Following on Part 1, this section extends the discussion of disrupting factors to explore what could be key changes and how Canada might respond to a new global order. For Part 1 of this post, click here.
Canadian public policy could constructively support further enhancements to the G20: a broader mandate and more inclusive membership, as well as a more collegial relationship with the UN.
The countries of the South, at least the leading members, are now setting their own global policy agendas. The recent mini-summit of President Trump and China’s President Xi Jinping may be the first of many such discussions, but these are not meetings of minds; rather, they are vehicles for tough manoeuvring for power. So far it is Trump who is blinking first.
It remains unclear if China wants to take on the global leader role as the US slips away from automatic supremacy. The BRICS countries (Brazil, Russia, India, China, and South Africa), the G7’s mirror in the South, are creating new financial instruments that will match and compete with the IMF and the World Bank. Most visible of these is the new Asia Infrastructure Investment Bank (AIIB), with $100 billion in capital and a membership embracing most of the OECD and the G20; the US and Japan are now the only significant holdouts. Canada needs to be an active collaborator in these new partnerships. Unfortunately, we allowed ourselves to be bullied by the US into initially staying out of the AIIB. Now, belatedly, somewhat cap in hand, we have asked to join, ending up with a small junior member small voting share.
The BRICS group, having started out as a defence against an assertive G7, saw up close during the 2008–09 financial crisis the vulnerability of the West, in its inability to manage growth equitably and sustainably. The G20 is becoming the BRICS countries’ chosen vehicle for rebalancing global rules of finance and trade created over decades that privilege Western OECD/G7 interests. A G20 extension to issues of global security, climate change, and equity should be Canadian policy priorities.
For G7 countries, especially middle powers like Canada, the dilemma now is whether to hold on to familiar privileges or move to a more open approach. Its membership is dated and confronts rather than facilitates partnerships with emerging economies. Yet we need these new partnerships for political and commercial reasons. The North has largely kept its privileged voting shares in the IMF and World Bank, and then feigned surprise at the creation of several new BRICS clones. Canada could opt to be a leader in re-building these networks. Historically we have no colonial baggage, but all too often we now hesitate to be a bold international voice for change.
Another dimension with potential for major new conflicts, including some that can seriously affect Canada, is the stagnant leadership in world trade fora. To demonstrate his omnipotence and press his protectionist mindset, President Trump has already pulled the plug on the almost fully negotiated Trans-Pacific Partnership (TPP), a deal originally designed, in part, to exclude China from the benefits of freer trade. With the rug pulled from underneath them, the rump of TPP members may now fall into the hands of China, as it becomes the de facto leader on global trading arrangements, even on globalization. The US and its followers — including Canada, which joined late and missed influencing the negotiations — lost the opportunity to make an eventual TPP more inclusive, more sensitive to the needs of poorer developing countries and less favourable to the multinationals.
Clearly a multitude of public policy challenges face Canada and many of its middle-tier OECD peers in the coming decades. Do we move with a tide of change, supporting an approach that engages the Global South as an increasingly viable, indeed attractive partner in political, investment, and trade ventures? For now, Canada seems to favour more conservative policy options. We will favour buying a few dozen jet fighters from the US, ready for a hypothetical nuclear war with Russia or China…. and then let aid flows stagnate. We are chasing a Security Council seat but overlooking the immediate need to strengthen our relations with the voting majority of UN countries, which are in the Global South.
Canada should advance a different set of interests: we should be peace builders, rather than bomb droppers. We should listen more rather than know the answers. We should support inclusive approaches, not hold on to shaky privilege. We gain from global systems and should favour multilateral approaches. We should avoid playing the bully, like a junior Trump, in developing ties with the Global South.
We still have a decade or two to get it right, but we have to change our public policy mindset now, perhaps taking advantage of the confusion, even conflict, our southern neighbour is creating in the global arena. Sooner, rather than too late, we need to create new partnerships of our own with key nations of the Global South. Today’s uncertainty should make it clearer than ever why we need to move beyond a global perspective largely shaped by relations with the US and EU.
This article was first published by Policy Options on 1 May 2017.