The 2026 World Economic Forum’s Global Risks Report ranks armed conflict and geopolitical confrontation as the most severe near-term risks facing the world. The reason is simple: American hegemony is no longer dependable, and every assumption that has underpinned our working lives is now in play. Trade architecture, alliance commitments, supply chain security, the value of a rules-based order itself. These are no longer someone else’s problems. They are ours. This week’s essay proposes a new democratic bloc of five nations. It’s the longest piece I’ve published. I think it’s also one of the most important.
Contents
On 20 January 2026, the Prime Minister of Canada told the World Economic Forum that the rules-based international order is dead. Mark Carney did not hedge, or suggest it was under strain, or facing challenges, or in need of reform. He said it was over.
“We are in the midst of a rupture, not a transition,” Carney told the room in Davos. “The beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints.”
The diagnosis was familiar. Who was delivering it was not. A sitting leader of a G7 nation, four days after signing a strategic partnership with Beijing, standing before the assembled elite of global capitalism and declaring that the order they built no longer functions.
Carney borrowed from Václav Havel’s essay on communist Czechoslovakia: the shopkeeper who places a sign in his window every morning – “Workers of the world, unite!” – not because he believes it, but because everyone else does the same.
“Friends,” Carney said, “it is time for companies and countries to take their signs down.” Trump had announced tariffs on eight European nations two days earlier as punishment for deploying troops to a Danish military exercise in Greenland. The United Kingdom was among them, despite having nothing to do with Greenland. Denmark had officially classified the United States as a threat to national security.
Carney argued middle powers must coordinate or be consumed. “When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what’s offered. We compete with each other to be the most accommodating. This is not sovereignty. It’s the performance of sovereignty while accepting subordination.”
He proposed bridging the Trans-Pacific Partnership and the European Union into a trading bloc of 1.5 billion people. Not a grand alliance. A web of agreements among those who agree. And he named the alternative: “If we’re not at the table, we’re on the menu.”
A day later, Trump made the terms explicit. NATO could support American acquisition of Greenland: “You can say yes, and we will be very appreciative. Or you can say, ‘No,’ and we will remember.”
Trump retreated soon after, ruling out force, withdrawing the tariffs, claiming a deal that did not exist. The reversal changed nothing. Denmark had already named America a threat. That bell could not be un-rung.
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Coalitions of the willing, Carney called them. The question is: willing to do what, and with whom?
The five nations best positioned to answer have never sat in the same room as a bloc. They share no founding treaty, no secretariat, no anthem. What they share is more useful: systems that already work together.
Singapore, Canada, Australia, New Zealand, the United Kingdom. Common law. Westminster parliaments. Four of five inside Five Eyes. Regulatory regimes that recognise each other’s courts, contracts, and credentials. Migration systems still capable of renewal, in contrast to Europe, Japan, and China, whose demographic advantages are already spent.
Together, they constitute 7.5 percent of global output. Two of the world’s top five financial centres. The critical minerals, energy, and food that great powers cannot secure without dependence on rivals.
Singapore is what makes this more than an Anglosphere reunion. A city-state astride the Malacca Strait, through which a quarter of global trade passes, it anchors the bloc in Asia and transforms its strategic weight.1
The colonial nostalgia objection should be named early, because it will be raised. Four predominantly white Commonwealth nations plus an Asian city-state looks, at first read, like the Anglosphere with a fig leaf. But the compatibility of five of the world’s most successful multicultural democracies here is institutional, not ancestral: common law, mutual recognition of contracts, courts that enforce each other’s judgments. SCANZUK is a commonsense path to what Carney described: a grouping capable of acting when the hegemon will not, and resisting when it turns predator.
America Turns
In 416 BC, Athenian envoys arrived at the island of Melos with a proposition. The Melians had harmed no one. They asked only to remain neutral. But the Athenians weren’t there to negotiate. They were closing the deal: “The strong do what they can, and the weak suffer what they must.”
The Melians were massacred. Every man of military age executed, every woman and child enslaved. Less than a generation earlier, Athens had led the coalition that broke the Persians at Salamis and Plataea, the champion of Greek freedom. By 416, it was the Tyrant City. Thucydides, an Athenian himself, recorded the transformation as only an exile could.
Facing annihilation, the Melians warned: “Your own fall would be visited by the most terrible vengeance and would be an example to the world.” Athens scoffed. Within a decade, drunk on its own logic, it launched the Sicilian Expedition, a catastrophic overreach from which Athenian power never recovered.
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Article 5 of the NATO treaty has been invoked once. Not by Washington summoning its allies to war, but by the allies themselves, on the morning of September 12, 2001, pledging to defend the United States. Danish frigates deployed to the Gulf. Australian soldiers died in Kandahar. The compact that held for seventy years was brutally simple: The nations that bled for America would be repaid with protection.
