Front Burner - What is ‘The Freeland Doctrine’?

Episode Date: October 24, 2022

According to Deputy Prime Minister Chrystia Freeland, history isn't over. Speaking at the Brookings Institution in Washington, D.C., earlier this month, Freeland refuted the post-Soviet idea of "the end of history" — that after the Berlin Wall fell in 1989, the world was set on a path to unity and stability under free trade and liberal democracy. Freeland said the thinking of the era was "hubris," and that Russia's attacks on Ukraine are a reminder that autocracy and instability have risen once again. Freeland proposed an idea that some — though not her — are calling the "Freeland doctrine." In her vision, Canada would favour trade with countries that share our values, because we've learned that the influence of free trade isn't stopping autocracy. Today, journalist Paul Wells takes us through Freeland's proposal, and discusses whether there will be political will to make these costly choices for liberal trading partners.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. If you ever took any poli-sci courses in school or pay much attention to international relations, you might have heard of the so-called end of history. Basically, it's this idea that when the Berlin Wall fell, capitalism triumphed over the alternatives.

And as one of my colleagues summarized it, the world was on a single path toward a liberal democracy and rules-based trade. Supposedly, we've been living in the end of history for the last 30-odd years. This month, at a think tank in Washington, D.C., Canada's Deputy Prime Minister, Chrystia Freeland, declared the end of the end of history. She pretty much said, nice try. As we look back on the past three decades and move beyond them, we should remember that a world in which we all grew freer and richer together was a laudable objective and one worth taking some risk to construct. But, she said, those days are over. It really didn't actually work. But we also need to be clear-eyed about the results of that effort. Liberal democracy worldwide has today declined back to 1989 levels and autocracies have been making a

comeback many including China the second most powerful country in the world have grown both wealthier and more coercive and as Pukin is murderously proving economic interdependence does not always prevent war. All of this means that we, the countries of the non-geographic West, need to build a new paradigm. The Cold War is still over, but so is the end of history. It's up to us to design what replaces it. The vision for what replaces it is what Krista Freeland went on to lay out in her speech, a vision that some are calling the Freeland doctrines, though this is definitely not a new idea. My guest is journalist Paul Wells, also the host of the relatively new and very good podcast, The Paul Wells Show. And he's going to help me

break down what Freeland said and what it could mean. Paul, hi. Thank you so much for joining me on this very beautiful fall Sunday. So thanks for spending your time with me. Thanks for having me on. So thanks for spending your time with me. Thanks for having me on. And thanks for plugging the new pod. That's great. So maybe let's start here. Krista Freeland gives this big speech. And what's the vision she lays out for this new world order she believes that we should be cultivating? So she was in Washington for what's called IMF week, the International Monetary Fund. Finance ministers get together and talk about the problems that the world is facing.

And apparently she normally, while she's down there, she gives a speech at the Brookings Institution or some other august institution to share Canada's thinking with decision makers in the United States. And in this speech, she said something obvious and then something perhaps surprising. The obvious thing is you can't rely on free trade to fix problem countries. During the heady days of the 90s, it was possible to imagine that rapidly expanding Western access to Chinese markets and Chinese access to Western markets would make China more like us. And that doesn't seem to be working in terms of democratic values and freedoms and

things like that. And similar overtures to Russia over many years don't seem to have made Russia more reluctant to invade its neighbors. And so the obvious thing is free trade isn't as powerful a tool for democratic progress as people might once have thought. And then the conclusion that she draws is, so let's not try so hard to trade freely with everyone. Democratic countries that like their values should find other countries that share similar values. share similar values, and we should lean into trying to trade with one another and make democracy a component of trade policy. For Canada and Canadian workers, and for those of our democratic allies around the world, this is an economic opportunity to attract new investment, create more good-paying jobs, and for us all to thrive in a changed global

economy. It can make our economies more resilient, our supply chains true to our most deeply held principles, and protect our workers and the social safety net they depend on from unfair competition created by coercive societies and race to the bottom business practices. And then the third thing she said, which was really interesting, was while this suggests that there are some opportunities for Canada because things like critical minerals are things that Canada has and very few other countries have. And so Canada can find secure markets for some of these things. It also imposes responsibilities. It says that Canada needs to step up and help other countries that share similar values, you know, even at the cost of

