Canadian Prime Minister's Davos Speech: The Old Order Is Dead, Middle Power Countries Should Stop "Living in Lies"

Source: Phoenix News

Canadian Prime Minister Mark Carney delivered a strongly worded speech at the World Economic Forum in Davos, Switzerland, on Tuesday, issuing a heavy judgment: “The old order will not return.” He stated that the long-standing rule-based international order led by the United States has ended, and middle-power countries like Canada must change their strategies to avoid becoming victims of further coercion by powerful forces.

Carney did not directly name U.S. President Trump but mentioned “American hegemony” and said that major powers are using economic integration as a “weapon.” He called on middle powers to stop “pretending that rules are still effective” and to seek genuine strategic autonomy through joint action.

Below is the translation of Phoenix News’s “World Affairs” segment (with edits):

We seem to be reminded every day: we are living in an era of great power competition—the so-called “rules-based order” is fading, and the strong can do as they please, while the weak can only bear the consequences.

Thucydides’ famous dictum is presented as an unavoidable reality, as if it is a natural logic of international relations reemerging. In the face of this logic, countries tend to go with the flow, accommodate each other, avoid trouble, and hope that compliance will bring security.

But this is not the case. So, what are our options?

In 1978, Czech politician Václav Havel wrote an article mentioning a story about a vegetable vendor.

Every morning, this shopkeeper would place a sign with a symbolic slogan in his window. He didn’t believe the message. But he still put the sign out to avoid trouble, show compliance, and maintain peace. Because every shopkeeper on the street did the same, this system persisted—not only relying on violence but also on ordinary people participating in rituals they privately knew were false.

Havel called this state “living in lies.” The power of the system does not come from its truthfulness but from everyone’s willingness to pretend it is real. Its fragility also stems from this: as soon as even one person stops performing, as soon as the vegetable vendor removes the sign from the window, the illusion begins to crack.

Friends, now is the time for enterprises and nations to take down these signs.

For decades, countries like Canada have prospered under what we call the “rules-based international order.” We joined these institutions, praised their principles, and benefited from their predictability. Because of this, we could pursue value-based diplomacy under their protection.

We also understand that the story of this so-called international rules-based order is somewhat fictional: the most powerful countries will excuse themselves when convenient, trade rules are enforced asymmetrically, and the application of international law depends on the identity of the defendant or victim.

This fiction was once useful. Especially U.S. hegemony, which helped provide public goods—open maritime routes, stable financial systems, collective security, and dispute resolution frameworks.

Therefore, we placed the sign in the window. We participated in these rituals and largely avoided pointing out the cracks between words and reality.

But this arrangement no longer works.

Let me be blunt: we are in a rupture, not a transition.

Over the past twenty years, crises in finance, public health, energy, and geopolitics have exposed the risks of high global integration. Recently, major powers have begun turning economic integration into a weapon—using tariffs as leverage, financial infrastructure as coercion tools, and supply chains as vulnerable points that can be exploited.

When integration itself becomes the source of your subjugation, you can no longer live in the illusion of “mutually beneficial” cooperation.

Multilateral institutions that middle powers rely on—such as the WTO, the United Nations, climate frameworks, and the entire collective problem-solving system—are under threat. As a result, many countries have reached the same conclusion: they must develop greater strategic autonomy in energy, food, critical minerals, finance, and supply chains. This impulse is understandable.

A country that cannot feed itself, supply its energy, or defend itself has very limited options. When rules no longer protect you, you must protect yourself.

But we must be clear about where this path leads. A fortress-filled world will be poorer, more fragile, and less sustainable.

Another fact is: if major powers abandon even the appearance of rules and values, and pursue only unconstrained power and interests, the benefits of transactional diplomacy will become increasingly difficult to replicate.

Hegemonic countries cannot continuously monetize relationships. Allies will diversify to hedge uncertainty, buy “insurance,” increase options, and rebuild sovereignty—sovereignty once built on rules, now increasingly dependent on resilience against pressure.

Everyone here understands that this is classic risk management. Risk management has costs, but the costs of strategic autonomy and sovereignty can be borne. Collective investment in resilience is much cheaper than building fortresses alone. Common standards can reduce fragmentation, and complementarities can generate positive-sum effects.

For middle powers like Canada, the question is not whether to adapt to this new reality—we must.

The question is whether we will merely build higher walls or do something more ambitious.

Canada was among the first to sound this alarm, prompting us to fundamentally adjust our strategic posture. Canadians understand that our past comfortable assumptions—that geography and alliance membership automatically bring prosperity and security—are no longer valid. Our new path is based on what Finnish President Sauli Niinistö calls “value-based realism.”

In other words, we uphold principles while also being pragmatic. In principle, we firmly defend fundamental values, sovereignty, and territorial integrity, adhere to the prohibition of the use of force unless in accordance with the UN Charter, and respect human rights.

Practically, we also recognize that progress is often incremental, interests diverge, and not all partners share our full set of values.

