In Davos on 20 January 2026, Canada’s Prime Minister, Mark Carney, used a World Economic Forum platform to argue that the language of the “rules-based international order” has become a form of public performance rather than a description of how power now operates.
His central contention was that the world is experiencing “a rupture, not a transition”, and that states which continue to behave as if the earlier bargain still holds will discover that accommodation does not necessarily buy protection.
Carney built the speech around Václav Havel’s 1978 essay The Power of the Powerless and its parable of the greengrocer who displays a slogan he does not believe in order to avoid trouble. Carney’s call to “take their signs down” was aimed at governments and companies as well as publics: stop repeating formulas that suggest predictability, neutral institutions and mutual benefit through integration, when recent practice shows leverage, exemptions and uneven enforcement.
The Havel framing was more than a moral illustration. It allowed Carney to recast “middle powers” as actors with choices in a system increasingly shaped by the coercive use of interdependence. He cited tariffs, financial infrastructure and supply chains being used as instruments of pressure, and warned that the multilateral machinery on which middle powers have relied—trade rules, dispute settlement and collective problem-solving forums—faces sustained strain.
The speech landed in a Davos week dominated by arguments about hard power, including renewed tension over Greenland and the use of tariff threats as leverage. Reuters reported that Carney said Canada “strongly opposes” tariffs linked to Greenland and backed Denmark’s sovereignty while calling for focused talks on Arctic security and prosperity.
Carney also used Davos to outline an alternative to two paths he presented as inadequate: a reliance on the restoration of a US-led order, or a drift into what he called a “world of fortresses”. He accepted the impulse towards strategic autonomy—energy, food, critical minerals, finance and supply chains—while arguing that autonomy pursued solely at national level is expensive and accelerates fragmentation. His proposed remedy was burden-sharing through coalitions that build resilience collectively, sharing the cost of hedging and reducing vulnerability to coercion.
This is where Carney’s “value-based realism” was intended to sit. He described an approach that is “principled and pragmatic”: a commitment to sovereignty, territorial integrity, UN Charter constraints on the use of force and respect for human rights, alongside recognition that partners will not share all values and that outcomes often come incrementally. The practical implication was calibrated engagement—deeper ties where interests and values overlap, and limits where they do not.
The policy content was designed to show that the doctrine is not rhetorical. Carney portrayed Canada as strengthening capacity at home and diversifying abroad. On the European track, he pointed to Canada’s participation in the EU’s SAFE defence investment instrument. The Council of the EU said member states endorsed an agreement on Canada’s participation in December 2025, enabled by a prior EU–Canada Security and Defence Partnership.
Since the speech, the most consequential developments have been political rather than institutional. Reuters reported that US President Donald Trump responded publicly after Davos, and that the exchange contributed to a rallying effect for Carney at home, with his stance becoming a focal point in Canadian debate about economic dependence on the United States and the handling of tariff threats.
The clearest test of Carney’s argument about retaliation and leverage came with Trump’s “Board of Peace”, unveiled in Davos as a US-led initiative described as supporting ceasefires, post-conflict security and reconstruction efforts, initially tied to Gaza. Reuters reported that Trump later withdrew Canada’s invitation to join the Board, announcing the decision on social media shortly after the Davos clash; the same report said participation would require a $1 billion contribution from members, and noted that several close US allies were not joining.
The Board has also become a marker of how middle powers are sorting themselves amid competing frameworks. Reuters reported on 23 January that Spain would not join, with Prime Minister Pedro Sánchez citing commitment to the UN system, international law and multilateralism, and pointing to the Palestinian Authority’s exclusion from the Board. The Reuters report also said most EU countries were not participating, with Hungary and Bulgaria identified as exceptions.
Taken together, these developments have tightened the link between Carney’s diagnosis and observable state behaviour. His Davos argument was that middle powers weaken themselves when they bargain bilaterally from a position of dependency, and that they gain room for manoeuvre by reducing exposure to retaliation and by forming issue-specific coalitions with sufficient common ground to act. Within days, the same themes appeared in the form of tariff threats, public rebukes, selective invitations and refusals—precisely the mechanics of leverage that his speech sought to name.
