The world is experiencing a rupture in the established world order, moving from a "present fiction" of a rules-based system to a "harsh reality" of unconstrained great power geopolitics. Middle powers like Canada, however, are not powerless and can actively shape a new order based on their values.
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I'm I'm going to start in uh French and
then I'll switch back to English. Uh me Larry.
Larry.
>> Thank you, Larry.
>> It is both a pleasure and a duty
to be with you tonight
in this pivotal moment that Canada and
the world going through.
Today I will talk about a rupture in the
world order.
The end of a present fiction and the
beginning of a harsh reality where
geopolitics where the large main power
geopolitics is submitted to no limits,
no constraints.
On the other hand, I would like to uh
tell you that the other countries,
especially intermediate powers like
Canada, are not powerless.
They have the capacity to build a new
order that encompasses our values
such as respect for human rights,
sustainable development, solidarity, sovereignty,
sovereignty,
and territorial integrity of the various states.
states.
The power of the less power
>> starts with honesty.
>> It seems that every day 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
can and the weak must suffer what they
must. And this apherimism of Thusidities
is presented as inevitable as the
natural logic of international relations
reasserting itself.
And faced with this logic,
there is a strong tendency for countries
to go along to get along, to accommodate,
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 Vaslav
Havl, later president,
wrote an essay called the power of the
powerless. And in it, he asked a simple
question. How did the communist system
sustain itself?
And his answer began with a green
grosser. Every morning, the shopkeeper
places a sign in his window. Workers of
the world unite. He doesn't believe it.
No one does. But he places the sign
anyway to avoid trouble, to signal
compliance, to get along. And because
every shopkeeper on every street does
the same, the system persists.
Not through violence alone, but through
the participation of ordinary people in
rituals they privately know to be false.
Havl called this living within 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 same
source. When even one person stops
performing, when the green grosser
removes his sign, the illusion begins to crack.
crack.
Friends, it is time for companies and
countries to take their signs down.
for decades, countries like Canada
prospered under what we called the
rules-based international order. We
joined its institutions. We praised its
principles. We benefited from its predictability.
predictability.
And because of that, we could pursue
values-based foreign policies under its protection.
protection.
We knew the story of the international
rulesbased order was partially false.
That the strongest would exempt
themselves when convenient. That trade
rules were enforced s asymmetrically.
And we knew that international law
applied with varying rigor depending on
the identity of the accused or the victim.
victim.
This fiction was useful and American
hegemony in particular helped provide
public goods. open sea lanes, a stable
financial system, collective security
and support for frameworks for resolving disputes.
disputes.
So we placed the sign in the window. We
participated in the rituals and we
largely avoided calling out the gaps
between rhetoric and reality.
This bargain no longer works. Let me be
direct. We are in the midst of a
rupture, not a transition.
Over the past two decades, a series of
crises in finance, health, energy, and
geopolitics have laid bare the risks of
extreme 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 cannot live within the lie of mutual
benefit through integration. When
integration becomes the source of your subordination,
the multilateral institutions on which
the middle powers have relied, the WTO,
the UN, the COP, the architecture, the
very architecture of collective problem
solving are under threat.
And as a result, many countries are
drawing the same conclusions that they
must develop greater strategic autonomy
in energy, food, critical minerals, in
finance and supply chains. And this
impulse is understandable. A country
that can't feed itself, fuel itself, or
defend itself has few options. When the
rules no longer protect you, you must
protect yourself.
But let's be cleareyed about where this leads.
leads.
A world of fortresses will be poorer,
more fragile, and less sustainable.
And there's another 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 become harder to replicate.
Hegeimons cannot continually monetize
their relationships.
Allies will diversify to hedge against uncertainty.
uncertainty.
They'll buy insurance, increase options
in order to rebuild sovereignty.
Sovereignty that was once grounded in
rules, but will increasingly be anchored
in the ability to withstand pressure.