Therefore, we participate in world affairs with clear-eyed, broad, and strategic engagement. We face the real world proactively rather than waiting for an ideal world to arrive.

We are calibrating our relationships so that their depth reflects our values, while maximizing our influence in today’s fluid and risky environment.

We no longer rely solely on the power of values but also on the value of power itself.

We are building this strength domestically. Since this government took office, we have cut personal income taxes, capital gains taxes, and corporate investment taxes; eliminated all federal interprovincial trade barriers; accelerated investments totaling one trillion dollars in energy, artificial intelligence, critical minerals, new trade routes, and more. We plan to double defense spending by the end of this decade, advancing this process with the goal of strengthening our domestic industries. At the same time, we are rapidly diversifying externally.

We have established a comprehensive strategic partnership with the European Union, including joining the European Defense Procurement Mechanism SAFE, and within six months, signed 12 trade and security agreements across four continents.

In recent days, we have also formed new strategic partnerships with China and Qatar, and are negotiating free trade agreements with India, ASEAN, Thailand, the Philippines, and the Southern Common Market.

We are also doing something else: to address global issues, we are promoting a “variable geometry” approach—building different alliances on various issues based on shared values and interests. Regarding Ukraine, we are a core member of the “volunteer alliance” and one of the countries with the highest per capita defense and security investments.

On Arctic sovereignty, we stand firmly with Greenland and Denmark, fully supporting their decisions regarding Greenland’s future rights.

Our commitment to NATO Article 5 remains unwavering, and we are working with NATO allies—including the “Nordic-Baltic Eight”—to strengthen security on the northern and western flanks of the alliance, including unprecedented investments in over-the-horizon radar, submarines, aircraft, and ground forces—ice-capable units.

Canada strongly opposes tariffs related to Greenland issues and calls for targeted dialogue to achieve our shared security and prosperity goals in the Arctic.

In multilateral trade, we are pushing to build bridges between the CPTPP and the EU, creating a new trade bloc covering 1.5 billion people centered on critical minerals.

We are establishing a “buyers’ club” based on the G7 to help the world reduce dependence on highly concentrated supply chains. In AI, we are working with like-minded democracies to ensure that we are ultimately not forced to choose between hegemonic powers and mega-platforms.

This is not naive multilateralism nor purely relying on existing institutions, but rather building feasible alliances on specific issues with partners who share enough common ground. In some cases, this will encompass the vast majority of countries worldwide. The goal is to build an extensive network of connections in trade, investment, and culture to meet future challenges and opportunities.

Our view is that middle powers must act together because if we are not at the negotiating table, we will be on the menu.

I also want to say that major powers still have the capacity to go it alone. They have market size, military capability, and leverage for pressure, which middle powers lack. But when we only negotiate bilaterally with hegemonic countries, we are negotiating from a position of weakness, accepting everything offered, and competing with each other to be more compliant.

This is not sovereignty but performing sovereignty while accepting subjugation.

In a world of great power competition, middle countries face a choice: compete for favor or unite to forge a third way with real influence. We should not let the rise of hard power blind us to the importance of legitimacy, integrity, and rules—if we choose to wield them together, they remain powerful.

This brings me back to Havel. What does “living in truth” mean for middle powers?

First, it means facing reality. No longer pretending that the “rules-based international order” still functions as propaganda suggests, but honestly acknowledging: it is a system of escalating great power competition, where the strongest use economic integration to coerce and pursue their interests.

It means acting consistently, applying the same standards to allies and adversaries. When middle powers criticize economic coercion from one direction but remain silent on another, we still hang the sign in the window.

It means building what we claim to believe in, rather than waiting for the old order to return. It means establishing truly functioning institutions and agreements, reducing the leverage that makes coercion possible.

It means building a strong domestic economy—something every government should prioritize.

And international diversification is not only prudent economically but also the material basis of honest diplomacy. A country that reduces its vulnerability to retaliation is more qualified to stand firm on principles.

So, Canada. Canada has what the world needs. We are energy superpowers, with vast reserves of critical minerals, the most educated population globally, and one of the largest and most mature pension funds as investors. In other words, we have capital and talent. We also have a government with enormous fiscal capacity capable of decisive action, and values that many countries aspire to.

Canada is a well-functioning, diverse society. Our public space is lively, diverse, and free. Canadians remain committed to sustainable development. We are a stable and reliable partner in an extremely unstable world, one that values and invests in long-term relationships.

Another point: we understand what is happening and are determined to act accordingly. We realize that this rupture requires not only adaptation but honesty about the real world.

We are taking the signs out of the window.

We know that the old order will not return, and we should not mourn it. Nostalgia is not a strategy. But we believe that from this rupture, we can build a larger, better, stronger, and more just order. This is the task of middle powers—those countries that have lost the most in a fortressed world but stand to gain the most from genuine cooperation.

The strong have their power. But we also have our own strength: the ability to stop pretending, face reality, build domestic strength, and act together.

This is the path Canada has chosen. We walk this path openly and confidently, and we welcome any country willing to join us.