The Minilateral Challenge for Middle Powers
The post-WWII international order has given way to the contemporary international order interregnum. This lacuna in a well-defined international order increasingly features minilateral arrangements. Minilaterals are selective, issue-specific coalitions operating outside traditional multilateral frameworks. For middle powers, characterized by moderate capabilities and reliance on rules-based international cooperation, this shift requires fundamental strategic reassessment.
Canada exemplifies the middle power dilemma of maintaining effective international influence while managing asymmetric relationships with great powers. This task has become more daunting compared to the 1990s in which Canada was relatively a large power. Today, with what Fareed Zakaria calls the rise of the rest, Canada is a much less significant power compared to China, India, Indonesia, Nigeria, and many other states that have grown significantly and comprehensively. In tandem with the rise of the rest, great power competition has returned and those powers, including Canada’s enduring partner the US, are now using their comprehensive power to shape the behavior of allies, friends and foes alike to outcompete authoritarian China, the foremost strategic competitor capable of rivaling US global power.
In this context, the theoretical framework of the prisoners’ dilemma illuminates why middle powers often fail to cooperate effectively despite shared interests in constraining great power unilateralism.
The Collective Action Problem
Middle powers face a classic collective action problem when confronting great power pressure. Individual defection often appears more rational than collective resistance, particularly when facing potential economic retaliation. This dynamic has been observable in middle power responses to unilateral trade measures by the Trump 2.0 administration, where bilateral accommodation frequently supersedes multilateral coordination. To illustrate, the EU, South Korea, Japan, the Philippines, and Vietnam have all signed trade agreements with the US instead of banding together.
Structural Constraints on Middle Power Cooperation
The fundamental asymmetry between great powers and middle powers creates structural impediments to effective coalition formation. When faced with potential economic or security consequences, middle powers often prioritize bilateral relationships over collective action. This pattern reflects rational calculation under conditions of power disparity rather than failures of diplomatic coordination.
Trade-dependent middle powers face vulnerabilities that complicate coalition formation. Canada’s integrated North American economy, Japan and South Korea’s reliance on export markets, Australia’s commodity dependencies, and the EU’s complex trade relationships all create bilateral pressures that can and did override multilateral solidarity.
Alliance relationships further complicate middle power coordination. Security dependencies often take precedence over economic coordination, creating hierarchies of interest that fragment potential middle power coalitions. Canada’s NATO and NORAD commitments, Japan and South Korea’s alliance structures, and Australia’s security partnerships illustrate how security imperatives can constrain economic policy coordination.
The Minilateral Alternative: Opportunities and Limitations
Minilateral frameworks offer middle powers opportunities for influence in specialized domains. Canada’s Arctic governance expertise, Japan’s technological capabilities, South Korea’s manufacturing strengths, Australia’s resource endowments, India’s market size, and the EU’s regulatory capacity provide foundations for issue-specific leadership.
Can middle powers articulate their role as an asset to this White House and future White Houses that are unlikely to roll back tariffs or will they continue to be seen as a liability? Another important question is whether they want to be at the table shaping a new global trading and security regime to ensure that any new order that emerges benefits states with shared interests instead of being an international order that empowers authoritarian states with clear interest in diluting the interests and power of the US and its allies?
If the choices is affirmative for these questions, minilateral groupings can reduce the transaction costs of cooperation compared to universal multilateral forums that have been fractured by China, Russia, and up to now a lesser extent, by the US. However, this efficiency gain must be weighed against reduced bargaining power vis-à-vis great powers. The challenge lies in achieving sufficient scale for influence while maintaining decision-making efficiency.
Minilateral arrangements offer greater flexibility than formal multilateral institutions. This adaptability can benefit middle powers seeking to navigate between competing great power demands. However, flexibility also reduces the predictability and enforcement mechanisms that middle powers traditionally rely upon in international affairs.
Middle Power Responses to Trade Pressures
Examining case studies of middle power responses to trade pressures there are several patterns that can be observed including bilateral accommodation patterns and failed coalition attempts and each provides lessons for policy makers as they face at least two great powers willing to utilize their comprehensive power to shape the behaviour of target states.
First, historical patterns demonstrate consistent middle power tendencies toward bilateral accommodation rather than collective resistance when facing trade pressures from great powers. This behavior aligns with prisoners’ dilemma predictions that the immediate costs of resistance appear to outweigh uncertain benefits of coordination.
Second, failed coalition attempts by middle powers in trade negotiations have faced persistent challenges including but not exclusive to information asymmetries regarding negotiating positions, varying economic vulnerabilities and dependencies, different time horizons for economic adjustment and domestic political pressures favoring quick bilateral solutions. This is further complicated by the reality that while on paper democratic middle powers may share the same democratic values and national interests, their actual democracies are functionally and performatively different resulting in different abilities to cooperate with fellow middle powers.
