Canada needs to define its interests, fast

American journalist Fareed Zakaria recently predicted that one of the most profound and lasting consequences of the COVID-19 pandemic will be that it shifts the growing economic and geopolitical competition between the United States and China from a “soft rivalry” to a “hard rivalry.” The two global powers were already locked in a technological race prior to the current crisis. The competition will only intensify in its aftermath.

This will necessarily have consequences for the rest of us. As Canadian historian Margaret MacMillan has put it: “if these two countries cannot work together, if they cannot co-operate together, then the rest of us are really going to feel the chill.” These effects will invariably be felt by countries around the world but perhaps none more so than Canada.

As a mid-sized economy dependent on trade for twothirds of its GDP, Canada is highly vulnerable to any form of global disruption. But that the U.S. and China are our first and third-largest trading partners, representing roughly 60 per cent of the total value of Canadian trade, is even more significant. A protracted, zero-sum conflict between these two global giants will necessarily have far-reaching consequences for Canada's economic and geopolitical interests.

It already has, of course. The extradition case of Huawei executive Meng Wanzhou and its political fallout (including the unlawful detention of two Canadians by Chinese authorities) is a prime example of how Canada cannot avoid being implicated in these ongoing bilateral tensions. The collateral damage that Canada has suffered is a reminder that only Canada will be concerned with its interests — no one else will.

This stark realization is finally starting to register among Canada's political class. Now is not the moment for a “post-national” politics, as Prime Minister Justin Trudeau has previously boasted. We need a hard-headed realism rooted in a firm understanding of Canada's national interests.

The truth is the relative tranquillity of the post-Cold War period caused us to become far too complacent. We assumed that the key underpinnings of Canadian economic and foreign policy — including American magnanimity, a rules-based trading system and the inevitability of globalization — were stronger and more stable than they proved to be. Simply put, we misread the meaning of Francis Fukuyama's famous essay about the “end of history.”

History, however, has come roaring back. It's being driven by the inextricability between modern technology, global economic advantage and national security. At its core is the interrelationship between the rise of the intangibles economy (think, for instance, intellectual property, software and data) and the geopolitical competition that it's fuelling. American policy thinker Michael Lind has referred to these developments as “the return of geoeconomics.”

The traditional production economy, which is the basis for our theories of global trade, tends towards mutually beneficial exchange. The British sell the Portuguese cloth and the Portuguese sell the British wine and both sides are better off, as David Ricardo explained more than 200 years ago.

But the intangibles economy operates according to a winner-take-all logic. It discourages global co-operation and instead incentivizes a race to accumulate intangible assets within one's borders. That these assets often have a dual purpose that stretches from the commercial realm to the national security realm only reinforces the imperative. U.S. Vice-President Mike Pence has called it a battle for the “commanding heights of the 21st-century economy.”

Canada has been slow to these developments. It's almost as if our diplomatic and political classes wanted to believe that global tensions were merely an aberration — a regrettable yet temporary manifestation of Trumpism. Yet the coronavirus experience has shown that this is wishful thinking. We're entering a period of renewed great power competition and Canada needs to be ready to defend and advance our national interests accordingly.

There are various policy reforms and diplomatic and military capacities that will be crucial in this new era. Future columns and op-eds in this series will no doubt debate them. But the first step is actually defining what Canada's national interests are.

This shouldn't be an odd question. It's precisely the kind of first-order issue that our politics ought to be debating. Yet, instead, too often, as Public Policy Forum president Ed Greenspon has written, “we seem to prefer the gauzy candescence of `values discussions.' “

We need to snap out of this collective stupor. How Canada navigates this new world of geoeconomics will be among the biggest tests facing our policy-makers in the coming years.

Passing this test will require that our politics become much more oriented around the question of Canada's national interests. These aren't matters of chance. They will necessarily involve a series of strategic policy choices ranging from our intellectual property regime to Arctic sovereignty to foreign aid and virtually everything in between.

We should have never lost sight of our national interests in the first place. But, as the pandemic has powerfully demonstrated, we need to rediscover it and fast. Nothing is more important for Canada.