This room knows this is classic risk
management. Risk management comes at a price.
price.
But that cost of strategic autonomy of
sovereignty can also be shared.
Collective investments in resilience are
cheaper than everyone building their own fortresses.
fortresses.
Shared standards reduce fragmentations.
Complimentarities are positive some. And
the question for middle powers like
Canada is not whether to adapt to the
new reality. We must. The question is
whether we adapt by simply building
higher walls or whether we can do
Now, Canada was amongst the first to
hear the wakeup call leading us to
fundamentally shift our strategic posture.
posture.
Canadians know that our old comfortable
assumptions that our geography and
alliance memberships automatically
conferred prosperity and security,
that assumption is no longer valid.
And our new approach rests on what
Alexander Stub, the president of
Finland, has termed valuebased realism.
Or to put another way, we aim to be both
principled and pragmatic.
Principled in our commitment to
fundamental values, sovereignty,
territorial integrity, the prohibition
of the use of force except when
consistent with the UN charter, and
respect for human rights. and pragmatic
in recognizing that progress is often
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 take on the world as it is, not
wait around for a world we wish to be.
We are calibrating our relationships so
their depth reflects our values. And
we're prioritizing broad engagement to
maximize our influence. GI and given the
fluidity of the world at the moment, the
risks that this poses and the stakes for
what comes next.
And we are no longer just relying on the
strength of our values, but also the
value of our strength.
We are building that strength at home.
Since my government took office, we have
cut taxes on incomes, on capital gains,
and business investment. We have removed
all federal barriers to interprovincial
trade. We are fasttracking a trillion
dollars of investments in energy, AI,
critical minerals, new trade corridors,
and beyond. We're doubling our defense
spending by the end of this decade, and
we're doing so in ways that build our
domestic industries.
And we are rapidly diversifying abroad.
We've agreed a comprehensive strategic
partnership with the EU, including
joining SAFE, the European defense
procurement arrangements. We have signed
12 other trade and security deals on
four continents in six months. In the
past few days, we've concluded new
strategic partnerships with China and
Qatar. We're negotiating free trade
packs with India, ASEAN, Thailand,
Philippines, and Merkasur.
We're doing something else. To help
solve global problems, we're pursuing
variable geometry. In other words,
different coalitions for different
issues based on common values and
interests. So on Ukraine, we're a core
member of the coalition of the willing
and one of the largest per capita
contributors to its defense and security.
security.
on Arctic's sovereignty. We stand firmly
with Greenland and Denmark and fully
support their unique right to determine
Greenland's future. [applause]
[applause]
Our commitment to NATO's Article 5 is unwavering.
unwavering.
So, we're working with our NATO allies,
including the Nordic Baltic Gate, 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 ground,
boots on the ice.
Canada strongly opposes tariffs over
Greenland and calls for focused talks to
achieve our shared objectives of
security and prosperity in the Arctic.
On plurilateral trade, we're championing
efforts to build a bridge between the
Trans-Pacific Partnership in the
European Union, which would create a new
trading block of 1.5 billion people. On
critical minerals, we're forming buyers
clubs anchored in the G7 so that the
world can diversify away from
concentrated supply. And on AI, we're
cooperating with like-minded democracies
to ensure that we won't ultimately be
forced to choose between hegeimons and hyperscalers.
hyperscalers.
This is not naive multilateralism,
nor is it relying on
their institutions. It's building
coalitions that work issues by issue
with partners who share enough common
ground to act together.
In some cases, this will be the vast
majority of nations. What it's doing is
creating a dense web of connections
across trade investment culture on which
we can draw for future challenges and opportunities.
argue the middle powers must act
together because if we're not at the
But I'd also say that great powers,
great powers can afford for now to go it
alone. They have the market size, the
military capacity, and the leverage to
dictate terms. Middle powers do not. But
when we only negotiate bilaterally with
a hedgeimon, we negotiate from weakness.
We accept what's offered. We compete
with each other to be the most accommodating.
accommodating.