There are many lessons that can be derived from these challenges to help inform policy makers and these experiences suggest that effective middle power coalitions require a clear commitment mechanism to prevent defection, equitable burden-sharing arrangements, transparency in negotiating positions, and domestic political support for multilateral approaches.
To date, none of these have been met as middle powers including Canada faced the Trump 2.0 administration’s tariff ultimatums.
Strategic Options for Canada
First, based on the logic of selective minilateralism, Canada should pursue minilateral engagement in areas of comparative advantage while recognizing the limitations of middle power coalitions. Sustainable and meaningful selective minilateralism means establishing clear priorities based on Canada’s comparative advantages such as Arctic governance and security frameworks, critical minerals cooperation, democratic resilience initiatives, and climate policy coordination. The latter two need to be carefully crafted to neither be focused on cultural issues or aspirational agenda’s that have severely hurt Canada’s credibility on the international stage.
Second, nested institutional approaches may contribute to realizing Canada’s strategic objectives. Rather than viewing minilateral and multilateral frameworks as alternatives, Canada should pursue nested approaches that link issue-specific cooperation to broader institutional frameworks. This can help preserve multilateral principles while enabling practical cooperation. Quad-plus cooperation may be an example of Canada working with existing minilateral partnerships by plugging into their activities.
Third, investment in diplomatic, analytical, and technical capabilities can enhance Canada’s effectiveness in minilateral settings. As with nested institutional approaches, here Canada needs to focus on specialized expertise in priority issue areas, enhanced analytical capacity for complex negotiations, and strengthened coordination mechanisms across government.
Policy Recommendations
First, Canada should maintain realistic expectations about middle power coalition formation, recognizing structural impediments to collective action. Policy planning should account for the likelihood of bilateral defection under pressure. It isn’t an if but when as even closely aligned middle powers are dissuaded from defecting away from their biggest and most important economic and security partner.
Second, Canada needs to focus resources on minilateral initiatives where Ottawa possesses clear comparative advantages and where great power competition is less acute. This selective approach can maximize influence within resource constraints.
Third, Canada needs to focus on institutional innovation and entrepreneurialism. Through developing new frameworks for middle power cooperation that include enforcement mechanisms and commitment devices to overcome collective action problems. This is not easy but it might include formal consultation mechanisms, transparency requirements, graduated response frameworks, and burden-sharing formulas. These need to be established before the next challenge emerges from the US, China, or another actor.
Fourth, domestic capacity building includes the strengthening of domestic consensus for minilateral approaches to reduce pressures for bilateral accommodation. This requires public communication about long-term benefits of cooperation, economic adjustment assistance for affected sectors, and a political coalition building across party lines. Considering the endogenous heterogeneity of the provinces in Canada, a subregional approach such as a “Western Canadian”, “Central Canadian”, an “Arctic Canada”, and an “Atlantic Canada” may be a more effective way to build domestic consensus.
Conclusion
The evolution toward minilateralism presents both opportunities and challenges for middle powers. While specialized cooperation frameworks offer new avenues for influence, the persistent failure of middle powers to sustain coalitions against great power pressure reveals fundamental structural constraints. The prisoners’ dilemma dynamic, whereby individual defection appears rational despite collective costs, continues to fragment middle power cooperation.
Canada’s experience, alongside that of Japan, South Korea, Australia, India, and the EU, suggests that effective middle power strategy requires realistic assessment of coalition possibilities, selective engagement based on comparative advantages, and innovative institutional design to overcome collective action problems. Success in the minilateral era demands not only diplomatic skill but also recognition of the structural realities that shape middle power options in an asymmetric international system.
The challenge for policymakers is to maximize middle power agency within these constraints while building more effective frameworks for cooperation where possible. This requires abandoning illusions about spontaneous middle power solidarity while working systematically to create conditions under which sustained cooperation becomes feasible.
Dr. Stephen Nagy is Professor of Politics and International Studies at the International Christian University. He is serving as a Visiting Fellow for the Hungarian Institute for International Affairs (HIIA) June 13th, -August 30th, 2025 and a Distinguished Fellow at the Distinguished Fellow at the Corvinus Institute for Advanced Studies (CIAS), Corvinus University, Budapest July 2025.
He is currently working on middle-power approaches to great-power competition in the Indo-Pacific. The tentative title for his forthcoming monograph is “Navigating U.S. China Strategic Competition: Japan as an International Adaptor Middle Power.”
The views expressed in this op-ed are the author’s/authors’ own and do not necessarily represent those of the Institute or its staff.
