Saturday, November 21, 2020

Whither Canada in a World of American Decline

 Alex Usher asked this:

I have been thinking about this for the past four years with no answer.  It was more about Trump being unreliable and potentially hostile and less about American decline (although Trump being President accelerated American decline).  And I have not yet figured out a good answer.  Alex used the example of Finland in the latter stages of the Cold War, but I am not sure that is the best analogy.  Findlandization was all about a forced neutrality to keep the Soviets at bay.  Canada's position before Trump was of willing partner with common interests (although not identical).  During Trump, it was perhaps more of abused partner.  With Biden as President, there will still be tensions regarding some trade issues, but the issue will be about relying on a country with declining abilities.  

So what can Canada do?  The traditional answer is Diversify Canada's trade markets.  So much dependence on selling to, buying from, and co-producing with the US.  Sure.  But what are the alternatives?

  • China?  A huge market full of ... people stealing IP, holding Canadians hostage, extracting more from investments in a Tony Soprano kind of way, and so on.  Not great.  
  • India?  There are many reasons why India has been a tough nut to crack for not just Canada.  India has tended to protect its markets and that is not likely to change.  That the country is now run by Hindu nationalists makes it far harder for any country with multicultural values to work with India.  India only looks good because it has not put millions of Muslims in concentration camps (that would be China).  For Canada, all of this is more complicated because Canadian leaders see their own domestic politics in India--playing to Sikh communities in Canada while in India alienates the rest of India including the aforementioned Hindu nationalist folks.  
  • Japan?  There is a lot to be had in a partnership with Japan, but Japan faces a demographic cliff and it has been a long time since it was dominating trade.  
  • Europe?  Um, they have their own problems and don't see Canada as a solution to any of them.  While the EU could have been as replacing or supplementing the US, Brexit has done so much damage along with the lousy response to the 2008 financial crisis that it is not a good alternative for Canada.
  • Germany?  Merkel and Germany have been good partners, but, again, Canada is not a priority for Germany, and we have no idea how Germany will operate post-Merkel.
  • UK?  Oh my.  What a shitshow.  And, yes, the UK's misery makes an Anglosphere (sans US) a non-starter.  Not that UK-Aus-NZ-Can would sufficient heft.

And there is security.  Bandwagoning with the new rising power--China--is not going to happen for all kinds of reasons.  Right now, there are more folks who want to confront China.  How?  Damned if I know.  One running argument this week was with folks who accused those concerns about Chinese power of being cowards.  I did not enjoy that.  Canada faces a huge problem here because it has few levers, it faces much asymmetry with China's power, and China has no conscience about using its power as a bully.  All of the stuff I have heard about what Canada can do are pin-pricks whereas China can devastate entire markets by turning off access.  In my corner of the world, universities have become dependent on tuition by Chinese students.  Turn that off and ouch!  Anyhow, Finland, at least, had some idea of the possibility of allying with Russia's adversary.  Canada has no option to ally with the US's primary adversary.

India is too far away to a helpful ally although a multilateral partnership with Japan, Australia, Indonesia and others to contain China would be cool ... well, if the US provided most of the ships/planes/logistics/glue.  How can Canada improve its security in a world where the US is in decline?  Well, it could develop its own nuclear deterrent.  Nope, not gonna happen.  

Oh, and Canada's greatest asset in international relations is, alas, not that people like us or our brand.  It has been its mineral wealth.  And guess what?  Folks are moving away from oil and especially from, dare I say it, emissions-rich oil.  So, Canada has to figure out what comparative advantages it has and try to use those more strategically.  Yes, the brand still matters and has some use, but it is not going to buy Canada a seat at the UN.  Maneuvering through a multipolar, uncertain world will require more creativity, more adaptability, and a greater understanding of the tradeoffs.  For instance, pushing human rights will risk arms sales since most of the big buyers are ... awful.   So, realize that making a choice will mean getting gored by one of the horns of that dilemma.  And, yes, even choosing not to decide is still a choice.

So, yeah, a blog post of shrugging shoulders.  I still have no answer.  Sorry.

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