Trump’s complaint that allies free-rode on American power has merit. European defence budgets atrophied for decades. But the remedy he proposes does not rebuild burden-sharing. It destroys the trust that makes coordination possible. Abandoning allies and coercing them are not the same thing as demanding they spend more, even if the rhetoric conflates all three.
For the first time since 1945, a European ally has named America a danger. The Danes, remember, lost more soldiers per capita in Afghanistan than any other coalition partner.
The November 2025 National Security Strategy formalised the turn.2 Anne Applebaum called it “a suicide note for American hegemony.”3 It writes off Europe as a dying civilisation: “cratering birthrates,” potentially “unrecognisable in 20 years,” perhaps too weak to remain a “reliable ally.” Russia, meanwhile, appears as a partner to be wooed. North Korea goes unmentioned.
The post-war order itself now stands accused. At his confirmation hearing, Secretary of State Marco Rubio delivered the indictment: “We welcomed the Chinese Communist Party into this global order. They took its benefits but ignored its obligations. Instead, they have lied, cheated, hacked, and stolen their way to superpower status – at our expense.” The post-war order, Rubio concluded, was “not just obsolete” but “a weapon being used against us.”
Beijing and Washington now agree: the system America built must go. Trump no longer wishes to uphold it. Xi never accepted its constraints.
This is not one man’s aberration. The shift is embedded in Congress, the courts, and a generation of staffers who will shape American foreign policy for decades. Future Democratic administrations will govern within constraints this realignment has set. Allies cannot plan on four-year cycles. They must plan as if the turn is permanent, because it may be.
Canada has developed military contingency plans for an American invasion. A sentence that would have read as satire three years ago is now operational planning.
A Distinctly European Paralysis
The European Union cannot manufacture artillery shells as fast as Ukraine fires them. Four hundred and fifty million people, a combined GDP larger than China’s, and the bloc cannot keep one medium-sized democracy supplied with ammunition while it bleeds to defend the continent’s eastern frontier. Europe once measured its power in legions and fleets. Now it measures it in PowerPoint slides about procurement reform.
Germany announced a Zeitenwende after Russia invaded: a turning point, €100 billion for defence. Then Berlin discovered its procurement system could not convert euros into equipment. The Bundeswehr had been, in the memorable phrase of one inspector general, “basically bare.” It remains so. Factories closed in the 1990s did not reopen. Workers who retired did not return. An industrial base Europe spent three decades dismantling on the assumption that history had ended and the Americans would handle the rough stuff.
Trump now demands NATO members spend five percent of GDP on defence: $1.9 trillion in additional annual spending across the alliance. Leave aside whether the political will exists. The capacity does not. You cannot buy divisions that were never raised or manufacture artillery shells on production lines sold for scrap.
Even if the capacity existed, unanimity rules hand Viktor Orbán – Putin’s most fervent European admirer – an effective veto over EU foreign policy. Hungary, a nation of ten million people, can paralyse a bloc of four hundred and fifty million with a single objection. This is not a design flaw. It is the design.
Even a rearmed Europe would be absorbed by its eastern flank for a generation. Poland, the Baltics, Finland, and Sweden are now frontline states, spending and arming while Berlin deliberates. Germany’s ambition to build “Europe’s strongest conventional army” is about defending the Oder, not projecting power into the Pacific. France still styles itself a global power, but its single aircraft carrier spends more time in refit than at sea.
Europe will remain what it has become: a continent that writes rules for others and cannot enforce its own. It will lecture the world on principle while outsourcing the defence of those principles to others. The continent that once carved up the globe can no longer secure its own borders.
China
The bet was simple: trade would liberalise China. In 2001, Washington welcomed Beijing into the World Trade Organization expecting trade to do what diplomacy had not. The opposite occurred. Prosperity funded the largest military buildup since the Cold War, technological self-sufficiency the West still hasn’t grasped, and geopolitical ambition the liberal order was never built to absorb.
China’s military budget has grown more than five-fold in twenty years.4 The People’s Liberation Army Navy now operates more ships than the US Navy – roughly 370 vessels versus just under 300 American ships.5 The Pacific is now contested water. Beijing has converted reefs into missile batteries and airstrips. Fishing fleets operate as maritime militia, and neighbours from Vietnam to the Philippines face coordinated coercion designed to establish facts on the water faster than diplomacy can reverse them.
Australia learned the price of defiance in 2020. After Canberra called for an independent inquiry into COVID-19’s origins, Beijing imposed $20 billion in coordinated sanctions. The punishment was designed less to hurt Australia than to instruct others.6
China now controls most of the chokepoints of twenty-first-century power: critical-mineral refining, rare-earth magnet processing, battery and solar supply chains. It accounts for close to 30 percent of global manufacturing output.7 Beijing dominates active pharmaceutical ingredients, drone manufacturing, electric vehicles, and upstream semiconductor inputs.
