The Trans-Pacific Partnership is a complex trade deal that would eliminate many tariffs placed on U.S. goods by foreign countries. If it were to pass, it would be a good thing for whiskey lovers.
Think of the whiskey industry like a bubble. While the bourbon and American whiskey we love has been succeeding for years, in order to further grow they need more customers. For every bottle of Booker’s, there are a bunch of bottles of Jim Beam White Label that fund Beam Suntory’s longer wait to bottle that product — we need more people drinking the younger stuff. And while whiskey drinkers abound in developing markets in the Pacific, the problem is they can’t afford our booze.
But with the Trans-Pacific Partnership deal, import duties on spirits “of up to 45 percent would be slashed under the agreement between the U.S. and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam,” according to the Associated Press.
The smaller, but still significant, matter here is that prices for Canadian, Japanese, and other foreign whiskies would also be reduced. That’s not going to have a major impact on the cost of Japanese whisky — which is in constantly high demand because of a relatively small supply.
But it does mean that American whiskey will have a much larger market overseas, and that’s a benefit for us folks at home. More overseas buyers of popular products translates to a cash infusion for the distilleries you love. And cash infusion means they can increase production, which means that down the line we’ll have fewer shortages and larger stocks of old and rare whisky available for purchase.
The Trans-Pacific Partnership might even artificially stave off an oncoming bubble in the bourbon industry, which some are concerned about.
Whether the Trans-Pacific Partnership is a good deal for the country (and economy) as a whole is a more complicated issue. Some argue that cheaper labor in other countries involved in the deal will simply undermine American manufacturing. President Obama continues to push for the deal, even as both presidential candidates criticize it from the campaign trail.
But United States Trade Representative Michael Froman told the Associated Press that 80 percent of goods imported from the TPP countries are already duty free and that the applied tariff is 1.5 percent. "So if we're going from 1.5 percent to zero, and the rest of the world is going 70 percent to zero, that's a pretty good deal," he said.
So to recap: more of our booze sells, the booze we buy is slightly cheaper, and there’s more whiskey down the road. I wish all of my econ classes had been this simple.
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