spending domestic political capital, she said at one point. And crucially, we must then be prepared to spend some domestic political capital in the name of economic security for our democratic partners. And so that means this new idea of friend-shoring, as she called it, might be hard, but that doesn't mean it's not worth pursuing. Democracies must make a conscious effort to build our supply chains through each other's economies. Where democracies must be strategically vulnerable, we should be vulnerable to each other. One way to do this, of course, is through trade agreements. I want to get into that a little bit more with you in a bit, like this idea that this could be very hard. But when she talks about friend shoring, does she say explicitly who's in and who's out? Clearly, Russia and China are out. But does she mention, for example, Saudi Arabia, with whom we have a multi-billion dollar trade relationship with,

that includes the sale of military equipment in the form of light armored vehicles? No. And this is where the devil is absolutely going to be in the details for something like this. The only cases that she mentions as the outs are everyone's favorite pariah states, China and Russia. That's easy. What about a place like Nigeria, which is Canada's largest trading partner in Africa, and is making real progress on a lot of these values. But any international survey of democratic standards and practices would suggest that Nigeria is a very problematic place. So do you freeze them out because they don't qualify for friend-shoring? Or do you include them in the hope that she has just said is discredited,

that more trade will lead to more progress? It was interesting. I don't know if you saw it. She got pressed on that after that speech by a gentleman from the African Development Bank who asked her to respond to concerns that this will increase Russia's influence on the continent. The messaging we're getting from the West is we're not going to get that much resources because a lot of the money is going to go to Ukraine. And she responded by saying in part that people have to be prepared to die for their democracies. One of the sort of profound lessons, I think, of the war in Ukraine is democracy can only be built by people themselves, for themselves.

And a democracy can only be defended by people themselves if they're actually prepared to die for their democracy. And I think that's something Volodymyr Zelensky understood from day one, that Ukraine was only going to fight if he stuck around. And Ukrainians saw that he stuck around. And they're fighting for themselves. They're doing it themselves. And actually, I think that's why it's working.

Which is something that definitely rubbed some people the wrong way. She actually ended up apologizing. If anyone did find my comments to be insensitive, then I'm very sorry. And I do really recognize the terrible harm done by Western colonialism. He ended up a couple days later having to circle back and say, golly, I'm so impressed with the progress that Africa has made and we need to be doing more in Africa, not less. Which A, is ironic because she's the only,

she was foreign minister for a time, she isn't any longer. She's the only foreign minister in my lifetime not to have visited Africa while she was foreign minister. This is precisely the point. If it means anything, it means there's going to be hard test cases. And this seems only to have occurred to her when that question got put to her. You talked before about how this way of thinking, it's not just talking, that it would impose obligations on Canada. And you talked about this domestic political capital that she talked about spending. And just translate that a little bit more for me now. Like

what exactly is she talking about here? So I believe the CP reporter in Washington decided this was a story because of a couple sentences in her speech. And I wrote about it in my own newsletter the next day. And it was absolutely because of these two sentences. So what were they? First of all, she said, as cited in the CP story, shared approaches to trade will be vital, she added, as will a mutual willingness to, quote, spend some domestic political capital in the name of economic security for our democratic partners. And then she says, also, quote, Canada must and will show similar generosity in fast tracking, for example, the energy and mining projects our allies need to heat their homes and to manufacture electric vehicles. Yeah. What did you think when you heard that? I thought, first, generally, this is a fairly rare admission from a minister in the Trudeau

government that things are sometimes hard and require choices and require Canada to do things besides receive the munificence of its friends. This government doesn't like to say that things are going to be hard sometimes. But the crunch was that notion about fast-tracking energy projects our allies need to heat their homes. Who are our allies? Well, she was speaking in the context of the European Union. What do they need to heat their homes? This winter, they need natural gas because they're not getting it from Russia. And so that made it a very interesting speech

because Chancellor Scholz, the new German chancellor, just visited Canada, made it really clear he's interested in getting energy solutions, not only green energy solutions over the long term, but natural gas right now. And obviously there is the need for using gas, which we buy all over the world from good partners, when we stop to buy gas from Russia. And this is what is also our talks about. We would really like Canada to export more LNG to Europe, yes. And he went home empty handed. So it was at least arguable that this was a, you know, capital letters, boldface reversal in Canadian energy policy. And so that's what made a lot of people really interested.