This dominance may not last. A slowing economy and demographic decline may make Beijing more unpredictable. Xi has tied his legitimacy to national rejuvenation and territorial consolidation – goals that grow more urgent as relative power peaks. Declining powers with unfinished business are not cautious. China does not need to invade Taiwan. It only needs to convince Taipei and Washington that resistance is futile.
The Indo-Pacific is now the centre of global tension, and the West’s architecture remains too narrow to contest it. AUKUS will deliver submarines, eventually. The Quad convenes four democracies, one of which will not commit. Every major institution was built for a world that assumed China would be integrated into the liberal order, not challenge it as a peer. Middle powers are left to navigate the gap alone.
Why SCANZUK Makes Sense
The assumption embedded in most strategic commentary is that middle powers must choose: align with Washington or accommodate Beijing.
I am not sure that is true. In 2017, I helped write the speech the Australian Prime Minister delivered at the Shangri-La Dialogue, making the case that the rules-based order would hold, that America’s leadership was generous and enduring, that China could be accommodated within it. The speech even cited Thucydides on the same Athenian proposition, arguing that Washington had resisted the temptation to behave as Athens did at Melos. Every major assumption in that address has since been overturned. The lesson is not that alliances fail. It is that by the time you realise yours is failing, the window for alternatives has already begun to close.
The question is whether the alternative already exists without anyone having named it. Five democracies already share more institutional infrastructure than most formal alliances ever achieve. A contract drafted in London requires no translation in Singapore. An engineer certified in Auckland can practice in Sydney without re-qualifying. These nations did not set out to build an alliance. They simply built systems that work the same way, and now find themselves, by accident of history, holding compatible keys to the same locks.
Combined, these five nations account for $8 trillion in GDP, larger than Japan, larger than India, fourth only to the United States, China, and the European Union. Two of the world’s top five financial centres. The minerals and energy that underpin the industries of the future. And a presence across the Atlantic, Pacific, and Indian oceans that no other democratic grouping can match.
The architecture exists, it lacks only a name.
Why these Five Nations?
The objection is obvious. What about Japan, South Korea, India? What about ASEAN or the Quad?
Start with ASEAN. Ten nations, 700 million people, and a structural allergy to decisions of any kind. The bloc operates by consensus, which means Cambodia and Laos, Chinese client states, hold effective vetoes over any action Beijing dislikes. ASEAN has spent sixty years perfecting the art of meeting without deciding. On this measure, at least, it has been a resounding success.
The Quad is more serious but less than it appears. Australia, India, Japan, the United States: four democracies, one of them non-aligned by doctrine. India will coordinate on maritime security but will not bind itself. New Delhi’s strategic tradition runs from Nehru through the Cold War to the present: partnership with all, commitment to none. Beijing dismisses the grouping as “sea foam.”8 On present evidence, the metaphor holds.
Japan and South Korea are genuine democracies with serious militaries. Their exclusion is not oversight.
Both sit on the First Island Chain, directly in Beijing’s sights, shielded by the American nuclear umbrella as the foundation of their defence. They are not allies in the way Australia or Canada are allies. They are forward operating bases for a confrontation already underway. Japan’s constitutional constraints and Korea’s peninsular exposure permit far less room for manoeuvre than geography alone suggests. Include Tokyo and Seoul, and SCANZUK ceases to be a resilience bloc. It becomes a containment alliance, foreclosing Singapore’s participation and alarming the wider region.
SCANZUK works precisely because it is narrow enough to function. Common law, Westminster traditions, English as an administrative language, courts that recognise each other’s judgments, militaries that already interoperate. Japan and Korea are essential partners. SCANZUK would coordinate closely with both through existing channels. But they are partners, not members. A stronger SCANZUK serves their interests precisely because it does not target Beijing.
Why Singapore Matters
Without Singapore, this is an Anglosphere reunion – four nations bound by history and sentiment, none of them in Asia.
Singapore transforms the proposition, commanding the chokepoint that matters most. Eighty percent of China’s oil imports transit the Malacca Strait. Singapore’s port capacity is expanding toward 65 million containers annually.9 Its financial centre has absorbed much of the business that once flowed through Hong Kong.
The objection writes itself: Singapore will never formally align against Beijing.10 This is true. It is also beside the point.
Singapore’s survival has depended on refusing to choose sides, maintaining access to Chinese markets while preserving security ties with Washington. SCANZUK does not require Singapore to abandon this posture. It offers something more valuable: optionality in a world where options are narrowing.
