Justin Trudeau CNBC interview: International organizations may no longer be fit for purpose

Former Canadian Prime Minister Justin Trudeau said on CNBC’s CONVERGE LIVE that international institutions are “stunningly ill-adapted” to respond to modern challenges, but argued that middle powers should form new alliances in the face of pressure from great powers.

“If you look at different parts of the world, whether it’s the WTO or the IMF or other institutions, you’ll see that these institutions, whether it’s the WTO or the IMF or other institutions, aren’t necessarily aligned with the objectives that we’ve had for decades,” Trudeau told CNBC’s Mandy Drury in Singapore on Thursday.

Trudeau named the United States, China, Russia and India as “great powers” and said he had decided they “can opt in or opt out of being part of the rules-based order.”

“I think the question that’s at the heart of the conversations people are having right now is what happens to the rest of us if they don’t participate in promoting a new world-based order,” he said.

Canada is recalibrating its diplomatic relations amid geopolitical shifts brought about by U.S. President Donald Trump’s trade and foreign policies, with Prime Minister Mark Carney declaring a “break” with the U.S.-led world order and calling on middle powers to unite and chart their own course.

Trudeau reiterated Ottawa’s call for world leaders to come together and embrace “microlateralism,” where a small number of countries identify common interests, as opposed to the multilateralism found in large organizations such as the United Nations, WTO and IMF.

His comments come against the backdrop of the U.S. and Israel’s war against Iran and the U.S. operation in January that saw the U.S. seize control of Venezuela’s oil industry and capture Venezuelan President Nicolás Maduro and his wife.

In his first reaction to the Middle East conflict, Prime Minister Trudeau warned that the warring powers remain wide apart over the terms on which to end the war. “I think everyone involved wants to see a path through this. I don’t think we’re at a point yet where we can share a path through this. Unfortunately, this unstable situation will continue for some time.”

Mr. Carney issued statements at the beginning of the war that mostly seemed to support U.S. military action against Iran, but in March he further nuanced his position, saying Canada’s support was “regrettable” and that the current conflict was another example of the failure of the international order.

In a widely watched speech at the World Economic Forum in Davos in January, Mr. Carney appealed to middle powers to forge new alliances and build collective resilience to great power coercion. “If it’s not on the table, it should be on the menu,” he said.

With the Trump administration increasingly taking a transactional approach to trade and foreign policy, pressure is mounting for Canada to reconsider its economic and security dependence on Washington and accelerate efforts to diversify its trade and diplomatic relations with countries such as China and India.

Prime Minister Trudeau said bluntly: “American industry doesn’t want to work with us anymore, so we have to look at working with China.” Canada is trying to mend relations with China after eight years of frosty relations.

“The uncertainty of, ‘Are we going to impose another tariff?’ That means we’ve found a better partner, and that’s a way to avoid economic coercion,” Trudeau said.

Canada was one of the first countries targeted by President Trump’s tariffs, with Ottawa imposing retaliatory tariffs on steel, aluminum and auto imports from the United States. President Trump also threatened to impose 100% tariffs on Canada if Ottawa signs a deal with China.

U.S. aluminum imports from Canada have fallen by 27% since the tariffs doubled from 25% last year as President Trump maintained 50% tariffs on primary products from Canada, including aluminum and steel, and Ottawa diversified shipments to Europe, according to S&P Global.

“We’d much rather sell aluminum hundreds of kilometers away than thousands of miles across the ocean, but that’s not an obstacle so big that we’re going to sit back and not take action to diversify,” Trudeau said. “Building trusted relationships is the way to stay safe.”

The U.S.-Mexico-Canada Free Trade Agreement, which allowed Canada to avoid President Trump’s massive global tariffs, is scheduled for a formal review by July 1. Concerns have been raised over the slow pace of negotiations between Washington and Ottawa, with Canada’s chief trade negotiator Janice Caretto saying on Tuesday that it was unlikely all issues would be addressed by the deadline.

Prime Minister Trudeau said the rapid development of artificial intelligence has the potential to generate enormous wealth, but warned that it would cause discontent among the population if it benefits a few elites at the expense of ordinary workers.

“If we had trillionaires, something would be fundamentally wrong with the world. And everyone would be right to say this system doesn’t work.”

He argued that the resistance to democracy sweeping trade is a harbinger of what lies ahead if the benefits of AI are not shared more widely.

“The anti-trade backlash that we’re experiencing politically is actually an anti-prosperity backlash,” he said. Prime Minister Trudeau warned that the stakes are much higher this time, suggesting that if AI concentrates wealth in fewer hands, inequality in the era of trade-driven globalization will seem modest by comparison.