Freeland Decries ‘Curse of Oil’, Urges Tighter Economic Ties Among Allies

Green economies and global climate action were on the agenda Tuesday when Deputy Prime Minister Chrystia Freeland declared a new era in geopolitics brought on by Russia’s war in Ukraine.

In a speech to a group of Canadian and U.S. scholars at the Brookings Institution in Washington, DC, Freeland called for western democracies to connect their economies more closely while cooperating with the world’s dictators on issues—like climate change—that they can only solve together.

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She laid out an approach to “friendshoring”, first introduced over the summer by U.S. Treasury Secretary Janice Yellen, in which countries “make a conscious effort to build our supply chains through each other’s economies.”

The speech cast economic cooperation among like-minded governments as an extension of the military cooperation that followed the Russian invasion February 24. “As fall turns to winter, Europe is bracing for a cold and bitter lesson in the strategic folly of economic reliance on countries whose political and moral values are inimical to our own,” she said. “Where democracies must be strategically vulnerable, we should be vulnerable to each other.”

Freeland cast friendshoring as a way to move economic cooperation into the realm of procurement and government incentive programs. As examples, she cited a $7,500 electric vehicle tax credit under the Biden administration’s Inflation Reduction Act that requires components produced in any country with which the U.S. has a trade agreement, along with a European Union proposal to ban imports produced with forced labour.

For Canada, Canadian workers, and the country’s allies, friendshoring represents “an economic opportunity to attract new investment, create more good-paying jobs, and thrive in a changed global economy,” Freeland said. “It can make our economies more resilient, our supply chains true to our most deeply held principles, and protect our workers and the social safety net they depend on from unfair competition created by coercive societies and race-to-the-bottom business practices.”

And just as European vaccine makers honoured contracts with non-European allies in the midst of the COVID-19 pandemic, Canada will fast-track the “energy and mining projects our allies need to heat their homes and to manufacture electric vehicles,” Freeland pledged.

“I cite these examples because, critically, friendshoring must be green,” she said. “The curse of oil is real, and so is the dependence of many of the world’s democracies on the world’s petro-tyrants.”

So “friendshoring can both defend liberal democracy and help to preserve the planet if one of our primary objectives is to speed up the green transition—together.”

The new approach “may come with an initial price tag,” she added, but “as Europe is discovering this autumn, the cost of economic dependence on a dictator can be much, much higher.”

Freeland pointed to climate change as the “preeminent threat” that democracies must confront by working with the world’s authoritarian regimes. “Washington understood that it could not prevent nuclear Armageddon without talking to Moscow,” she said. “We cannot save the planet today without working with Beijing.”

But “a more overtly suspicious attitude towards the world’s dictators need not preclude, or even imperil, cooperating on common goals. In fact, being frank with ourselves and our adversaries about our grave differences may make it easier to identify and pursue areas of mutual interest.”

Reaction was muted yesterday as analysts absorbed the details in the speech. Some observers noted that Freeland had put the climate crisis into the same frame as some of her more frequent topics of interest—like globalization, inequality, and the conflict between democracy and autocracy.

“It left me with more questions than answers, but it was interesting to at least hear her talking about climate change in the context of these other things that she’s thought and written a lot about,” said Greenpeace Canada Senior Energy Strategist Keith Stewart.

Jamie Kneen, Canada program co-lead and outreach coordinator at MiningWatch Canada, said countries have a lot of work to do to deliver on the green promise Freeland sees in friendshoring.

“The bottom line is that you can’t build a green energy supply on injustice or other environmental harms,” he said. “And speeding up approvals invites all of that. It’s a nice gesture toward Germany, but it’s not a nice gesture toward First Nations or watersheds, or to all of the safeguards that we’ve worked so hard to build up, flawed as they are.”

Countries like Canada “have to do better if we are going to honestly say we are doing good,” he added. “Doing good for our friends by causing more harm is not really doing good.”