How Liberal Democratic Countries will cooperate without the US

 

I sometimes get things right and sometimes wrong, but I cannot remember one of my posts being proved right within two days of publication. Europe stood up to Trump’s bullying over Greenland, and Trump backed down for all the reasons I gave in last week’s post. It was a big failure for Trump, and a big victory for European politicians including Starmer, although media coverage did its best to hide the fact. [1] The past week may well be seen in retrospect as a turning point, and that turning point was marked by a speech as well as Trump’s humiliation.

As speeches go, Mark Carney’s to Davos was very well written. It was also I think the first time a Western leader outside the US has publicly stated so clearly that the old world order has gone. The idea that a US based world order has come to an end is hardly new (even I argued as much a year ago), but for it to be stated so directly is striking. That this should come from Carney in part reflects that US threats to Canada helped get him elected, but more importantly as Adam Tooze notes, Carney had been thinking about the role of US hegemony for some time.

What is implicit in the speech is that the rupture, not transition (to use his words), in the old world order is a result of a change in the stance of the United States. It is no longer the leader and protector of the old order, but is instead acting in its leaders own personal interests which includes confrontation with and even invasion of European countries, and a total disregard of existing rules and institutions.

One of the unusual features of the speech is that it was honest about its subject matter. To quote:

“We knew the story of the international rules-based order was partially false. That the strongest would exempt themselves when convenient. That trade rules were enforced asymmetrically. And that international law applied with varying rigour 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.”

In contradiction, it could be argued that the change is just Trump treating Europe and Canada in the way the US often treated South America. But this would be a mistake because the nature of US meddling in other countries has changed. Whereas during the Cold War in particular the focus was on ‘discouraging’ left wing governments and backing US business interests, the aim of the current US regime is to promote governments in its own image: populist, anti-democratic, authoritarian.

A question that the speech does not address is whether this rupture is permanent. I suspect many Labour politicians in the UK hope that it isn’t, and that when Trump goes something like the old order can be rescued. I addressed that in my post a year ago. First, there is a strong chance that Trump will defy the US Constitution and stay as effective President for more than his second four year term. Second, while the Republican party is now almost completely under the thumb of Trump, the MAGA movement that now dominates that party will outlast him. The structural factors that allowed a majority of voters to make a known fascist the President have not gone away, and instead have intensified as right wing oligopolists have taken over much of the means by which most US citizens get information.

Carney’s speech is a plea for ‘middle powers’ like Canada that retain liberal democratic governments not to retreat into national sovereignty but also to cooperate with each other. When middle powers “negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what is offered. We compete with each other to be the most accommodating.” On this he is absolutely right. The decision by the UK to leave the EU to gain additional national sovereignty can now be seen clearly as the colossal error many of us knew it always was. To quote Chris Grey:

“The Brexiter insistence that the EU was irrelevant to UK security, which they claimed was entirely catered for by a US-led NATO, which was always ill-informed, is now exposed as the greatest strategic miscalculation in modern British history.”

What kind of coalition building are we talking about? Carney and Canada are “pursuing variable geometry— different coalitions for different issues, based on values and interests. On Ukraine, we are a core member of the Coalition of the Willing and one of the largest per-capita contributors to its defence and security. On Arctic sovereignty, we stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland’s future. Our commitment to Article 5 is unwavering….. On plurilateral trade, we are championing efforts to build a bridge between the Trans-Pacific Partnership and the European Union, creating a new trading block of 1.5 billion people.”

He describes this approach as

“principled and pragmatic. Principled in our commitment to fundamental values: sovereignty and territorial integrity, the prohibition of the use of force except when consistent with the UN Charter, respect for human rights. Pragmatic in recognising that progress is often incremental, that interests diverge, that not every partner shares our values. We are engaging broadly, strategically, with open eyes. We actively take on the world as it is, not wait for a world we wish to be.”

Of course principles may not be applied consistently. Canada still provides arms and support for a right populist wing populist government in Israel that has, according to most experts, been committing genocide in Gaza.

