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

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

But as Freelandannounced 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 Canadaas the original Cold War.

In a speech to the Brookings Institutionon Oct. 11that is still making waves around the world, called variously though not by her a "manifesto" or the "FreelandDoctrine," the deputy PM andfinance ministerlaid outgroundwork for a new global trade regime.

Stop supporting autocracies

Using Russia's Feb. 24 invasion of Ukraine as a jumping-off point, Freeland's proposition titledHow Democracies Can Shape a Changed Global Economy(well worth a listen on the Brookings website) insists that we should stop supporting autocracies such asRussia 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 Yellenas a solution to supply chain problems are not entirely new. But in an impassioned and rationalpresentation to a collection of global policy wonks, Freelandsketched a blueprint for how Canada and its allies must respond to the world's latest crop ofautocrats.

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.

WATCH | Freeland says she won't 'sugar-coat' economic difficulties facing Canadians:

Freeland says she won't 'sugar-coat' the economic difficulties facing Canadians

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While she warns of a recession ahead, Finance Minister Chrystia Freeland says the federal government has the right tools in place to get through this period successfully.

"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 meansthe federal government cannotbail out everyone the way itdid during the COVID-19 economic collapse. Butby investing in Canada and promoting investment by our democratic trade partners, governments can help restart the West's technology and industrial engines, she said.

Nokia, not Huawei

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 developmentin Ottawa's Silicon Valley Northwith Nokia a company from Finland thatisa democracy and prospectiveNATO 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," Freelandsaid 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 tradingwith 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 postwarrivalry 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 democracyand rules-based trade.

But deciding it is now time to give up on good trade relations with Russia and China may have other consequences.

A more powerful Comecon?

Evidence of how quicklythe world has forgotten the global divisions of the pastbefore perestroika and glasnostand thecollapse of the Berlin Wallcame in a recent online search for Comeconand Canada. Instead of offering details of Canada's relationship with the Eastern Bloc'sCouncil for Mutual Economic Assistance, the search offered a long list of happenings forComicon, those "fan expo" events where people dress up as fuzzy creatures and superheros.

Only decades ago,Comecon was a formidableeconomic counterpart to the market forcesof the capitalist West, just as the Warsaw Pact was the counterpart to NATO.

Already crumbling, Comecondisintegrated in 1991 as market reformsand the new opening to the Westgave Russia, its former allies and its satellites access to the tools of capitalism. ButRadhika Desai, a professor at the University of Manitoba in Winnipeg who specializes in international political economy, says the modern equivalent may be no pushover.

"If China and Russia are able to achieve a really coherent collaboration, which I think is happening more and more ... I think they are going to create a really dynamic duo," Desaisaid on the phone this week.

"China has shown that it is not just a low-cost producer, but it can also take the lead in technology."

Desai is concerned that a tighter alliance of Canada with the United States and Britain could lead to an increase in the power of corporations and the loss of cloutby workers and citizens, as parties in democratic states find ways to co-opt poorer voters who feel they have been left behind.

But whether all of her democratic allies and their eventual political replacements will agree, Freelandoffered a stunning condemnation of globalization and the cheap labour in places like China that has added to the profits of many global companies.

"Workers in our democracies have long understood that global trade without values-based rules to govern itmade our people poorer and our countries more vulnerable," she said. "They have long known that it enriched the plutocrats but not the people."

Freeland said the world's democracies must have confidence that their system, one where governments change and people have the right to criticize their leaders, has what it takes to defeat economies based on coercion and to demonstrate to developing countries once more forced to choose sides that liberal democracy works.

And just as in the days of Comeconand the Warsaw Pact, there are already signs aEurasian alliance may be acting to convince the undecided that autocracies can also work, building the groundwork forcompetition between two new economic and military paradigms and power blocs.

Maybe the "end of history" has been postponed.