This is not sovereignty. It's the
performance of sovereignty while
In a world of great power rivalry, the
countries in between have a choice.
Compete with each other for favor or to
combine to create a third path with impact.
impact.
We shouldn't allow the rise of hard
power to blind us to the fact that the
power of legitimacy, integrity, and
rules will remain strong if we choose to
wield them together,
which brings me back to Havl.
What does it mean for middle powers to
live the truth? Well, first, it means
naming reality. Stop invoking
rules-based international order as
though it still functions as advertised.
Call it what it is, a system of
intensifying great power rivalry where
the most powerful pursue their interests
using economic integration as coercion.
It means acting consistently applying
the same standards to allies and rivals.
When middle powers criticize economic
intimidation from one direction but stay
silent when it comes from another, we
are keeping the sign in the window.
It means building what we claim to
believe in
rather 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
enables coercion. That's building a
strong domestic economy. should be every
government's immediate priority.
And diversification internationally is
not just economic prudence. It's a
material foundation for honest foreign
policy because countries earn the right
to principled stands by reducing their
vulnerability to retaliation.
has what the world wants. We are an
energy superpower. We hold vast reserves
of critical minerals. We have the most
educated population in the world. Our
pension funds are amongst the world's
largest and most sophisticated
investors. In other words, we have
capital, talent. We also have a
government with immense fiscal capacity
to act decisively.
And we 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 are a stable and reliable partner in
a world that is anything but. A partner
that builds and values relationships for
the long term.
And we have something else. We have a
recognition of what's happening and a
determination to act accordingly. We
understand that this rupture calls for
more than adaptation. It calls for
honesty about the world as it is. We are
taking the sign out of the window. We
know the old order is not coming back.
We shouldn't mourn it. Nostalgia is not
a strategy.
But we believe that from the fracture,
we can build something bigger, better,
stronger, more just. This is the task of
the middle powers, the countries that
have the most to lose from a world of
fortresses and a most to gain from
genuine cooperation.
The powerful have their power,
but we have something too. The capacity
to stop pretending, to name reality, to
build our strength at home, and to act
together. That is Canada's path. We
choose it openly and confidently, and it
is a path wide open to any country
willing to take it with us. Thank you
>> Well, thank you, Prime Minister. Um, I
don't think I've seen many standing
ovations at Davos, so uh that was that
was interesting. Um, you said there was
a phrase in your speech where you said
sovereignty now is the ability to
withstand pressure.
>> Isn't Canada almost uniquely vulnerable
to pressure because of the extent of
your trade dependence on the United States?
States? >> Well,
>> Well,
the the proof is that we have been uh
able to withstand the pressure and there
has been considerable pressure. Uh I'll
give you a couple of facts. We've
actually created more jobs in uh since
the tariffs were put on than the United
States in absolute number. Uh economy is
growing at the second fastest rate
within the G7. Uh that's not there.
There are pockets of extreme pressure
without question in Canada. Uh but
headline we're reacting. The second
thing and it's a fundamental point is
the recognition that we can give
ourselves far more than any foreign
country can take away. Uh there's lots
of efficiencies in having one Canadian
market. the trillion dollars of domestic
investment and building these
partnerships abroad. Uh all of which are
bigger returns than what's been lost.
That's not to say we would rather not
lose it, but we can withstand the
pressure and we are.
>> And I was interested that you said
basically the old world's not coming
back. So you're not seeing this as a
period where you just have to get
through and normaly will return.
>> I think the
that is what that is our view. Um, and
we we regret it, but we're not going to
sit around and and and mourn it. We're
we're we're acting um and we're acting
in a way both that's in our interests,
but we believe in a way with others
that's building imperfectly in steps a
new system. I'll give you one example
and handback, which is um we're members
of we are members of trade agreements
that comprise already 1.4 billion people
around the world. So we have the most
extensive network. We are trying with
others to bring some of those networks
together. The most prominent example is
the Trans-Pacific Partnership in the EU
acting of a bridge. It's it's not a
direct benefit for Canada, but it is a
benefit for Canada that these groups
come together uh and go is here
consistent with the WTO rules, both of
which are and in that way we're building
back out amongst willing partners.
