National news
For news impacting Canada and around the globe, join for breaking news alerts delivered on to you once they occur.
The multilateral institutions on which the center powers have relied — the WTO, the UN, the COP, the very architecture of collective problem solving — are under threat. In consequence, many countries are drawing the identical conclusions that they have to develop greater strategic autonomy in energy, food, critical minerals, in finance and provide chains. And this impulse is comprehensible.
A rustic that can’t feed itself, fuel itself, or defend itself has few options. When the principles now not protect you, it’s essential to protect yourself.
But let’s be clear-eyed about where this leads. A world of fortresses will probably be poorer, more fragile, and fewer sustainable.
And there’s one other truth: if great powers abandon even the pretense of rules and values for the unhindered pursuit of their power and interests, the gains from transactionalism will turn into harder to duplicate.
Hegemons cannot continually monetize their relationships. Allies will diversify to hedge against uncertainty. They’ll buy insurance, increase options as a way to rebuild sovereignty, sovereignty that was once grounded in rules but will increasingly be anchored in the power to face up to pressure.
This room knows that is classic risk management. Risk management comes at a price, but that cost of strategic autonomy, of sovereignty, will also be shared. Collective investments in resilience are cheaper than everyone constructing their very own fortresses. Shared standards reduce fragmentations. Complementarities are positive sum.
The query for middle powers like Canada shouldn’t be whether to adapt to the brand new reality — we must.
The query is whether or not we adapt by simply constructing higher partitions, or whether we will do something more ambitious.
Now, Canada was amongst the primary to listen to the wake-up call, leading us to fundamentally shift our strategic posture. Canadians know that our old, comfortable assumptions that our geography and alliance memberships robotically conferred prosperity and security, that assumption isn’t any longer valid. And our latest approach rests on what Alexander Stubb, the president of Finland, has termed value-based realism.
Or, to place it one other way, we aim to be each principled and pragmatic. Principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of using force except when consistent with the UN Charter and respect for human rights.
And pragmatic in recognizing that progress is commonly incremental, that interests diverge, that not every partner will share all of our values.
So we’re engaging broadly, strategically, with open eyes. We actively tackle the world because it is, not wait around for a world we want to be.
We’re calibrating our relationships so their depth reflects our values, and we’re prioritizing broad engagement to maximise our influence, given the fluidity of the world in the meanwhile, the risks that this poses and the stakes for what comes next.
And we are not any longer just counting on the strength of our values, but additionally the worth of our strength.
We’re constructing that strength at home. Since my government took office, we now have cut taxes on incomes, on capital gains and business investment. We have now removed all federal barriers to interprovincial trade. We’re fast tracking $1 trillion of investments in energy, AI, critical minerals, latest trade corridors and beyond. We’re doubling our defence spending by the top of this decade, and we’re doing so in ways in which construct our domestic industries. And we’re rapidly diversifying abroad.
We’ve agreed to a comprehensive strategic partnership with the EU, including joining SAFE, the European defence procurement arrangements. We have now signed 12 other trade and security deals on 4 continents in six months.
Previously few days, we’ve concluded latest strategic partnerships with China and Qatar. We’re negotiating free trade pacts with India, ASEAN, Thailand, Philippines and Mercosur.
We’re doing something else: to assist solve global problems, we’re pursuing variable geometry. In other words, different coalitions for various issues based on common values and interests. So on Ukraine, we’re a core member of the Coalition of the Willing and considered one of the biggest per capita contributors to its defence and security.
On Arctic sovereignty, we stand firmly with Greenland and Denmark and fully support their unique right to find out Greenland’s future.
Our commitment to NATO’s Article 5 is unwavering, so we’re working with our NATO allies, including the Nordic-Baltic Eight, to further secure the alliance’s northern and western flanks, including through Canada’s unprecedented investments in over-the-horizon radar, in submarines, in aircraft, and boots on the bottom — boots on the ice.
Canada strongly opposes tariffs over Greenland and calls for focused talks to realize our shared objectives of security and prosperity within the Arctic.
On plurilateral trade, we’re championing efforts to construct a bridge between the Trans-Pacific partnership and the European Union, which might create a brand new trading bloc of 1.5 billion people on critical minerals.
We’re forming buyer’s clubs anchored within the G7 so the world can diversify away from concentrated supply. And on AI, we’re cooperating with like-minded democracies to be certain that we won’t ultimately be forced to choose from hegemons and hyperscalers.
This shouldn’t be naïve multilateralism, neither is it counting on their institutions. It’s constructing coalitions that work issue by issue with partners who share enough common ground to act together. In some cases, this will probably be the overwhelming majority of countries. What it’s doing is making a dense web of connections across trade, investment, culture on which we will draw for future challenges and opportunities.
Our view is the center powers must act together because if we’re not on the table, we’re on the menu.
But I’d also say that great powers can afford, for now, to go it alone. They’ve the market size, the military capability, and the leverage to dictate terms. Middle powers don’t. But once we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what’s offered. We compete with one another to be probably the most accommodating.
This shouldn’t be sovereignty. It’s the performance of sovereignty while accepting subordination.
In a world of great power rivalry, the countries in-between have a alternative: compete with one another for favour, or mix to create a 3rd path with impact. We shouldn’t allow the rise of hard power to blind us to the indisputable fact that the facility of legitimacy, integrity, and rules will remain strong if we decide to wield it together.
Which brings me back to Havel. What does it mean for middle powers to live the reality?
First, it means naming reality. Stop invoking rules-based international order as if it still functions as advertised. Call it what it’s: a system of intensifying great power rivalry where probably the most powerful pursue their interests using economic integration as coercion.
It means acting consistently, applying the identical standards to allies and rivals. When middle powers criticize economic intimidation from one direction but stay silent when it comes from one other, we’re keeping the sign up the window.
It means constructing what we claim to consider in, reasonably than waiting for the old order to be restored. It means creating institutions and agreements that function as described, and it means reducing the leverage that allows coercion.
That’s constructing a robust domestic economy. It ought to be every government’s immediate priority.
And diversification internationally shouldn’t be just economic prudence; it’s a fabric foundation for honest foreign policy, because countries earn the best to principled stands by reducing their vulnerability to retaliation.
So, Canada. Canada has what the world wants. We’re an energy superpower. We hold vast reserves of critical minerals. We have now probably the most educated population on this planet. Our pension funds are amongst the world’s largest and most sophisticated investors. In other words, we now have capital talent. We even have a government with immense fiscal capability to act decisively. And we now have the values to which many others aspire.
Canada is a pluralistic society that works. Our public square is loud, diverse and free. Canadians remain committed to sustainability. We’re a stable and reliable partner in a world that’s anything but, a partner that builds and values relationships for the long run.
And we now have something else: we now have a recognition of what’s happening and determination to act accordingly. We understand that this rupture calls for greater than adaptation. It calls for honesty concerning the world because it is.
We’re taking an indication out of the window.
We all know the old order shouldn’t be coming back. We shouldn’t mourn it. Nostalgia shouldn’t be a method, but we consider that from the fracture we will construct something larger, higher, stronger, more just. That is the duty of the center powers, the countries which have probably the most to lose from a world of fortresses and probably the most to realize from real cooperation.
The powerful have their power. But we now have something too: the capability to stop pretending, to call realities, to construct our strength at home, and to act together.
That’s Canada’s path. We elect it openly and confidently, and it’s a path wide open to any country willing to take it with us.
Thanks very much.