CANZUK’s relevance in an era of great power rivalry

The End of Empire

The concept of CANZUK—an alliance encompassing Canada, Australia, New Zealand, and the United Kingdom—finds its roots embedded in the history of the British Empire and the Commonwealth. Despite its historical allure and periodic revivals in political discourse, CANZUK never materialised. To understand why CANZUK did not emerge as a political reality and its renewed relevance, one must consider the geopolitical and economic shifts that occurred post-World War II.

Post-War Britain: A Nation in Decline

The United Kingdom emerged from World War II economically exhausted and heavily indebted. The vast resources of the British Empire were depleted, and Britain itself was sustained through substantial loans from the United States—a burden that remained with the British taxpayer until 2006. This financial dependency echoed Britain's diminished global standing and inability to maintain its Empire.

Moreover, the ideological contradictions of fighting for freedom in Europe while denying it to colonies became increasingly untenable. American pressure to decolonise (although not when it was against US interests, such as in Cyprus and Diego Garcia), partly to curb the spread of communism, accelerated the disintegration of the British Empire. The Empire, once a symbol of global dominance, was now in terminal decline.

Shifting Global Power

The United States displaced Britain as the central power within the Anglophone world, a position cemented after the Suez Crisis of 1956, which starkly revealed Britain's reduced global influence. Post-Suez, Britain retreated from its ambitions east of the Suez Canal, with policy instead focusing on the continental threat from the Soviet Union during the Cold War. Meanwhile, the CANZUK nations increasingly aligned themselves with the US, the new global maritime power, to safeguard their regional interests.

As the new global power, the United States promoted international free trade and economic stability through the Bretton Woods system. This system, established in 1944, created a framework for monetary and exchange rate management, facilitated by institutions such as the International Monetary Fund (IMF) and the World Bank. The US’s commitment to this new global economic order determined the post-war world, replacing the older colonial and imperial structures.

The Multi-Polar World Order: Re-emergence of Great Power Competition

Previously, the eternal great power competition came to an abrupt halt following World War II, with two superpowers left standing: the United States and the Soviet Union. The world was starkly divided into two ideological blocs, each dominated by their respective superpowers, with the international order being shaped accordingly. The United States promoted the Bretton Woods system of international free trade to contain the spread of communism and stabilise the global economy. After the US emerged victorious from the Cold War with the collapse of the Soviet Union in 1991, what remained was a unipolar world order of American hegemony.

The Decline of American Unipolarity

The period that followed was characterised by the US's ventures in the Middle East, primarily aimed at combating jihadist terrorism. Conflicts in Afghanistan and Iraq drained American resources and attention, contributing to the relative decline of US influence. Over time, the US experienced a decline in both its economic and military power; the US share of world economic output has declined from 21% in 1991 to 16% in 2023 in PPP terms, according to the IMF. During this period, a new competitor emerged: China.

China took full advantage of the global economic order established by the United States, rapidly growing into a major economic powerhouse after joining the World Trade Organization (WTO) in 2001. However, China's rise was controversial, with accusations of exploiting the system through intellectual property theft and maintaining unfair advantages via state subsidies and enterprises. China became the world’s factory, providing the resources and eventually the technology to fuel its global ambitions.

China's rise was driven by strategic state intervention focused on moving up the value chain into advanced industries like technology, aerospace, and renewable energy. China has cornered the solar market and is increasingly growing its market share in the wind and electric vehicle (EV) markets. The Belt and Road Initiative (BRI), launched in 2013, further extended China's influence by developing trade routes and infrastructure across Asia, Europe, and Africa. China also emerged as a leader in high-tech industries, with companies like Huawei and Alibaba competing globally. Distracted by the war on terror and the 2008 financial crisis, the US was slow to respond as China increasingly dominated strategic markets the US had allowed to move offshore. China’s growing economic clout has provided vast resources for its military.

In real terms, China’s military budget has grown from $46bn in 2000 to $298bn in 2022, according to the Stockholm International Peace Research Institute. This translates to Chinese military spending being 9% of US spending in 2000 and 37% in 2022. It is likely Chinese spending is even higher and continues to grow. Combining this large number with low production costs and being the world’s manufacturing centre provides a formidable and growing military capability. Further, Chinese geopolitical interests are centred in Southeast Asia, whereas American interests are global. The US is increasingly spread thin as new events continuously demand US attention.

Simultaneously, Russia has re-emerged as a great power under Vladimir Putin, seeking to reclaim the territory and prestige it held during the Soviet era. Russia's military interventions in Ukraine and Syria, along with a bogeyman-like role attempting to undermine Western democracies through cyber warfare and non-state actors, marked a return to the global stage. Resentment of the US-led unipolar world order had long simmered in Russia, which feels entitled to its own sphere of influence.

Putin's foreign policy has challenged the US-dominated international order and re-established Russia as a major global player. This has been pursued through a combination of military modernisation and the weaponisation of energy resources. The annexation of Crimea in 2014 and the conflict in eastern Ukraine further underscored Russia's assertive foreign policy. Russia’s actions in Ukraine and its broader strategy to reassert its influence in the post-Soviet space challenge the US-led international order and highlight the complexities of the current multipolar world.

The introduction of a multipolar system brought a bitter taste to European leaders like Emmanuel Macron, who had championed the idea of European strategic autonomy. Macron's vision for a multipolar world materialised to bear bitter fruit: renewed conflict on the continent. Strategic autonomy advocates for a more independent EU role in global affairs, aligning with a multipolar world view and reducing reliance on US leadership. The war in Ukraine presented a clear contest to this idea, where the EU was found wanting. To the disappointment of the Eastern European states, the two primary EU powers, France and Germany, were reluctant and slow to react. Instead, they followed US and UK leadership.