Well, it's also counter to what Environment Minister Stephen Gilboa has been saying, right? Not to mention climate activists and indigenous people whose land might overlap with these energy mining products. But I haven't heard Gilboa talk the same kind of talk. Yes. And on the one hand, the government says that to some extent they've been implementing these sort of fringe-shoring policies all along. It's why Canada, the Prime Minister

and Doug Ford had an event in Ottawa last week with the CEO of Nokia and offered Nokia essentially a blank check to set up the kind of fifth generation facility in Canada that Huawei might once have been setting up if China hadn't become so antagonistic. But on the other hand, let me skip to the chase. I've been asking around people inside the government, people in various departments of government, people who recently left the government who tend to be a little more relaxed about talking. Nobody knows what that line, fast-tracking energy projects our allies need to heat their homes. But everyone is convinced that it doesn't mean Canada is going to start exporting LNG very soon.

And there's some regret in government circles that the minister used that terminology. Yeah, well, then what do you think she meant? I think it's entirely possible she didn't mean much. I think energy projects to heat their homes, you know, that could mean green hydrogen several years down the road because it's still a very immature technology, but it doesn't mean anything for this winter. And there's been a lot of head scratching over why a finance minister who's usually quite agile on her feet picked those words. So this is turning into an interesting story. The notion of friend-shoring is absolutely in the air. I mean, Freeland gave most of these remarks in June in Toronto

at an event hosted by the very liberal-friendly think tank Canada 2020, sitting next to Janet Yellen, the American Treasury Secretary. What we can really contribute in a world of friend-shoring is critical minerals and metals and energy. And Yellen coined that term, right? Yellen has been saying it quite a bit, notably in a speech in South Korea in July. Friendshoring is about deepening relationships and diversifying our supply chains with a greater number of trusted trading partners. The purpose is to lower risks for our economy and theirs. You know, I put on my Explorer costume and I've been looking, searching for the

roots of friendshoring. Joe Biden campaigned very vaguely on the term. And in one of the first executive orders that he signed, February, he signed an executive order on America's supply chains in the depth of the COVID crisis after having essentially won the presidency because Trump had messed up the COVID crisis and determined to make sure that America would have ready access to the things that it needs. And in the 100-day review of that executive order, the White House was talking about that policy as an example of friend-showing. As soon as the Americans start doing that, it becomes super important for the Canadians to make sure they're a friend. If the Americans are deciding who they're going to trade with based on values, then it actually becomes, it's not just a hobby of Chrystia Freeland's to be nice to Janet Yellen.

She really needs to be seen as an indispensable ally by Janet Yellen, which explains much of the rest of the story. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years.

I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo, 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, partner, create a financial vision together. To listen to this podcast, just search for Money for Cops. This idea of moving closer and closer towards our friends and farther and farther away from our enemies economically, in practice, this seems so hard to do and something that could really hurt us economically. I mean, we did $90 billion worth of trade with China last year. What are we supposed to do? And this is what I've been told,

is Canada is not about to shut down existing trade with China. It's not even going to discourage firms from seeking new markets in China. That if this means anything, it's more in terms of building up relationships with friends rather than cutting off people who are less than friendly, countries that are less than friendly. And then the test becomes, does it mean something significant and meaningful and sometimes difficult, or does it mean not much at all? But Freeland did point to a real case. A year, a year and a half ago, when Canada did not have ready access to new vaccine supplies, people in Canada were super eager to get vaccinated, and the United States was hoarding their vaccine supplies. Canadian politicians and diplomats were

able to get access to vaccine supplies from the EU, even though European governments were under the same pressure to hoard their own supplies, by appealing to longstanding values and alliances and principles, and essentially guilting the Europeans into coughing up some vaccine for us. That was a kind of a hastily improvised French-hoaring moment. It was heartening to read in Freeland's speech that somebody in the Canadian government thinks that we now owe the Europeans some consideration. Yeah.

