Carney's “Middle Nations” Turn: No Solution for Workers
by Gary Porter
Mark Carney has the reputation of ‘being the smartest guy in the room.’ Every word of Carney’s celebrated speech in Davos was written by him personally. In the days prior to the speech, Carney met privately with a number of key European leaders. The groundwork was well prepared, evidently. Carney received a standing ovation, a rarity at Davos among the billionaire attendees and their senior political and bureaucratic appendages. Some say there have been only 3 standing ovations in the 30 year history of the World Economic Forum.
The speech has been the subject of analyses, commentary and significant action ever since. Many in Canada, including muddleheaded New Democrats and union brass have expressed support for Carney’s careful call to arms against US bully tactics and their resulting economic chaos. Many European and US commentators critical of Trump have commented about the incisiveness, directness and courage in Carney’s characterization of Trump’s weaponization of trade and tariffs, and his disregard for the rule of law, as a rupture in inter-imperialist relations. Carney admitted that Canada had hypocritically covered up for the violation of the so called “rule of law” imposed by the US for decades, knowing that it was applied unevenly and unfairly by the US super power. But that is over, he claimed.
Indeed, a new era has opened in which the US seeks simply to force capitalist “middle nations” to accept arbitrary, unpredictable, and often punitive and destructive trade terms. Such US policies do not result merely from Trump’s venal personality and chaotic brain, but from the increasingly urgent contradictions of the declining US empire.
Capitalist investors and infrastructure planners cannot operate in such an environment. Other options must be found. Carney suggested cooperation and agreement on trade terms and credit arrangements among “middle nations” beyond US direct control and the expansion of trade with Asia, including China. His aim is to organize middle imperialist powers to resist increasing US pressure to submit to the increasingly desperate needs of the US Empire.
Carney was speaking immediately after his very public and well-planned trips to China and Qatar. China, seeing the opportunity to help undermine the western alliance, a clear benefit to China, Russia and the global south, opened their doors to welcome Canada back after the break in relations following Canada’s arrest and lengthy detainment of Meng Wenzhou, CFO of Huawei, as per the US’ request.
Carney obtained tariff adjustments from China. The Chinese tariffs on canola and seafood are being reduced to 15%, while Canada has lowered tariffs to 6% from 100% on the first 49,000 electric vehicles from China this year, rising to 70,000 next year. 49,000 vehicles represent just over 3% of the Canadian vehicle market. Carney has negotiated trade terms with the EU on nearly the same basis as members of the EU and has negotiated credit terms with the Qatar sovereign fund for the nationwide infrastructure projects he aims to build. These include a new cross-Canada oil pipeline and the two new gas lines being built in Northern BC. Danielle Smith and the hydrocarbon billionaires have virtually nothing left to complain about with Carney at the helm.
Carney has positioned Canada as a country that is politically and financially stable, does not use tariffs and sanctions arbitrarily and whose laws and business practices are normal and reliable. Foreign investors are increasingly looking more to Canada as a place to invest rather than the US. Volkswagen recently announced it will move its large US based production facilities to Canada. Canadian business are less likely to transfer to the US and more likely to stay home.
However, Carney, a dyed-in-the-wool imperialist, strongly supports NATO and its proxy war against Russia in Ukraine. In spite of his recent improvement of trade terms with China he recently responded to a reporter asking who is Canada’s worst enemy. He said it was China, without hesitation.
In fact Stephen Harper, evangelical Christian and authoritarian Prime Minister of Canada for almost a decade, has largely supported Carney’s direction. Harper has called for unity in Canada against US threats to Canada’s sovereignty and in opposition to Alberta right wing separatists and to Quebec nationalists.
Canada’s ruling class operates an extensive imperialist system of its own. In the Caribbean, Latin America and Africa, Canadian mine operators, among the biggest in the world, extract vast resources under exploitative conditions. They extract massive concessions from neo colonial governments, desperate for investment and development to build infrastructure and develop their resources. Canadian-based global corporations pay low royalties and low or no taxes. Canadian corporations operating in the global south pay low wages with low or no benefits, no job security and no concern for worker safety. The super profits are not used to serve the interest of the people of the global south. Profits are transferred to tax haven jurisdictions to avoid tax in Canada as well. It is a sordid story of exploitation, oppression and greed. Carney’s speech was aimed at defending that system from the depredations of the more powerful US empire.
The Trump administration is making crude attempts to get a piece of Canada’s profitable imperialist action and to gain access to Canada’s plentiful resources. He wants exclusive or privileged access to Canada’s potash, oil, gas, timber, uranium, electrical energy and water, and wants them at below market prices. Preferably, he would like to add Canada’s vast resources and highly educated and skilled working class to the United States polity and subject to American law. The American capitalists would then strip Canadian workers of hard-won rights and benefits such as Medicare, dental care, abortion rights, paid holidays, paid maternity/paternity leave, low-cost child care, just as American workers are denied today.
All of these measures highlight the increasing margin of manoeuvre which Canadian billionaires seek in dealing with the gradually weakening US empire. Trump says the US does not need Canada on the one hand, while insisting that Canada become the 51st state on the other hand. Canadian capitalism and with Carney’s trailblazing, other mid-sized imperialist countries are looking to ally with each other to wrest increasing independence from the jaws of the US beast.
Does this mean better times ahead for Canadian workers? Unemployment and inflation are rising; new laws designed to streamline capitalist national projects largely bypass regulatory oversight; police enforcement against Indigenous and other people protesting against such projects escalates. Carney is cutting 40,000 workers from the civil service and increasing military spending to 2% of GDP and later, he says to 5%. This vast waste of resources on weapons and wars serves to aid the fascistic Zionists, the right wing nationalist Zelenski government and to assist the US to sustain growing provocations against China in the South China Sea.
Make no mistake. Carney may squeeze out some gains in the struggle of Canadian imperialism against the efforts of US imperialism to subordinate it. But Caney cannot solve the deep unsolvable contradictions in modern capitalism, nor improve the lives of Canadian workers. Independent political action by Canadian workers in their own interests and over the objections of conservative union leaders and pro-capitalist social democratic mis-leaders in the NDP, that is the way forward.