For a middle sized power like Canada this “variable geometry” could be described in another way: seek alliances where you can to replace a historic dependence on the US. On the assumption that rejoining the EU is unlikely to happen anytime soon, the UK in this respect is a middle sized power in a very similar position to Canada. Yet Starmer’s initial response to Trump’s Greenland threats was very different in tone, stressing the importance of the US to the UK’s security in particular. It was more a ‘colleagues will differ’ talk rather than Carney’s ‘the world has changed’ speech. Whether this represents a lack of honesty facilitated by not wanting to provoke the beast, or a hope that the old order can be restored once Trump is gone, is not totally clear.

If it was the former, subsequent events showed the nature of the problem that the UK and all the remaining liberal democracies around the world face with the Trump/Vance/Miller regime. Starmer was ‘rewarded’ for his praise of the US/UK alliance with an attack from Trump over the Chagos islands deal. Trump did this not because the US opposes the deal, but simply because it helped the UK's right wing populist parties. I suspect Carney is right in understanding that when your very existence provokes the Trump regime, worrying about how what you say will be received by Trump may matter less than being honest with your own voters.

Starmer’s response to Trump’s Chagos attack was much better, where he was direct about what Trump was trying to do. Then last Friday he directly attacked Trump’s remarks about British soldiers in Afghanistan, and said Trump should apologise. Once again we may be seeing the consequences of Trump overplaying his hand, turning Starmer within just a week from an appeaser into someone not afraid to use attacks on Trump for electoral advantage. [2] I fear it is more likely that after this week Starmer will revert to his original stance.

The EU is in a rather different position to Canada or the UK. It could potentially become a global power to match the US, China and Russia. Indeed, it is possible to imagine that the old world order survives, simply refashioned with the EU replacing the US as the dominant power. There are two obvious problems with this. The first is that the EU is a group of member states rather than a single country. The second is right wing populism is already dominant in a few EU countries, and as a result one of these at least, Hungary, appears closer to Russia and the US than the EU. This particular problem may go away in April, where Orbán’s Fidesz party may well be defeated, but a more serious challenge comes in 2027 with the French Presidential elections, where the right wing populist candidate has according to current polls a good chance of winning.

Until then, at least, the EU will continue to limit its dependence on the US as far as it can. The ‘variable geometry’ that Carney talked about will mean that trade with the US will continue, despite tariffs, but those European companies and some US exporters wanting stable and secure markets or supply chains will over time try to avoid the disruption of unpredictable tariffs by avoiding the US. [3] Through the Digital Euro the EU will try to reduce its dependence on a dollar payments system. The dollar’s share of global foreign currency reserves is falling rapidly. Needless to say, none of these are quick processes. 

On security Europe and Canada will endeavour to keep NATO ties because that hinders potential US aggression towards Europe, as the Greenland resolution showed. Like NATO, other institutions of the old order, like the IMF and the World Bank, will continue as a means of trying to anchor the US as far as possible to normality. It is unlikely that we will see new institutions emerge involving the middle powers that remain liberal democracies. Instead we are likely to see more ad hoc groupings of nations aimed at tackling specific issues, such as Greenland, or the ‘Coalition of the Willing’ helping Ukraine fight Russian aggression and already replacing the assistance that the US used to provide. In the longer term major European countries, especially the UK, will have to divorce themselves from the US inspired ‘war on terror’ whose disastrous consequences include, at least in part, Western complicity in the genocide in Gaza.

[1] True, I didn’t prophesy the market reaction to both Trump’s tariff threats and the EU’s robust reaction, but the point of the post was that he resorted to the weak threat of tariffs precisely because his political ground was much more fragile than Europe’s.

[2] The best thing Trump could do for Starmer right now is threaten some part of UK territory, as elections in Canada and now Denmark show,

[3] It is tempting to believe that the US administration's obsession with tariffs will not outlive Trump, and that even with Trump negative market reaction may limit their use in the future. However populists governments do seem to often put impediments in the way of trade in goods. As a result trade between liberal democracies may be less hazardous than trade with right wing populist governments.