Despite this setback, efforts to progress European strategic autonomy continue. The strategy pertains to the EU's effort to gain greater independence in defence, security, technology, and economic policy, reducing reliance on the United States. This initiative includes the development of defence capabilities through the Permanent Structured Cooperation (PESCO) and the European Defence Fund (EDF), which has $8 billion in funding to enhance the EU’s military readiness. The EU also aims to assert economic independence by diversifying trade relationships and reducing reliance on non-European tech giants through initiatives like the General Data Protection Regulation (GDPR) and the Gaia-X cloud project. The European Green Deal further supports this autonomy by promoting renewable energy and aiming for climate neutrality by 2050.

However, this push faces challenges due to diverging interests among EU member states. Eastern European countries such as Poland prefer to rely on the US for defence, viewing NATO as more dependable than EU-led efforts by France and Germany. This creates friction within the EU, as these countries fear that EU initiatives might weaken NATO or signal a diminished commitment to the transatlantic alliance. These internal divisions slow decision-making and limit the EU’s ability to act as a unified global power. In contrast, CANZUK offers a more flexible alliance among Canada, Australia, New Zealand, and the United Kingdom, allowing for cooperation without extensive institutional integration. While the EU seeks to build a strong, integrated bloc, CANZUK proposes an alternative model for influence that complements existing alliances like NATO.

The Multipolar World and the Role of CANZUK

Other nations such as India, Japan, Turkey, the Arab states, and Iran have also emerged as regional power brokers as their economic and military capabilities grow. These states all have their own interests and ambitions, often in conflict with those of the United States, which can no longer enforce its will as it was previously able to. We have arrived at a new era of great power competition.

In this context, CANZUK has re-emerged as a foreign policy tool of the 21st century. The world has become less stable and more dangerous. The CANZUK nations are not able to individually promote their interests at the top tier of geopolitics. They are demographically, economically, and militarily too small. What is the next best thing to being a large country? Four medium-sized countries. With a combined GDP of almost $7 trillion, military spending of over $130bn, and a population of over 140 million, CANZUK is an economic, technological, military, and diplomatic powerhouse. By size, it is the largest entity on earth. That economic and military strength provides member states with global influence.

CANZUK offers a geopolitical strategy to enhance stability in an increasingly dangerous world. The populations of these four democracies share a common culture and worldview. This allows CANZUK to operate and respond to global events in a synchronised manner without the need for overbearing combined institutions. The CANZUK nations depend on maritime trade to ensure prosperity and are champions of maintaining the world order. These four equal and independent nations are strong standing together, and better able to face the challenges we face.

Britain must navigate complex international relations, an endeavour that results in improved outcomes when perceived as a global power. The relationship with China is a prime example. China has become a primary economic actor and does not perceive Britain as a peer. China has broken the Sino-British joint declaration that secured Hong Kong freedoms for 50 years post-handover. British protestation is seen as an annoyance as the power imbalance is so large. Likewise, in response to Australian calls for an inquiry into the origins of Covid-19, China issued a list of demands that would curtail Australian political freedoms and implemented punitive sanctions on our Aussie cousins. China views us as small countries who should kowtow to Chinese demands and remain silent. The largest political entity on earth is not something that can be ignored, particularly when it contains a large quantity of the world’s natural resources and a formidable military.

Similarly, when we interact with other powers such as Russia, the EU, India, and yes, even the US, we are not interacting from a position of strength. Yes, we are still a strongly influential country. But we do not have the scale required; all of these entities are power blocs of hundreds of millions, or even over a billion people. Britain is not a bloc, while CANZUK is.

As a permanent member of the Security Council, the UK maintains its veto. Our competitors have grown stronger, and it is increasingly difficult to justify why the UK has this status and other countries, such as India, do not. France can act as the representative of the EU, while the UK can share its position with CANZUK. The UK is no longer a power fitting of this status; it has limited ability to act in this capacity. This is not something we need to weep over. This may be difficult to admit, but it is not the end of the story; we need to assess the options Britain has and make the most of them. Keep calm and carry on. CANZUK does have the authority of a global power, if we get about implementing it.

Admittedly, CANZUK is not a panacea. Being spread globally, the bloc has a lack of logistics; it must simultaneously compete with Russia in the Arctic, China in South-East Asia, and the difficulties of defending maritime free trade. But CANZUK or no, these are all difficulties that the individual member states already face, and it is better to do so together. They are also far from each other. However, advances in communications and transport technology have largely but not entirely eliminated this gap. Communications are now instant and a flight from London to Sydney takes a day. While in 1945 a flight would take 4 to 7 days, and travelling by sea, which was the more affordable option for most people, could take 6 weeks. The distance is still far, but technology has made the world much smaller.

The US-led order allowed Britain to spend money on butter rather than guns, and suited our national interest. Unfortunately, the world has changed, and we must have a realpolitik comprehensive security, foreign policy, and economic strategy to meet the challenges of the 21st century. CANZUK offers a part of that strategy. So far, there have been limited steps to create a formalised CANZUK alliance; aside from the 2021 Canadian Tory manifesto, there have been no serious political proposals across the CANZUK nations. It is imperative that government proposes multilateral initiatives to create a formalised CANZUK alliance. CANZUK is the natural place for the UK to secure its interests.

Connor Mason

Guest contributor