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, and territorial integrity of the various 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 apherism 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, 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, this 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. Friends, it is time for companies and countries to take their signs down. For decades, 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.
And because of that, we could pursue values-based foreign policies under its 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. 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.
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.
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.
Hegeons cannot continually monetize their relationships. Allies will diversify to hedge against 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.
But that cost of strategic autonomy of sovereignty can also be shared. Collective investments in resilience are cheaper than everyone building their own fortresses. Shared standards reduce fragmentations.
Complimentarities are positive sum. 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 something more ambitious. Now Canada was amongst the first to hear the wakeup call leading us to fundamentally shift our strategic 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 given 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 fast-tracking 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.
on Arctic's sovereignty. We stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland's future. [Applause] Our commitment to NATO's Article 5 is 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.
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 that middle powers must act together because if we're not at the table, we're on the menu. 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. This is not sovereignty.
It's the performance of sovereignty while accepting subordination. 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.
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 Hav. 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. So Canada 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 very much.
[Applause] 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 dependency. 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 in 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 Eng Goi 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? 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'd 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 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 derisk 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. >> 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 will 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 this 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 u 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 5day 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 the threat is more prec 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?
>> 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 border 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 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 terrific situation there and to move uh onto a path to a two a true two-state solution.
>> There's a suggestion you can get permanent membership of the border 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 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 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 powerful.
>> Okay, Prime Minister, thank you very much indeed.
