[Economy Pulse]Is Middle Power Cooperation Possible?

Canadian Prime Minister Proposes "Middle-power Strategy"
Simultaneous Economic Pressure from U.S. and China Highlights Urgency
Building Networks Among Middle Powers Remains a Key Challenge

At the World Economic Forum (WEF) in Davos earlier this year, Mark Carney, Prime Minister of Canada, described the current international order not as a mere "transition," but as a "rupture."

He specifically warned that if middle powers do not unite in a situation where major powers are using tariffs and supply chains as geopolitical weapons, they will ultimately become prey to these major powers. He proposed a "Middle-power Strategy" aimed at securing autonomous diplomatic space between American "isolationism" and China’s "authoritarian" offensive.

Prime Minister Carney mentioned this as a strategy to pressure the United States in tariff negotiations through cooperation among middle powers. However, the real intention is likely to build a middle-power diplomatic brand and form a table for middle-power dialogue. Currently, U.S. protectionism is exerting pressure even on its allies, while China is intensifying its economic coercion against countries cooperating with the U.S. Korea, as a representative middle power, should also concretize its own middle-power cooperation initiative to escape the forced choice between the U.S. and China and secure autonomy in trade diplomacy.

The middle-power alliance proposed by Prime Minister Carney should be understood as a strategic "last card" for survival in the post-Trump reshaping of the world order. Admittedly, middle-power cooperation in last year’s tariff negotiations with the U.S. yielded little tangible effect. This was because each country was drawn into the U.S. "divide and conquer" strategy, choosing competitive, individual negotiations with the U.S. over cooperation. However, as American unilateralism becomes entrenched in its structural and repetitive form, the reason and necessity for middle-power cooperation to overcome the structural dilemma have never been greater.

Even if cooperation in tariff negotiations has not produced results, middle-power cooperation can yield real achievements in terms of norm reconstruction. For example, middle powers could jointly file complaints with the World Trade Organization (WTO) Dispute Settlement Body (DSB), collectively pressure for the restoration of the Appellate Body, and construct a common legal argument that the U.S.'s unilateral tariff measures violate Article 1 (Most-Favored-Nation Treatment) and Article 2 (Tariff Concessions) of the General Agreement on Tariffs and Trade (GATT). While a single country’s complaint may be ignored by the U.S., if more than 20 middle powers file simultaneous complaints based on the same logic, it will build up international legal precedents and records, laying the groundwork for the long-term reconstruction of norms. This holds far greater strategic significance than a short-term reduction in tariffs.

Restructuring supply chains and building a complementary network among middle powers is also an urgent task, as diversifying supply chains to reduce dependence on the U.S. and China is a core interest shared by most middle powers. A supply chain network combining Canada’s critical minerals, Korea’s semiconductor and battery technologies, Australia’s rare earths, and Japan’s precision component manufacturing capabilities could form an alternative production system outside the framework of U.S.-China conflict. This goes beyond mere economic diversification and sends the strategic message to the U.S. that "we have alternatives," thus strengthening negotiating leverage.

There is also significant potential for middle-power cooperation in the fields of digital and technology standards. In emerging technology areas such as artificial intelligence (AI) governance, digital taxation, and data mobility regulations, the U.S. and China are already vying for dominance. If middle powers can form their own regulatory bloc, they can reduce dependence on the two great powers while securing real influence in the global standard-setting process.

Lastly, sharing negotiation information and developing joint responses to the U.S. divide-and-rule strategy are also crucial. The U.S. has been using a strategy of offering different terms to each country to foster mistrust and competition among middle powers. To counter this, middle powers need to establish an information cooperation system to share the terms they receive from the U.S. Even if complete transparency is difficult, operating information-sharing channels on key issues can neutralize the U.S.'s information asymmetry strategy.

Jung Ing-gyo, Professor of International Trade at Inha University (Former Chief Negotiator for Trade)

This content was produced with the assistance of AI translation services.