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International Trade

NAFTA, CAFTA, and FTAA

Recent polling suggests that there is no clear positive or negative public attitude on NAFTA. Americans are divided as to whether it has been good or bad. Yet, a plurality wants to see changes to NAFTA, and a majority expresses dissatisfaction. These reservations appear to arise from concerns that, while business is benefiting, NAFTA can have negative impacts on American workers' jobs and wages and on the environment. Attitudes are also very divided about CAFTA, with the public showing similar concerns. Support for CAFTA would be robust, however, if key public concerns were addressed. It appears that there is slim majority support for expanding free trade to include other American countries, such as the proposed Free Trade Area of the Americas (FTAA). However, this is based on minimal polling and very general questions.

In several polls conducted over the last few years a plurality has expressed the view that, on balance, NAFTA is something positive. Such responses are usually obtained with the simplest, most direct questions. In a June 2005 PIPA poll a plurality of 46% viewed NAFTA as good for the US while 40% saw it as bad. Pluralities of 47% and 44% also felt it was good in PIPA polls in 2004 and 1999. In a November 2002 Ipsos-Reid poll, 48% of respondents said that the United States has been a “winner” as a result of NAFTA and 37% felt that the United States was a “loser as a result of NAFTA.”

As with trade overall, Americans are positive when thinking about their role as a consumer. A July 2004 CCFR poll found that 44% said NAFTA was good for “consumers like you” (30% bad) and 51% said it was good for the “standard of living” (33% bad). Asked about its impact on the US economy, the same poll found the public divided, with 42% saying good and 43% saying bad. As noted below, reservations about NAFTA are driven by concerns about jobs.[1]

However, when questions include descriptions of NAFTA as a free trade agreement that includes Mexico, the public is more negative. In April 2005, an IPSOS-Reid poll again asked whether the US had been a winner or loser as a result of NAFTA, but preceded the question with the statement, “Canada, the United States and Mexico entered into the North American Free Trade Agreement, NAFTA, in 1992 to reduce trade barriers and allow for a North American trading zone for the greater flow of goods and services between these countries. This agreement came into force in 1994.” After hearing that description, 47% said the US was a loser and 43% said it was a winner. A plurality said that NAFTA was “bad for the US” in an August 1997 Gallup poll that incorrectly described NAFTA as being a trade agreement only with Mexico. In that case, 47% said that it was bad, while 37% said it was good. However, when Gallup asked the same question in May 2000 these numbers virtually reversed, to 47% saying it was good and 39% saying it was bad. When the Los Angeles Times (September 1997) mentioned all three countries, the response was divided at 39% good and bad. [1a]

In many of these polls, a fairly important percentage – usually around 15% or higher - has volunteered a middling response or said they don’t know. Thus, it is not surprising that when a question offers an explicit middle option, a substantial percentage chooses it. This suggests there is no majority in favor of either a positive or negative assessment of NAFTA overall. An Ipsos Public Affairs poll from February 2005 asked if NAFTA had been “a good deal for the United States, a bad deal for the United States, or has it been neither good nor bad.” It found a plurality of 32% saying neither, with good and bad responses very divided, at 26% and 28%, respectively. In a November 2002 Ipsos-Reid poll, 34% said NAFTA had benefited the US, 32% said it had hurt the country, 23% said it had no impact one way or another. Similarly, in a National Opinion Research Center poll concluded in January 2005, a plurality of 32% chose the middle option of “somewhat benefits”, while only 14% said NAFTA greatly or largely benefits the US, and 19% said it only benefits the US a little or not at all. Another such poll, by NBC-Wall Street Journal in September 2002, found a more negative response, but consistent with the polls mentioned above it described the agreement as including Canada and Mexico. In that instance, a plurality of 35% said that NAFTA had a more negative impact on the US economy. Only 18% said it had a positive impact, but 27% said it had not had much of an impact. Also, in each of these polls, a substantial pecentage – ranging from 12% to 28% said they simply did not know.[1b]

These divided and unsure responses make sense if the public does not really have a meaningful understanding of the impact of NAFTA. Whether NAFTA has been good or bad for the US is a fairly technical question over which even many experts disagree. Indeed, when an August 1999 poll by the Washington Post, Kaiser Family Foundation and Harvard University explicitly offered the option--"or haven't you heard enough to say?"--51% chose that option, while 24% said NAFTA had been good and 20% thought it had been bad. Unfortunately, this question has not been repeated more recently. [2]
At the same time, it appears that NAFTA evokes a somewhat cooler feeling tone. In three polls of voters by Greenberg Research, respondents were asked to rate their feelings on NAFTA using a temperature scale of 1 to 100, with 100 signifying a warm, favorable feeling, 0 signifying a very cold, unfavorable feeling and 50 representing a neither warm nor cold feeling. Between late 2002 and mid-2005, the mean temperature ranged between 42.0 and 47.2, with a plurality consistently giving a cool response (0-49).
Warm ratings (51-100 degrees) were given by only 31% of May respondents, and 27% of respondents in both November and January gave a warm rating between 51 and 100 degrees. Cool ratings were given by 30% in both May and January, and 29% in November. Twenty-two percent in May, 24% in January, and 23% in November rated their feelings about NAFTA as neither warm nor cool. [2a]

