Former Governor of the Bank of England Mark Carney recently expressed them. He brought to life the precarious place that middle powers like Canada and Australia occupy in today’s turbulent, rapidly shifting global economy. At a recent event, Carney spoke to the urgency for these countries to work together. He focused on the growing pressures they are under from bigger global powers, particularly the United States and China. His comments mirror the themes he announced last year in a clarion call during a much-lauded keynote address in Davos at the beginning of this year.
Carney’s wisdom comes at a time when Canada is in the midst of woefully undertaking its defense expenditures. Right now, about 70% of that budget is spent with U.S. firms. He highlighted how economic integration has “subordinated” countries like Canada and Australia to what he described as “predatory hegemons.” By encouraging these nations to mutually invest in new technologies, Carney created a blueprint for a more independent and less dangerous future.
A Call for Unity Among Middle Powers
During his address, Carney emphasized the importance of cooperation among middle powers, suggesting that countries like Canada and Australia have unique advantages that larger hegemons lack. He pointed out that the combined GDP of a coalition comprising Europe, Australia, Canada, Japan, and South Korea surpasses that of the United States. This diverse coalition not only has concentrated economic strength, as seen with the coasts’ wealth, but has trade flows and R&D spending.
“Middle powers have more power than many realise. Europe, Australia, Canada, Japan, South Korea: this coalition has a GDP larger than the United States, three times the trade flows of China (and) the largest research and development spend in the world.” – Mark Carney
Carney called on these countries to come together. He advocated for a “third path” that emphasizes the pursuit of legitimacy and trust ahead of competing for influence with major world powers. He insisted that ambiguity in international relationships is unacceptable. Countries must be able to unequivocally state where they will work together, and critically, where they won’t.
“Which is to be very clear about where we are looking to cooperate, and where we are not. I call it guardrails on the relationship.” – Mark Carney
Economic Integration and Strategic Vulnerabilities
Carney underscored a key point in each of his analyses. He stressed that Canada and Australia face grave strategic peril due to their economic dependencies on great powers. He described why this dependency would put their own national interests in jeopardy. He put a fine point on both countries’ responsibility to protect free trade and champion human rights.
He noted that Canada is indeed in the midst of a challenge with transnational repression. This problem is uniquely transatlantic and deeply related to cross-border security challenges. Neither is it true that for middle powers like Canada, it is not vital to address their vulnerabilities. They must continue to strengthen bilateral relations and collaborate on critical minerals, which are key to a clean technology future.
Carney’s forthcoming agreements with Australia on critical minerals may already provide that strong foundation. This reserve would be controlled by a small group of trusted, democratic countries.
“Countries like ours can compete with each for favour, or combine to create a third path with impact.” – Mark Carney
Navigating Relationships with Global Powers
Business leaders Carney’s remarks reflected on his experiences negotiating with powerful leaders like Donald Trump and Xi Jinping. He reflected on his very public feuds with Trump. He noted how their exchanges appeared fiery on the public stage, and yet Trump was surprisingly receptive to a give-and-take in the backroom dealings.
“(But) it’s quite different in private … he is more interested in your viewpoint on various things, in private.” – Mark Carney
Carney advised not being too deferential or “obsequious” in your interactions with the important people—but don’t be disrespectful! He stressed the need to couple tireless diplomatic engagement with an assertiveness that clearly protects our national interests.
“You don’t want to be ‘obsequious’ while still showing the President respect.” – Mark Carney
