Rules-based order fading, world in a 'rupture': Canada PM Carney at Davos

WEF 2026: Canada PM Mark Carney highlights risks of coercion via trade, finance and supply chains; calls for stronger alliances and strategic autonomy for countries

Canadian Prime Minister Mark Carney on Tuesday warned that the world is going through a "rupture" in the global order, and not a slow or orderly transition. Speaking at the 56th Annual Summit of the World Economic Forum (WEF), he cautioned against the growing use of trade, finance and supply chains as tools of pressure.

 

Carney said that the old idea of a stable, rules-based international system is fading, replaced by a harsher reality shaped by power politics and rivalry among major nations.

 

End of a 'pleasant fiction'

 

In his address, the Canadian PM said that the world has moved beyond the comfort of old assumptions about global cooperation. "Today, I will talk about a rupture in the world order -- the end of a pleasant fiction and the beginning of a harsh reality, where major geopolitical powers operate with few limits and constraints," he said.

 

 

"Countries like Canada have the capacity to help build a new order that reflects our values, including respect for human rights, sustainable development, solidarity, sovereignty and territorial integrity."

 

He added that the current global environment is increasingly shaped by competition between powerful states, where rules are applied unevenly. "Every day, it seems we are living in an era of great power rivalry. That the rules-based order is fading, the strong do what they can, and the weak suffer what they must. This aphorism of vicissitudes is presented as inevitable, as if the natural logic of international relations is reasserting itself," he said, stressing that the world was facing a rupture, "not a transition".

 

Warning against giving in to powerful nations

 

Carney warned smaller and middle-sized countries against the temptation to quietly accept the demands of dominant powers in the hope of avoiding trouble.

 

“Faced with this logic, there is a strong tendency for countries to go along to get along -- to accommodate, to avoid trouble, to hope that compliance will buy safety. Well, it won’t,” he said.

 

He argued that such accommodation does not lead to real security or sovereignty.

 

Rules-based order was flawed, but useful

 

The Canadian PM acknowledged that the international system was never truly equal. Powerful countries often ignored or bent rules when it suited them.

 

"For decades, countries like Canada prospered under the rules-based international order. Because of this, we valued a foreign policy aimed at protecting it. We knew that the story of a rules-based international system was partially false: that the strongest exempted themselves when convenient, trade rules were enforced asymmetrically," he said.

 

"And we knew that international law applied with varying rigour depending on the identity of the accused or the victim."

 

Still, Carney said the system delivered important global benefits. "This fiction was nevertheless useful. American hegemony helped provide public goods -- open sea lanes, a stable financial system, collective security and frameworks for resolving disputes. We participated in this ritual and largely avoided calling out the gaps between rhetoric and reality," he said.

 

However, he added, "This bargain no longer works."   

 

Trade, integration turning into weapons

 

Carney warned that economic integration, once promoted as mutually beneficial, is now being used to pressure sovereign nations. "We are in the midst of a rupture, not a transition," he said.

 

Tariffs, control over financial systems and dependence on supply chains are increasingly being used as coercive tools, he said.

 

"You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination. As a result, many countries are drawing the same conclusion: they must develop greater strategic autonomy... This impulse is understandable. When rules do not protect you, you must protect yourself," he said.

 

'A world of economic fortresses will fail'

 

While recognising the push for strategic autonomy, Carney warned that turning inward would come at a heavy cost. "But we must be clear about where this leads. A world of fortresses will be poorer, more fragile and less sustainable," he said.

 

He also warned that powerful countries cannot endlessly turn relationships into transactions. "And there's another truth: if great powers abandon even the pretence of rules and values for the unhindered pursuit of their power and interests, the gains from 'transactionalism' will become harder to replicate," he said.

 

"Hegemons cannot continually monetise their relationships. Allies will diversify to hedge against uncertainty. They will buy insurance, increase options and seek greater sovereignty. This is classic risk management."

 

'Cooperation is the better choice'

 

Carney said that countries must choose between isolation and cooperation, arguing that shared standards and partnerships can reduce risks and costs.

 

"The costs of strategic autonomy and sovereignty can also be shared. Shared standards reduce fragmentation, complementarities create positive-sum outcomes, and for Canada, adaptation to this new reality is not optional — it is essential. The question is whether we respond by building higher walls or by pursuing something more ambitious," he said.

 

‘Middle powers must act together’, says Carney at Davos

 

Carney stressed that countries like Canada must work collectively to protect their interests. "Middle powers must act together because if we're not at the table, we're on the menu," he said.

 

He warned against relying only on one-on-one talks with major powers. "But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what's offered. We compete with each other to be the most accommodating," he said.

 

"This is not sovereignty. It's the performance of sovereignty while accepting subordination."

 

‘Honesty about the world as it is’

 

Carney concluded by highlighting Canada’s strengths and the need to face reality clearly.

 

"So Canada has what the world wants. We are an energy superpower. We hold vast reserves of critical minerals. We have the most educated population in the world. Our pension funds are amongst the world's largest and most sophisticated investors. In other words, we have capital, talent and a government with the immense fiscal capacity to act decisively."

 

"We have a recognition of what's happening and a determination to act accordingly. We understand that this rupture calls for more than adaptation. It calls for honesty about the world as it is," he said.