The integration already runs deeper than most recognise. The Five Power Defence Arrangements have linked Singapore to the UK, Australia, and New Zealand since 1971. Digital economy agreements with all four partners are signed or in progress. Intelligence cooperation is habitual. Singapore is not being asked to join something new. It is being asked to name what already exists.
Here is the sticking point. Naming it may be precisely what Singapore refuses to do. Lee Hsien Loong and now Lawrence Wong have built a national strategy around deliberate ambiguity, and a formal grouping that includes four Five Eyes members is unlikely to be advertised on billboards in Raffles Place.
SCANZUK is flexible by design. Trade alignment here, regulatory coordination there, deeper security ties if Beijing’s behaviour makes hedging untenable. Singapore’s leaders have spent decades building exactly this kind of layered engagement. The framework fits the instinct. Formalisation can wait for a crisis that makes hedging impossible. But the structure must exist before it comes, not be improvised under fire.
The Resources the Free World Needs
Strategic geography is only half the equation. The other half is geology.
China dominates rare earth processing and has spent two decades locking up supply chains across Africa, Latin America, and Southeast Asia. When Beijing banned rare earth exports to Japan in 2010, Toyota discovered it could not build cars without Chinese magnets. The company had been blind to the geopolitical risk until the supply stopped.
Australia and Canada together hold the largest reserves outside Chinese control of lithium, cobalt, rare earths, uranium, nickel, and copper – the materials required for batteries, semiconductors, and advanced weapons systems. The geology cannot be moved. Processing capacity can be built, and both countries are building it.
Energy runs in the same direction. Canadian hydroelectric capacity and natural gas. Australian LNG and the world’s largest uranium reserves. UK offshore wind and North Sea production. Alone among advanced-economy blocs, SCANZUK would be a net energy exporter; beholden to no one for the power to keep the lights on. And then there is food. Australia, Canada, and New Zealand feed nations that cannot feed themselves. Wheat, beef, dairy, barley: agricultural exports that become strategic assets the moment supply chains fracture.
SCANZUK would be the only mid-sized democratic bloc able to withstand Chinese economic retaliation without paralysing its own industries. It could supply Europe without relying on Russian energy and build defence systems without depending on Chinese rare earths.
What SCANZUK is Not
The European Union took sixty years to build a bureaucracy that cannot agree on ammunition supplies for a war on its own border. SCANZUK should learn from the failure.
No parliament. No commission. No flag. The model is CER: the Closer Economic Relations agreement between Australia and New Zealand that has operated since 1983 without crisis, without renegotiation, and without attracting much attention. A small secretariat overseeing issue-specific coordination. Sovereignty intact.
A doctor trained in Toronto could practice in Auckland. A startup founded in Sydney could incorporate in London without lawyers in both jurisdictions. The cost would be trivial. A CER-style secretariat runs on tens of millions a year. Australia will spend $368 billion on submarines. The barrier is not money. It is the inability of political systems to imagine cooperation without bureaucracy.
SCANZUK is not an alternative to the American alliance. The treaties remain. What changes is the assumption that Washington will honour them. Trump demands allies take primary responsibility for their own security. SCANZUK takes him at his word.
American strategists should welcome this rather than resist it. A coordinated bloc of democratic middle powers – sharing intelligence, aligning defence procurement, securing critical mineral supply chains – serves American interests directly. It creates capable partners who can hold ground in the Indo-Pacific without requiring permanent American overextension.
This is the burden-sharing arrangement Washington has demanded for decades, emerging from institutional compatibility rather than treaty negotiation. The alternative is a patchwork of bilateral dependencies, each vulnerable to the threat of abandonment that Trump has made explicit.
The Case for Acting Now
The arguments against SCANZUK are variations on a single theme: the world will remain as it is.
It will not. Washington has threatened to annex territory from a NATO ally. Beijing has imposed $20 billion in sanctions on a democracy for asking questions about a pandemic. Europe has proved unable to supply a war on its own doorstep. The ground has already shifted. SCANZUK is not a proposal for a different world. It is a response to the world that now exists.
The obvious counter deserves an honest answer: these five nations have managed perfectly well without a formal bloc for decades. Why now? Because the order that made informal coordination sufficient is the order that just ended.
Middle powers have spent three generations as passengers in an American-led order. That order is ending. The Melians believed neutrality would protect them. The Athenians believed their power would last forever. Both were wrong.
The choice is between shaping the world that is coming, and adapting, one concession at a time, to great powers that have quietly agreed freedom is a tradable asset.
We’d love to hear your thoughts – email luke@bwdstrategic.com or message him on LinkedIn if you’d like to continue the conversation.
About the Author
Luke Heilbuth is CEO of sustainability strategy consultancy BWD Strategic, and a former Australian diplomat.