Which side of the ‘splinternet’ will Canada pick?

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As Prime Minister Justin Trudeau struggles with the question of whether to allow Chinese telecom company Huawei into next-generation data networks, political-risk guru Ian Bremmer has a warning: The world’s technological infrastructure is about to be split in two, and Canada’s economic interests are on the U.S. side.

The decision on Huawei and 5G networks is one of the most controversial and consequential decisions Mr. Trudeau’s Liberal government faces in 2020. But Mr. Bremmer, the president and founder of the Eurasia Group, says Canada has to look ahead to a world where there are two competing standards for technology: one built on U.S. architecture and one controlled by the Chinese.

For Canada, that turns the 5G question upside down.

Usually, it is framed as a choice between Canada’s U.S. security partner and its growing trade interests with China. Beijing sees Huawei as a national economic champion and warns that countries that bar it from their next-generation 5G networks will face consequences. The U.S. sees Huawei as a security risk that can be manipulated by the Chinese state and warns that countries that allow Huawei equipment into their 5G networks will be open to spying – and that may mean the U.S. stops sharing intelligence.

Mr. Bremmer, who came to Canada last week to deliver the keynote at the Canadian Chamber of Commerce’s Canada 360 Economic Summit, argues that’s not the real choice.

He doesn’t think the U.S. will cut off security co-operation or punish Canada if it does what Britain did last week and announces that there will be some place for Huawei in its 5G network, but not in what is known as the “core.”

“But I do think that the future of technology, the future of data, the future of the internet of things – everything with a chip in it – is going to be split in in two. And if your economy happens to be overwhelmingly aligned with that of the United States, the idea that you would take your tech standards for the most important future industries and actually align that with China – that’s just an incredibly costly thing to do.

“There are so many ways that that would be a mistake.”

His view depends on the deepening of the so-called “splinternet” trend, where competing technology platforms are developed along geopolitical lines. Beijing wants to control data, but its trade war with the United States has reminded China that it is still reliant on U.S. technologies and equipment. China has pushed forward its own technology champions as a strategic goal. Mr. Bremmer says he believes the architecture of technology will be split along two systems. So he essentially argues that Canada should employ some strategic protectionism.

It’s worth noting that Mr. Bremmer is not a China hawk. His advice to Canada has usually been to try to expand commercial ties with China.

He argues we now live in a “G-Zero” world where the U.S. no longer provides global leadership but no other country can, either. He has written that countries can hedge between the U.S. and China so that they are not overly dependent on either; he calls them pivot states. In 2012, he argued Canada was on its way to becoming a pivot state by diversifying its trade and investment ties, including selling energy to China.

Many Canadians might think that sounds optimistic in 2020, when it feels like it is a stuck state, unable to pivot. The U.S. asked Canada to arrest Huawei chief financial officer Meng Wanzhou for extradition, and China jailed two Canadians in retaliation. Canada was bullied into renegotiating the North American free-trade agreement, but China applies capricious trade restrictions.

Mr. Bremmer still says Canada can act as a pivot state, expanding trade and bringing in Chinese students and exchanging high-tech workers in ways that “take advantage of not being the United States.”

But now he says he doesn’t think Canada will be able to pivot on tech. In 2012, the internet looked like a communications revolution. Now we know it is a data revolution and that it will be shaped “top-down” by government.

“That really makes it incumbent on the Canadians to recognize that on that it has much more to do with where there economy is, and is not, integrated,” he said. “And China is a tiny shadow compared to the United States on pretty much every aspect of the Canadian economy.”