Mark Carney warns of new era of strategic trade rivalry and plurilateral alliances

In Davos, Mark Carney highlighted a shift from multilateral accords to tailored, interest-led trade coalitions amid rising geopolitical tensions, urging middle powers to forge alliances that balance cooperation with strategic independence.

In Davos, Mark Carney argued that global trade is undergoing “a rupture, not a transition,” asserting that major powers now deploy tariffs, financial levers and supply chains as instruments of strategic competition. “...

;The old order is not coming back,” he told delegates, urging so‑called “middle powers” to form cooperative arrangements that avoid binary alignment with rival hegemons.

According to the Global Training Center report, Carney’s prescription pivots away from universal, multilateral accords toward more tailored, plurilateral frameworks, smaller, interest‑led coalitions of like‑minded economies that can keep markets open even as great‑power rivalry hardens. He has also advocated for G7‑style “buyer clubs” for critical minerals to diversify sourcing and reduce exposure to single suppliers or currency zones, a measure framed as both economic policy and strategic insurance.

Since taking office, Carney has pushed a rapid diplomatic and commercial agenda. Ottawa has negotiated or advanced a dozen trade and security arrangements across four continents, including a comprehensive strategic partnership with the European Union, and new or upgraded ties with China, Qatar, Ecuador, Indonesia and the United Arab Emirates. The government is pursuing further pacts with India, ASEAN members, the Philippines, Thailand, Mercosur and Saudi Arabia as part of an explicit objective to double non‑U.S. exports within a decade. A recently announced agreement‑in‑principle with Beijing aims to ease barriers on agri‑food, forest products, seafood and clean‑technology goods, which officials say could unlock nearly $3 billion in additional orders and raise Canada’s sales to China by about 50% by 2030.

That diversification drive, however, runs up against entrenched economic patterns. Export Development Canada estimates that roughly 70% of Canadian exports still go to the United States and that around 90% of Canadian crude oil continues to flow south. EDC calculates that trimming U.S. reliance by a single ten percentage points would require Canada to approximately double shipments to other major markets such as China, Germany, Mexico, Italy and India, or to identify equivalent outlets.

Economists warn that leaning heavily on China to meet those ambitions brings distinct risks, including an influx of manufactured imports that could undercut domestic producers and the attendant political leverage a dominant supplier can exercise. Trade lawyers cautioned that “rapid integration with China” could leave local industries vulnerable unless robust safeguards and investment‑screening mechanisms are put in place.

For firms and trade practitioners, Carney’s approach signals three practical shifts. First, the growth of overlapping trade blocs is likely to create a dense mosaic of agreements, Carney talks of trying to “build a bridge between the Trans‑Pacific Partnership and the EU”, that could encompass some 1.5 billion consumers and develop its own technical standards, digital rules and dispute procedures. Second, more bilateral and plurilateral deals will expand commercial choices while multiplying compliance burdens: businesses will face additional rules of origin, varied tariff treatments and divergent regulatory regimes to monitor. Third, mid‑sized economies are positioning themselves as geoeconomic intermediaries; companies that use Canada as a hub into both Atlantic and Pacific markets may gain resilience, but only by actively managing political shifts and contingency plans.

According to the report by ConsumerConnectNG, this evolving architecture moves trade policy away from a U.S.‑centric model toward a contested, multi‑hub system. For exporters, investors and counsel, understanding how new Canada‑plus‑X arrangements interact with existing U.S. tariffs, sanctions and screening tools will be essential to both risk management and seizing new market opportunities over the coming decade.

Carney frames these moves as pragmatic hedging: in an era when economic instruments are being wielded as strategic weapons, smaller coalitions and targeted procurement alliances may be the most realistic way to preserve open commerce without forcing nations into polarised camps. Whether that vision produces greater stability or simply a more complicated map of trade dependencies will depend on how quickly rules and institutions adapt, and on the care with which governments balance diversification against new vulnerabilities.

Source: Noah Wire Services