Mark Carney highlights areas of Australian-Canadian cooperation as middle powers

Mark Carney has nominated key areas of cooperation between Canada and Australia as part of middle powers building a new international order.

Addressing the federal parliament, with both houses sitting together, Carney once again pressed his now familiar argument for middle power activism as the old world order disintegrated amid rising great power rivalry.

“The question for middle powers like us is whether we establish the conventions and write the new rules that will determine our security and prosperity or let the hegemons increasingly dictate outcomes?”

Carney said that in the new global environment “the ability to form effective coalitions is becoming a central strategic capability.

"Great powers can compel. But compulsion comes with costs – both reputational and financial. Middle powers must convene to matter, but not everyone can.

"In a post-rupture world, the nations that are trusted and can work together will be quicker to the punch, more effective in their responses, more proactive in shaping outcomes, and ultimately more secure and prosperous.

"Middle powers like Australia and Canada hold this rare convening power. Because others know we mean what we say and we will match our values with our actions. Canada and Australia have earned this trust throughout our history. The question now is what we do with it.”

Carney said that because governments and businesses had given priority to efficiency over resilience, “we have developed supply chains and trading relationships that mean middle powers depend on great powers, and sometimes even individual corporations, for essential elements of their sovereignty”.

Integration was weaponised, creating fundamental vulnerabilities.

Canada was responding by building sovereign capabilities in critical sectors “by convening coalitions with trusted reliable partners like Australia, to ensure that integration is never again a source of our subordination”.

The five areas Carney named for particular cooperation with Australia were critical minerals, defence, artificial intelligence, trade and capital.

On critical minerals, he said: “In the old world and even to a degree today, the temptation has been to see ourselves as competitors. In this new world, we should be strategic collaborators. To boost investments, accelerate technical cooperation, enhance supply chain resilience, expand our domestic processing abilities, while boosting our strategic autonomy”.

Before his speech the two countries on Thursday signed a series of new agreements on critical minerals.

Carney pointed to existing cooperation in defence, for example both countries “are building up our capabilities, so the next generation of drones, surveillance aircraft, cyber, and AI are created in Adelaide and Alberta”.

Carney said Canada knew it must work with other middle powers to build its AI capabilities “so we are not caught between hyper-scalers and hegemons.

"Which is why Canada is collaborating with like-minded nations in Europe, and why we are partnering with Australia and India in a trilateral AI initiative to bolster our cooperation, and sovereign capacity.”

He said on trade Canada and Australia were “championing efforts to build a bridge between the Trans Pacific Partnership and the European Union”.

On capital Carney said: “as we are underinvested in each other’s economies, it is pressing to modernise our bilateral tax and investment treaty to make it easier to invest and grow good jobs in both of our countries. I welcome today’s agreement to do just that”.

Carney said: “These new connections between Australia and Canada are greater than the sum of their parts. This is alliance reaffirmed, a friendship strengthened, and a partnership to build greater prosperity and security in the Indo-Pacific and beyond.”