But then the hard question is, what would that hard, you know, substantive consideration look like? And apparently it doesn't mean natural gas. Yeah, because I mean, the Germans very clearly seem to be asking us to get our national natural gas up and running as quickly as possible. We do not seem to be wanting to do that.

So like at some point, like French shoring has to be a two way street, right? Like you have to give something back to your friends if they give you things. way street, right? Like you have to give something back to your friends if they give you things. Yeah. I mean, like I'll tell you, the geography of Europe is rich and vast and fascinating, but they don't have an awful lot of the critical minerals they're going to need to build car batteries. And Canada is going to be super happy to sell them our critical minerals. And I think in the end, I mean, politics often comes down to trying to pick between friends and interests, between principles and advantage. And the question, whenever any politician speaks is, are you talking about something you're going to do when it's easy, or are you talking about

something you're going to do when it's hard? It's absolutely the case that Canadian governments are putting a lot of effort into building up supply and markets for our critical minerals. Because to some extent, with some of these substances, you know, extremely rare earths and metals and so on, it's basically Canada or China that is going to be providing the world with these things that are going to become more and more important over the next little while. But that's a case where our interests and our values line up so obviously that almost nobody would disagree. On harder cases, that's when we find out whether the Freeland Doctrine, the Yellen Doctrine, the Biden Doctrine, whatever this thing is, whether it means more than kind words. And that's something that will be tested again and again over the next several years. It's notable to me that she's a deputy prime minister. Is a prime minister talking like this, too? Well, a lot of people said that when he got up next to the CEO of Nokia and said, you would not believe how welcome Nokia is to build the infrastructure that

Huawei would have built. That is an example of the application of this principle. Again, picking Nokia over Huawei is maybe not the most difficult thing that Justin Trudeau ever did politically. And incidentally, on the Nokia thing, the press release that the government put out said that Canada is going to provide up to $40 million. And the reason we don't know how much Canada is going to spend is that Nokia hasn't finished filling out its application under the relevant program yet. We're so eager to have Nokia set up shop with fifth generation hardware in Canada that the government's writing blank checks to them. Maybe that's another aspect of the story that people deserve to hear about. Look, I guess another question I have, look, I get the argument that increased economic cooperation has not achieved what everybody hoped it was, that it hasn't achieved this rules-based order and pushed all these countries to liberal democracy. to become tighter and to isolate authoritarian states even more so that they form an even tighter

block. Are there concerns that that won't work either? Right? Like, what could come of it? That's another piece of the puzzle. I mean, if we stop holding out all of branches or contracts to countries that are less consistent in their adherence to democratic values? Are they just going to give up altogether on democratic values? Will it undermine reform factions within those countries? I do think the lesson of the last few years has been that Western democracies can't hope that being nice to autocracies will make the autocracies nicer. And I do think that to some extent, countries have to put a little bit more time into making their own decisions.

I guess the only point of what I've been saying today is that doesn't shut down all the questions that follow. It makes all those questions more pressing. What does spending domestic political capital mean? At what cost? Look, free trade is cheaper. Consumer goods are a lot cheaper for having been made in China. And if that were even on a long, slow trend to change, that would make stuff more expensive for people who in many cases can't afford it. But that's what governing is. I mean, governing is to some extent acknowledging first to yourself and then to populations that governing implies and forces decisions among competing goods. It's not always about picking the good thing over the bad. And in our polarized political environment, governments are way too eager to tell us that

all we have to do is do the good thing and not do the bad thing. The hard choices come when everything looks good and you can't do it all. And I think part of the excitement over what in the end was not a super original Christia Freeland speech is that it was refreshing to hear one politician saying that even clumsily. Interesting. Paul, thank you for this. It was so nice to talk to you today. Thank you.

Thanks for having me on. All right, that's all for today. Thank you very much for listening and we'll talk to you tomorrow. For more CBC podcasts, go to cbc.ca slash podcasts.