To Fix the Rupture, Trade is not Enough

UN Secretary-General António Guterres (left), is participating in a meeting with the Heads of State and Government of the European Union in Brussels, Belgium. Credit: UNRIC/Miranda Alexander-Webber Source: UN News

By Simone Galimberti
KATHMANDU, Nepal, Feb 5 2026 (IPS)

Will trade be enough to navigate the current waves of chaos and disorder that are underpinning the ongoing rifts among competing powerful and hegemon nations and the rest?

Amid tectonic shifts in the realm of geopolitics and international relations, amid what the Canadian Prime Minister Mark Carney recently defined as a “rupture” in the rules-based multilateral order, trading is seen almost as a panacea.

Yet are we really sure that new and alternative trading partnerships like the ones the European Union has signed with the Mercosur and India are the only ways to cope with an increasingly unpredictable American administration and an over confident and more ambitious China?

Mark Carney in his speech at the World Economic Forum in Davos a few weeks ago offered a blueprint for middle powers like Canada on how they can become less dependent on big hegemon powers.

While he was tacitly describing a tactic to tackle a bossy, unpredictable and more and more authoritarian president south to the border, Mr. Carney provided a foundational framework on how countries like Canada can leverage its natural resources and bet big on the power of trade with alternative markets.

No one doubts that trade can open valuable new options for established economies as well for new emerging ones like India.

The EU has also pivoted to this realm, using new commercial deals as a way to strengthen its own resilience and boost its economy while having no other options than maintaining a good relationship with the USA. But a playbook entirely focused on trade will also hit the wall.

While useful in the short term to escape from or at least try dodging expansionist maneuverings from Washington or Beijing, trade has limitations as well. A comprehensive and long-term response to these new difficult emerging circumstances cannot but be political.

Trade should be seen as a part of a broader toolkit of policies centered on nations committing themselves to invest more on regional projects of cooperation with other nations.

Strengthening political ties among neighboring nations through enhanced economic partnerships could offer the initial impetus to a new form of international regionalism.

Yet nations, while capitalizing on the economic dimensions of their bilateral relationships, should also be powered by a bolder, wider and importantly, more inspiring design.

The need for initiatives that, by intent, go beyond economics while dealing with other nations, would provide the space to imagine new political entities that could get respected and even compete with the existing hegemonic powers.

Imagine how trade and economics was underpinning and turbocharging the project of regional cooperation in post second world war Europe.

With the time, what was a mere economic association, a successful story of cooperation among equals , the European Economic Community turned into something more visionary and braver, a project of regional integration.

As we know from the recent episodes of confrontations generated across the Atlantic that humiliated and defamed Europe, this project is far from being accomplished.

Capitals from around the world, in the Global South and Global North alike, need to understand one thing: only the pursuit of a wider vision with multiple and complementary elements of integration that transcend economy, can offer them the safest route to be able to remain independent.

The building of regional cooperation frameworks, think of Association of South East Asian Nations or the Southern Africa Development Community, can offer a pathway to uphold their members’ internal legitimacy among the citizens while at the same time, cementing their power in the realm of international relations.

Yet the lesson from Europe is clear: economic cooperation and even economic based integration can only go so far.

Only an unequivocal support for more audacious projects can provide states with the leverage needed to deal with few but unrestrained hegemonic powers like China and Russia but also the USA with the second Trump administration.

As difficult and daunting as it is, only regional integration can offer nations a degree of collective power that will earn them some decent amounts of respect. Unfortunately, even regional cooperation is in shambles.

The Southern Common Market or Mercosur despite hitting the headlines with the recent signing of a trade agreement with the EU, (an agreement that the European Parliament, the semi-legislative chamber of the EU, “paralyzed” it with a vote to deferring its legality to the European Court of Justice) is nowhere resembling a politically integrated body of nations.

Who remembers the existence of the Union of South American Nations or UNASUR? Even ASEAN, seen as a model of regional cooperation, is at risk of losing its credibility with its famed “centrality” being put in question.

In Africa, the potential of SADC has evaporated while the most promising and bold attempt of building a political union, the East African Community (EAC) that was supposed to transform itself into a real federation, the East African Federation, also lost considerable steam.

Thanks to Mr. Trump’s ego and dramas stemming from it, the EU is now forced to reconsider its current trajectory of regional integration.

At this current pace and course, the EU will never be able to stand its ground and remain united and cohesive in tackling both overt and veiled threats and blackmails from the hegemonic powers vying to dominate the world.

The EU must be able to project power beyond its economic realm as Mario Draghi, the former Italian Prime Minister and President of the European Central Bank recently shared at the KU Leuven University in Belgium.

“Power requires Europe to move from confederation to federation” because as things stand now, Europe cannot even imagine to be able to survive as it is now.

“ “This is a future in which Europe risks becoming subordinated, divided and de-industrialized at once, and a Europe that cannot defend its interests will not preserve its values for longer.”

Mr Carney, the Canadian Prime Minister, should be praised for mincing no words in Davos. But rupture in the current multilateral order cannot be fixed with band aid solutions.

As much as important trade remains, it is going to be delusional to believe that, alone, it can do the job, in sewing and patching up the rupture that has been created and offer a very potent but still incomplete solution for nations.

We need initiatives that, by design, are fit to build political projects that, while start with nation states at the center, are able to envision, in a not too far horizon, a much more daring political project.

Brussels, as the de facto capital of the EU, could again provide a blueprint for this quantum jump towards a new phase of the European political project that can finally pursue deeper forms of union that, inescapably, would embrace federalism.

After all, the best way to preserve a nation’s standing is to invest in new forms of shared sovereignty.

This should not be a priority only for middle powers like Canada or the members of the EU. Even developing nations must come to terms with this new order and understand that their survival will be only guaranteed through ambitious initiatives of regional cooperation that have only the sky as the limit.

Unfortunately for Mr Carney and Canada, geography is unforgiving.

Who knows, perhaps we could imagine what are now unimaginable ties that would perpetually bind Ottawa with Europe or Mexico and the Caribbean.

Simone Galimberti writes about the SDGs, youth-centered policy-making and a stronger and better United Nations.

IPS UN Bureau