Conrad Black: Carney’s failed diversification gambit
- Prime Minister Mark Carney’s efforts to reduce Canada’s economic and foreign policy dependence on the United States have largely failed, with the U.S. still dominating Canadian trade and diplomatic influence.
- China’s economic stagnation, demographic decline, and financial instability have diminished its appeal as an alternative partner to the U.S., weakening Canada’s pivot toward China.
- The global balance of power is shifting in favor of the United States, which has become a dominant energy producer, strengthened ties in Latin America and the Middle East, and gained strategic advantages over rivals like Russia and Iran.
- Canada must focus on revitalizing its economy by addressing internal issues such as national defense, constitutional unity, and economic policies, while maintaining pragmatic and less dependent relations with the rising power of the United States.
Prime Minister Mark Carney’s promise to lead Canada out of the economic and foreign policy shadow of the United States, and his bizarre Davos plan to lead a Thucydidean “middle power” revolt against Washington, has accomplished virtually nothing. Highly publicized overtures to China and western Europe are inconsequential. The United States still buys 68 per cent of our exports and provides 56 per cent of our imports.
The last refuge of the anti-Americans, China, which 10 years ago was supposedly about to pass the United States as the world’s greatest economy, is stagnating. China’s rate of growth is minimal. Artificial intelligence is producing a modest lift but China is receiving a small fraction of the annual AI investment of the United States. It is not achieving productivity levels that can make up for the sharply declining Chinese population, a consequence of the former leadership’s one-child policy. The Chinese population is expected to be cut in half by the end of this century. A giant real estate bubble has burst and the People’s Republic has responded with a heavy-handed regulatory crackdown, which saw billions in capital fleeing China and its financial markets, US$425 billion (C$597 billion) last year alone, according to writer and investor Ruchir Sharma.
Canada quickly redressed Trump’s only legitimate grievance against us — our free-loading neglect of our national defence. If oil exported to the U.S. at knockdown prices and sold on by it at a profit is deducted from the total, there really is no U.S. trade deficit with us. It may be that the Canadian-U.S. border could have been better monitored, but that is an American responsibility, as it was with Mexico — we aren’t East Germany, confining our population. Nor can we thank the Americans for the riffraff that floated right through their country and across our border, and for the deluge of firearms we have received thereby. Not having launched our country with a violent revolution, the right to bear arms is not unconditional in Canada, especially for illegal migrants.
Trump-hate seems to be preventing our government and public opinion from noticing that the worldwide balance of power and correlation of forces is tilting steadily in favour of Trump’s America. The United States is now the greatest oil and gas producer in history and effectively controls Venezuelan production. In this space two weeks ago, I mentioned the pro-American roll of Latin American dominoes, including nine countries that have recently elected pro-American governments. The hemisphere is waiting for the Brazilian election in October, with the candidates of right and left running neck and neck. Trump has also effectively turned the screws on Mexico, which had run up a nearly $200-billion trade surplus, while illegal migrants remitted nearly $65 billion back to Mexico, as Mexico incentivized hundreds of American manufacturers to relocate and take advantage of cheap Mexican labour and tax holidays to export their products back into the U.S. The effectively open border also poured billions of dollars of drug profits into the Mexican economy. Trump has stopped practically all of that.
Despite the Iranian conflict, the Middle East has been largely defused. Iran has lost its massive investment in nuclear military development and has been severely humiliated. The psychotic delusions of the Islamic Republic government cause it to ignore the fact that Iran is a sitting duck with no air defences and no navy and a military devoted altogether to the repression of the population. Israel is providing intelligence and missile-defence to Muslim Gulf states, which are now allies with the Jewish state and the U.S. against the Shiite Muslims of Iran. Hamas and Hezbollah have been mortally damaged and the United States will assure traffic through the Strait of Hormuz until new pipelines and pipeline expansions that bypass the Gulf make the strait less significant.
The United States has detached Venezuela and Syria as Russo-Chinese satellites, Cuba is about to fall after its 67-year tragic embrace of communism and Iran will be strategically emasculated at minimal personnel costs to the U.S. Trump is allowing Ukraine both to manufacture Patriot missiles in-country and to strike targets anywhere inside Russia. Russia is now importing gasoline and buildings around the Kremlin are regularly damaged by drones while Russia has suffered over a million casualties and lost perhaps half of its arsenal of sophisticated military equipment in the failed aggressive invasion of Ukraine. For a country with a GDP roughly the size of Canada’s, these reversals are the end of President Vladimir Putin’s effort to recreate the greater Russia of Peter the Great and Joseph Stalin.
The greatest challenge to the West is the collapse of Europe. Its previous embrace of almost total disarmament, the collapse of its birth-rate, impotence before massive illegal immigration from the Middle East and Africa, suicidal pursuit of the green terror against fossil fuels and nuclear energy, and its accelerating descent into self-throttling socialism all threaten to produce a new Dark Age in Europe. The recovery of European pride and strength now depends on the realignment of opposition parties in the United Kingdom, France and Germany, and the continued success of Italian Prime Minister Giorgia Meloni.
Canada’s position remains enviable. We have to undo 10 years of posturing, of ignoring national defence, of constitutional disintegration, of war on our petroleum industry to minimize our insignificant fossil fuel footprint and post-national absurdities such as lowering our flag for six months for an atrocity against the Indigenous for which there is no evidence. We have to phase down our public sector, reduce inter-provincial trade barriers, cut taxes, attract foreign investment and maximize our strengths.
Gradually we will become less dependent on trade with the United States. It is time for growth policies and adequate, though never obsequious relations with the U.S., challenging though that can be, as in the annoying Gordie Howe bridge episode. The U.S. rewards its current allies on their conduct, not traditional allies that shilly-shally. Its best allies now are Argentina, the United Arab Emirates, Japan and Poland. It is time to show Canada’s strength, including rediscovered strategic judgment. America is rising and we can profit from that as we always have and continue to emerge from its shadow.
National Post