The US and 11 other Pacific Rim countries just inked a major trade deal.
PSST...WHAT'S THE PACIFIC RIM?
Countries that border the Pacific Ocean. Minus China. More on that later.
WHY SHOULD I CARE ABOUT THIS DEAL?
Because it opens up trade between countries that produce almost half of the world's goods and services. Because its impact on the global economy could be a BFD.
NICE. SOUNDS EASY AS PIE.
Dramatic pie. Trade deals don't get done over a few FaceTime convos. This one is years in the making. The final details got hammered out over five all-nighters in an Atlanta, GA hotel. Each of the 12 countries had somebody repping all the industries on the table (think: retail, autos, pharma). The whole deal got delayed because of, per usual, a standoff between the dairy negotiators.
SO WHAT'S IN THE DEAL?
Lower tariffs so that it's cheaper for the 12 countries to buy each other's goods. It also sets new environmental and labor standards, and makes it easier for service industries (think: finance) to do business across borders.
Autos...as in Japan's all revved up. The deal makes it easier for it to buy car parts from other Asian countries, and cheaper for them to ship those cars to be sold in US.
Biotech...as in the US is drugging everyone. This deal protects biologics (think: complex drugs like vaccines) from copycats (think: generic drugs) for up to eight years.
Dairy...as in New Zealand farmers are milking it. They'll now be able to say 'cheese' abroad, and send dairy products to countries like Canada and the US, mostly tax-free.
WHAT ABOUT CHINA?
Not included. The deal is seen as a way to stop China from being in control in the region. But it also leaves the door open for China to join later if it gets FOMO.
Congress still has to give it the thumbs up. And since Congress just looooves giving the thumbs up, that should be really easy.
WHAT ARE PEOPLE SAYING?
The White House says this deal will be a game-changer for the US economy by opening up the Pacific Rim to American goods. A lot of Democrats in Congress are saying, 'but there's a trade-off' -- this deal will hurt US workers by sending jobs overseas. Meanwhile, Republicans in Congress are playing the silent game. They are pro-free trade, but they don't want to be seen giving President Obama a pat on the back ahead of the 2016 election. Decisions, decisions.
This is the world's biggest trade deal in decades, and one that Obama would like to file under 'legacy.' He just has to get his friends in Congress to agree.