And you talked about uh the need not to
put the sign in the window anymore to to
pretend that things are still the same.
Do you think to put it directly that the
NATO alliance is still doing that? Still
pretending it's the old transatlantic
partnership when it's really kind of going
going
>> well. Uh I think clearly NATO is
experiencing a test right now. uh and
the first response to that test has to
be to respond in a way that ensures the
the security of the Arctic in a robust
way for uh for all possibilities. This
is actually a point that we have been
making in recent years. It's a point
that I made at the NATO summit uh back
in June which seemed like a pledging
summit but also was a uh uh was to get
NATO policies in the right direction. So
I think in the immediate term one of the
imperatives is to reinforce things that
Canada is doing, Nordic Baltic 8 are
doing, uh the UK are doing, other NATO
partners, France included, in a
comprehensive way that pro provides much
greater security uh in the Arctic.
That's this is the test. And so I
wouldn't say the sign the NATO sign
stays in the window, but we've got to
meet the uh meet the moment of that. You
also a big theme of your speech was the
need for middle powers to work together,
but you've just been to the other great
power to China and I think people very
intrigued by seeing that meeting and
some people say kind of that's a mistake
really because you know you're going to
make make yourself more dependent on
China. They're not that benign either.
Um the US will be very annoyed. What's
what's the defense of what you're doing
and what do you hope to get out of it?
Uh well the the first thing is to say
it's not a defense. It's it's an I know
the way you frame the question but it's
offense. Um it's building out it's it's
something positive as opposed to um
against. We're for something as opposed
to being against. The second is
there are very clear guard rails in that
relationship. I spoke of calibration of
relationships in my remarks. That's what
I mean by it. Um but within those clear
guard rails are huge opportunities in
energy both clean and conventional. uh
obviously in motor vehicles, in
agriculture, in financial services, all
of which is mutually beneficial. So it's
it's additive and I look it's the second
largest economy and it's our second
largest trading partner. We should have
a strategic partnership with them uh in
that uh in within those guardrails and
that's what we've achieved. And it is an
interesting reversal though because I
think certainly during the Biden
administration there was this sense that
the western world was trying to decouple
from China or de-risk at least. Yeah.
>> And is now in this new world that really
going to go into reverse and de-risking
from China because there are other risks
is is less of a a thing.
>> You need again many in this room this is
their livelihood. You need a web of
connections. Um and to miss out in that
web some of the largest ones, United
States, we already have that. Uh China,
India, Merkasaur, European Union, that's
a mistake. That's not managing your
relationships properly. That makes you
stronger, makes you more resilient. And
then on top of that, I'll give you again
I'll appeal since it's in the headlines
to the Nordics. Uh Nordics plus Canada,
it's 20% of global GDP. It's not the
first thing people would realize, but
that relationship which is deepening for
security reasons because we're
like-minded, those are the types of
partnerships that I think we'll see more of.
of.
>> And you got a round of applause when you
said something strong about standing on
principle on Greenland.
>> Do you think uh we can find an offramp
on that? I mean, I'm sure you you'll
speak of it, but put it this way, if
there isn't an offramp, where does this
go? Uh I I strongly believe that uh
there is a better there's a better
outcome that come from the discussions
that have been catalyzed in a unusual
way admittedly but uh uh and we
absolutely stand by uh the principles
that I that I referenced. Um that
solution starts with security and a
security yes of Greenland but more
broadly of the Arctic. Uh Canada is four
square uh contributing to that. uh we're
at the start of a major ramp up above
and beyond. So we'll be a major uh
contributor to that. NATO has to deliver
on that. We're working intensively in
order to do it as well. Uh prosperity
for the people of Greenland. Uh let's in
the end it comes back uh to the people
there and there are opportunities to do
that in ways that would strengthen uh
all of the alliance.
