DEFINITION of Pacific Rim
The Pacific Rim refers to the geographic area surrounding the Pacific Ocean. The Pacific Rim covers the western shores of North America and South America, and the shores of Australia, eastern Asia and the islands of the Pacific.
Much of the world's shipping goes through the Pacific region, especially between China and the United States.
Many Pacific Rim countries have rapidly modernized their economies in recent decades, earning the nicknames the Asian tigers, or Asian Dragons (Hong Kong, South Korea, Singapore, and Taiwan) and the tiger cubs (Indonesia, Malaysia, Philippines, Thailand, and Vietnam).
BREAKING DOWN Pacific Rim
"Pacific Rim" is a description of a region, not a group or organization. The Pacific Ocean is the world's largest ocean, so a very large number of countries border it and it can thus be considered part of the region. Among the largest and best-known Pacific Rim countries and economies are China, Australia, and South Korea. The United States, Canada, and Mexico all have Pacific Ocean coastlines and can thus be considered part of the region.
Asian Tigers and Tiger Cubs
The Asian tigers are a group of developed economies that have all experienced high levels of economic growth since the 1960s due to their exports. Hong Kong, South Korea, Singapore, and Taiwan are all free-market economies and have had success with electronic and technology exports. Hong Kong and Singapore are also major financial centers. The four tigers are considered an inspiration for the tiger cubs, which are less advanced but rapidly growing economies. Indonesia, Malaysia, the Philippines, and Thailand are all moving from low-margin exports such as textiles and clothing to higher-margin electronics.
Asian Financial Market Crisis
The 1997 Asian financial market crisis was triggered by a devaluation of the Thai baht after the overheated economy collapsed, especially the highly speculative real estate market. The central bank devalued the currency on July 1, 1997, after repeatedly denying that it would do so. Lending into the region dried up, and investors rapidly withdrew their money. The devaluation coincided with United Kingdom's long-scheduled return of Hong Kong to Chinese rule after 155 years as part of the British Empire. The attendant uncertainty helped to fuel the crisis. The hardest-hit countries included Indonesia, the Philippines, Malaysia, South Korea, and Hong Kong.
A rescue package by the International Monetary Fund included liberalization of capital markets, high domestic interest rates and pegging local currencies to the value of the U.S. dollar. The region returned to strong economic growth within two years.
The Trans-Pacific Partnership (TPP) is a trade deal that was signed on Feb. 4, 2016, in Auckland, New Zealand among 23 Pacific Rim nations; it would have taken effect if all signatory nations ratified it within two years. The agreement aimed to reduce or eliminate a broad range of trade tariffs and was intended to provide a platform for broader regional integration. The 12 original signatories were the United States, Canada, Mexico, Australia, Japan, Singapore, Chile, New Zealand, Peru, Vietnam, Malaysia, and Brunei.
However, early in his first year in office, Trump withdrew the United States from the TPP, leaving the agreement in critical condition. On January 23rd, though, the Guardian reported that the agreement had been revived, without the US, though there is hope that the US will join the TPP in the future.