Economist Eswar Prasad warns a ‘motley group’ of middle powers can’t stop the ‘doom loop’ threatening the global economy

Mark Carney, Canada’s prime minister, didn’t mince words when he took the stage at the World Economic Forum in Davos earlier this year. In Carney’s estimation, the rules-based international order was experiencing a “rupture.” Great powers like the U.S. and China were “using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, and supply chains as vulnerabilities to be exploited.” His message to middle powers was blunt: “If we’re not at the table, we’re on the menu.” 

But middle powers are a “motley group,” says Eswar Prasad, the Tolani senior professor of trade policy at Cornell University, including basically everyone outside of the U.S. and China. “They’re large and small, rich and poor, and so they’re not going to have perfectly aligned interests.”

Carney has previously called for “variable geometry,” or having governments build alliances in ways that align along certain interests. Yet Prasad cautions that such alliances are “not built on any common underlying values or fundamental trust.”

That will make Carney’s “variable geometry” a poor replacement for the global network of international institutions that helped lay down the rules of global diplomacy and commerce. “If you don’t have deep alliances built on mutual trust, it’s difficult to fashion a new rules‑based order,” Prasad says. “The underlying tensions between rich and poor countries will bubble up to the surface.”

Globalization as a political project has looked fragile ever since U.S. President Donald Trump first won the White House in 2016. Since then, Washington has steadily moved to “de‑risk” from China through tariffs, export controls, investment screening and other measures, while........

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