'Freeland Doctrine' could set the world on a path to a new trade cold war

After the Canadian deputy prime minister's declaration in Washington, D.C., last week that the "end of history" has itself now officially come to an end, Chrystia Freeland is bringing her message home to Canadians.

But as Freeland announced that we must abandon the optimism that post-communist countries would gradually turn into healthy democracies and good global citizens, some critics were warning that she was helping to widen a new great divide in trade and politics that may not be as favourable to Canada as the original Cold War.

In a speech to the Brookings Institution on Oct. 11 that is still making waves around the world, called variously — though not by her — a "manifesto" or the "Freeland Doctrine," the deputy PM and finance minister laid out groundwork for a new global trade regime.

Using Russia's Feb. 24 invasion of Ukraine as a jumping-off point, Freeland's proposition — titled How Democracies Can Shape a Changed Global Economy (well worth a listen on the Brookings website) — insists that we should stop supporting autocracies such as Russia and China and focus on trade and investment in the countries of our democratic allies.

Parts of the idea — including the "friend-shoring" proposed by U.S. Treasury Secretary Janet Yellen as a solution to supply chain problems — are not entirely new. But in an impassioned and rational presentation to a collection of global policy wonks, Freeland sketched a blueprint for how Canada and its allies must respond to the world's latest crop of autocrats.

This week, Freeland is following up her Washington talk with speeches across Canada, the first on Monday in Gatineau, Que., expanding on how her global plan will affect Canadian workers and livelihoods as inflation lingers and the world appears to be heading into recession.

While many trade experts have warned in the past that pulling away from Western dependence on Chinese manufacturing and Russian energy will create economic pain, Freeland said it is also a rare chance for a departure from the status quo.

"This change represents an economic opportunity for Canada," she told employees at a Quebec plant making green hydrogen from electricity. "An opportunity which only occurs once per generation."

She warned that brewing inflation means the federal government cannot bail out everyone the way it did during the COVID-19 economic collapse. But by investing in Canada and promoting investment by our democratic trade partners, governments can help restart the West's technology and industrial engines, she said.

As if a demonstration of Freeland's new push, on the same day she spoke, federal and provincial governments announced a new investment in research and development in Ottawa's Silicon Valley North with Nokia — a company from Finland that is a democracy and prospective NATO member on the frontier with Vladimir Putin's autocratic Russia. Canada used to have similar deals with China's Huawei.

"We can ensure that our economy prospers for generations to come," Freeland said in what could have been a hustings speech. "This is the future we can create for ourselves and our children."

Political grandstanding aside, the three pillars of Freeland's manifesto — trading with our friends, being inclusive of like-minded governments and breaking with the autocrats — really does represent a new paradigm after decades of globalization.

After the end of the Cold War, American scholar Francis Fukuyama — apparently "Frank" to Freeland, who rang him up beforehand to discuss her Washington speech — proposed "the end of history," the concept that once the postwar rivalry of communism and capitalism had ended in the collapse of the Soviet Union, the world was on a single path toward growing liberal democracy and rules-based trade.

But what Freeland called the "naked evil" of Russia's action in Ukraine and the growth of autocracy in China, where this week Xi Jinping appears to have become president-for-life, means the world must wake up from the dream of global co-operation, universal democracy and rules-based trade.