>> And when President Trump says, oh, you
know, Greenland's under threat from
Russia, even from China, is that for real?
Uh I would say that there are there are
threat Russia is without question a
threat in the Arctic without question.
Russia does lots of horrible things. Uh
and I'll take the opportunity to uh to
condemn their unjustified and uh
horrific uh assault on Ukraine uh almost
at its fourth year. Uh they are a real
threat uh in the Arctic. uh one against
we need to protect which is why we have 364
364
fiveday air sea and land presence. It's
why we're uh adding to our submarine
fleet, adding to our uh air fighter uh
fleet. Uh why we're building out over
the horizon radar to protect from
Russian uh missile threats and others uh
and why we will work with our NATO NATO partners.
partners.
the threat is more perspective than
actual at this stage in terms of actual
activity uh in the Arctic and we intend
to uh to keep it that way.
>> Another big issue that's going to come
up this week uh is this board of peace
uh that President Trump is keen on. Uh
I'm not sure whether it's for Gaza or
for the entire world, but apparently
Canada's been invited. Are you going to join?
join?
>> Uh we have been invited. Um and uh let
me start by uh I I think we should
recognize the progress that has been
made um in at least uh getting to the
towards the end of the first phase of
this of this process and the activation
if I can put it that way of the process
to set up the board of peace is the
start of phase two. U our view is and
and that's to be welcomed and this is a
this is a a positive vehicle. Our view
is we need to work on the actual
structure of the vehicle. You just
referenced is it for Gaza? Well, the UN
uh resolution, security council
resolution 2803 references a border of
peace for Gaza. That's where we see it
becoming immediately operative and it
needs to be in our view it's better to
be designed in that way for the
immediate uh needs there. There are many
other needs around the world. First
point, second point. uh it needs to
coincide with the immediate full flow of
humanitarian aid into Gaza. We are still
not where we need to be. Conditions
still are horrific. Uh so that needs to
come alongside. We think there's aspects
of the governance and the
decision-making process that could be
improved. Uh but we will work uh with
others uh obviously work with the United
States um because we will do anything
that we can to improve the situation
horrific situation there and to move uh
onto a path to a two a true two-state solution.
solution.
>> There's a suggestion you can get
permanent membership of the board of
peace uh by pwning up a billion dollars.
Uh you you going to write a check for
that? uh we would write checks uh and
deliver in kind to uh improve uh the
welfare of the people of Palestine, but
we want to see it uh delivered direct uh
to those outcomes, those outcomes
promoting peace. Uh and so the mechanics
and how it how it works that way.
>> Okay, final question. Um
President Trump and a lot of people who
agree with him condemn globalism a lot.
Um, and I I suspect, you know, you you
would be the kind of epitome of a
globalist. You know, you worked for
Goldman Sachs. I believe you were a
central banker. Um, you know, you're
comfortable in lived in several
countries. Is globalism first of all, is
it a thing? And is it over? Um
Um
I think well look understanding how the
world works having an appreciation for
other cultures understanding the
connections and and being able to or at
least appreciating uh ways that how we
connect whether it's through technology,
trade, investment, culture, uh can
enrich our lives and that's a good thing
and also help solve problems. being
detached from where you live and the
broader needs of society. Uh
there is an epithet for that. I I I
don't know that the G-word is the one.
uh that certainly what we're finding to
go back to uh the points I was making is
that there are a number of like-minded countries
countries
that want to work through uh through
partnership uh to achieve those goals
for their citizens and for the world uh
more more broadly. The call is for more
to recognize
what's really going on right now and to
uh and to pull their resources to the
benefit of citizens. So it won't be
global. It won't cover the globe uh but
it will um be more [clears throat] powerful.
powerful.
>> Okay, Prime Minister, thank you very
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