Dan Ciuriak, Director and Principal of Ciuriak Consulting Inc. and a Distinguished Fellow with the Asia Pacific Foundation of Canada, was a featured speaker at the Canada-Viet Nam Forum on Economic Resilience and CPTPP-EU Linkages, an event co-organized by APF Canada, the Ministry of Industry and Trade of Viet Nam, and the Embassy of Canada to Viet Nam in Hanoi on July 20, 2026. 

This paper elaborates on remarks he gave to the audience. A summary report of the Forum’s proceedings can be found here.

The rupture in the international trading system has generated an extraordinary volume of commentary and a new vocabulary: just-in-case rather than just-in-time; de-risking rather than integration; conditional rather than unconditional most-favoured-nation treatment; variable geometry in place of universal multilateralism. The common premise is that the system built during the era of globalization was fundamentally flawed and must be replaced. 

Yet, after the better part of a decade of trade and technology war premised on globalization having gone wrong, three things are observable. 

• Global trade has proved resilient; the trade and tech war is flailing and failing. 
   
• The global factory remains largely intact. To be sure, there is superficial decoupling at the level of final assembly, but this masks continued deep interdependence of supply chains. 
   

The small open economies are rallying around the system rather than abandoning it, using the Multi-Party Interim Appeal Arbitration Arrangement, concluding new agreements on established templates, entering commitments not to weaponize trade, and opening new forums, of which the CPTPP–EU process is potentially the most consequential. 

How can we understand this? 

Globalization was never about trade — it was about production. Its defining feature was not the expansion of trade flows but the emergence of the global factory: an internationally distributed production system organized through value chains that exploit extreme specialization at the firm level to access economies of scale otherwise unattainable. This “global factory” was enabled by technological developments and was already in place before the Uruguay Round got started.

The WTO Agreement can be thought of as the operating system (OS) for this global factory. Countries voted to join the system — tariffs were a nuisance for intermediate-goods trade and were mostly unilaterally eliminated. Trade policy ratified globalization; it did not cause it. 

When the Doha Round failed, the deep and comprehensive free trade agreements (DCFTAs) took over developing the OS and, with the notable exception of the WTO Trade Facilitation Agreement (TFA), did the heavy lifting. 

However, this progress was on a fragmented basis — with EU-style templates, U.S.-style templates, and East Asian versions. We can think of this as analogous to Apple’s IOS vs. Google’s Android vs. Huawei’s HarmonyOS: each does the same work, but each has different APIs (application programming interfaces), causing interoperability issues for participating firms. 

For the overwhelming majority of products and participants, the existing framework still performs its essential function. For a small number of sectors characterized by exceptionally large prospective rents — advanced semiconductors, AI, data, aerospace — rules fail, as outcomes are being determined by power rather than law, as they always have been.

The challenge is therefore not to replace an operating system that governs most of the world economy, but to preserve it, optimize it for the small open economies that truly depend on it, and develop complementary arrangements where it does not reach. Four propositions follow as regards the baseline conditions that set the scene for how to proceed.

Towards Deeper CPTPP-EU Co-operation

The 39 members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union (EU) can move towards a more structured relationship given their mutual interests in preserving rules-based trade as “middle powers” — to use a geopolitical term — and as “small open economies” — to use an economic term — at a time of rupture in the international political and economic system. 

The note is premised on four propositions. 

1. The rules-based system developed for the globalized production system remains relevant for the vast majority of traded products and trading nations.
    
2. The market outcomes in the battleground sectors in which technological change has steeply increased prospective economic rents will not be settled by rules but by the exercise of economic and geopolitical power; by the same token, these sectors need to be hived off from the rest of the global system for trade administration.
    
3. The interregnum during which this contest plays itself out (until the dust in the battleground sectors settles) will feature a stylized structure of a Global North with a vested interest in preserving the rules-based system; a Global South, whose participation in the battleground sectors will run mainly through control of critical commodity inputs into the artificial intelligence (AI) value chain, which provides its membership a path to capture some of the economic rents in the context of a building commodity super-cycle; and two “middle kingdoms” pushed apart by trade barriers but limited in how hard they can push by their own dependence on the global system of production and trade.
    
4. Stewardship of the rules-based order defaults to the EU-CPTPP group; Canada has self-selected into the role of the bridge economy. 
    

This contextual framing leads to several specific recommendations. 

1. Acting as stewards of the rules-based system, the EU-CPTPP membership should use available World Trade Organization (WTO) mechanisms to pursue the development of the structural relationship to ensure it respects WTO norms — in particular, form a “small open economy caucus” in the WTO to advance rule-making and use WTO measures such as the situation complaint to address transgressions and/or structural imbalances. In this context, a small open economy is one that depends disproportionately on international trade for its livelihood and is, by the same token, disproportionately vulnerable to economic coercion.
    
2. Build on the New Zealand-Singapore Agreement on Trade in Essential Supplies (i.e. non-aggression treaty), signed in July 2026, to cauterize the bleeding caused by the U.S.-China weaponization of the system (compromise of the most favoured nation principle, export restrictions, and imposition of barter-like trade deals that harm international competition).  
    
3. Thinking of the WTO-Article XXIV agreement system as an “operating system,” work to incrementally converge the U.S.-based CPTPP governance framework with the EU-FTA-based framework as a friction-reducing exercise, while considering available measures such as cumulation in rules of origin to promote a deepening of mutual trade on a WTO-consistent basis. 
    
4. Use the review of the CPTPP digital economy chapter (Chapter 14) to fill the gap in the WTO framework; this will involve parsing “electronic transmissions” into GATT-governed digital products that are “like” goods; GATS-governed digital products that are “like” services; and data, whose value needs to be explicitly captured in trade accounts and reflected in estimated trade balances; along with measures that enable sovereignty in governance of the digital economy. 
    

Ultimately, the EU-CPTPP “bridge” can promote the development of a market with the scale to compete with China and the U.S. while retaining the perspectives and values of small open economies.