The U.S. administration’s updated trade agreement with Mexico and Canada shows that a separate deal with China is “possible,” the secretary general of the Organization for Economic Co-Operation and Development (OECD) said Tuesday.
“It’s a victory for the world to see that, even with these trade tensions throughout, it is still possible to continue to cement, to continue to organize and continue to finalize these trade agreements which are going to benefit not only the three countries involved but the whole of the trading system,” Angel Gurria told CNBC’s Charlotte Reed.
Asked whether that could benefit separate negotiations with China, Gurria gave a bullish view: “I hope that it encourages all the parties involved to actually arrive at an understanding and a negotiation with China simply because it shows that it is possible.”
On Sunday, the U.S. and Canada agreed to a deal, called the United States-Mexico-Canada Agreement (USMCA), to replace the North American Free Trade Agreement (NAFTA).
The deal ended tense talks between Washington and Ottawa, and included some key differences to the original NAFTA agreement, like improved access to Canadian markets for U.S. dairy farmers and the requirement that more auto components be built in North America.
The OECD executive highlighted previous trade deals — such as Canada’s Comprehensive Economic and Trade Agreement with the European Union and a revised version of the Trans-Pacific Partnership that excludes the U.S. — as hallmarks of progress in assuring the increased opening up of global trade.
“I would say that concept of open trade… around which we formed the whole of the modern economy is alive and well, and we should, of course, make sure that the trade tensions do not stop the process,” Gurria said.
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