But when asked in principle what should happen to the level of trade between the US, Mexico and Canada, only a small minority favors reducing it. Given three options in a IPSOS-Reid poll conducted in April 2005, only 8% felt we should “reduce the trade and integration of the economies of these three countries.” Rather, 88% said that the “we should keep trade between countries and their economies the way they are today for the foreseeable future” (47%) or “we should make trade even closer between these countries and integrate the three economies further” (41%). An Ipsos-Reid poll in November 2002 asked the same question and found similar results. Thus, a fairly strong majority believes the United States should, at a minimum, continue trade between the countries as they are today. [2b]

In early 1996, three Time/CNN polls asked about withdrawing from NAFTA and found only about a third in favor. About half were opposed and the remainder unsure. [3]

Only a minority supports refusing to abide by NAFTA decisions about trade between the three party countries. When an early 2005 National Opinion Research Center poll presented the statement, “America should follow NAFTA decisions, even if it does not agree with them,” only 31% disagreed. Although a smaller percentage (15%)agreed that the US should follow such decisions, a clear majority (54%) said they neither agreed nor disagreed (27%) or could not choose (27%).[3a]

Reservations About and Desires to Change NAFTA

Even though more Americans evaluate NAFTA as having been modestly good for the US, they nevertheless appear to have strong reservations and a desire to make changes to it. In the March 2003 EPIC-MRA poll, for example, when given three options for the future of the trade agreement, just 21% said they wanted to "continue the NAFTA agreement" as is. A majority of 57% believed NAFTA should be "continued with changes." Thus, while only 12% wanted to "pull out of NAFTA" completely, a strong 69% majority expressed some dissatisfaction with NAFTA. [4]

Question: This year marks the [Xth] anniversary of NAFTA. After observing how NAFTA has worked between the United States, Mexico, and Canada over the past few years, do you think America should continue the NAFTA agreement, should America pull out of NAFTA, or should it be continued with changes?
  March 2003 May 2000 May 1999 May 1998
Continue
21 23 24 23
Pull out
12 15 18 16
Continued with changes
57 42 40 47
Undecided/Don't know 10 20 18 14

As with the growth of trade overall, Americans believe that the impact of NAFTA has been more negative than they were led to believe by government officials who supported the trade pact. In a January 2004 poll, PIPA asked respondents to rate on a scale of +5 to –5 how they felt “the effects of the Northern American Free Trade Agreement, or NAFTA, have been as compared to how US government officials said they would be.” A plurality of 44% said the results were less positive than they were told (-1 to –5 on the scale). Only 12% said they were more positive (+1 to +5) and 30% said they were about the same as indicated (rating of 0). The mean response was -1.34. [4b]

Apparently, the biggest concern about NAFTA is its potential impact on jobs. In a July 2004 CCFR poll, a mere 25% said NAFTA was good for “job security for American workers.” Sixty percent said it was bad. A February 2005 Ipsos Public Affairs poll presented two arguments that contained a lot of mixed concepts, but were primarily about jobs. A majority of 51% chose the one that said, “NAFTA has been bad for the U.S. economy because cheap imports from abroad have hurt wages and cost jobs here at home. The U.S. should not pursue free trade agreements with other countries in the future.” Thirty-seven percent chose “NAFTA has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans at home. The U.S. should continue to pursue free trade agreements with other countries.” In a June 1999 Potomac Associates and Opinion Dynamics poll, 52% said imports from Mexico "pose a serious threat to the jobs of American workers" (42% said Mexican imports were not a serious threat). [5]

More broadly, there has been a widespread perception that NAFTA is a boon for American business, but a marginal benefit for average Americans or workers. In the 2004 CCFR poll cited above, in which fewer than one-third rated NAFTA as good for workers, a plurality 50% said it was good for “American companies” (36% bad).In various polls, strong majorities of about 3 in 5 respondents have said that NAFTA would be good for American business; less than half thought it would be good for US consumers; and only about a third thought it would be good for American workers. In February 1996, for example, a Time/CNN poll found 58% thought "free trade agreements like NAFTA and GATT are mostly good" for American corporations, and 57 % thought the same for Wall Street investors. However, only 45% felt such agreements to be good for American consumers, and just 31% said the same for US workers. Time/CNN and ABC/Washington Post polls taken in 1993 obtained similar results for business and workers, though a majority did feel consumers would benefit at that time. In an NBC News/Wall Street Journal poll from September 1993, 55% of Americans agreed that "only big American corporations will benefit" from NAFTA (emphasis added); 37% disagreed. [6]

Numerous polls have shown pluralities or slight majorities believe NAFTA has meant a loss of American jobs, not a gain. The July 2004 CCFR poll found a majority of 56% saying that NAFTA was bad for “creating jobs in the US”. Only 31% felt it was good for creating jobs. In an October 1996 survey by the Associated Press, just 21% said that NAFTA "makes for more jobs" in the US, while 47% said it makes for fewer jobs here (29% said they did not know). A September 1997 Zogby poll that asked those who said they were familiar with NAFTA (58% of the sample) whether they believed that it "has created more jobs or that it has led to a net loss of jobs"--only 28% said NAFTA had led to more jobs, while 44% thought it had resulted in a net loss of jobs. In August 1996, a Los Angeles Times poll found that a majority (52%) saying the "free trade agreement between Mexico and the United States"-with no mention of Canada-had "taken jobs away from the American people." Only 6% said it had "generated more jobs," and 24% said it made no difference one way or the other. [7]

Consistent with the view that the US has lost jobs, a majority has expressed the view that Mexico has gained. In 2004, a strong majority of 69% said NAFTA had been good for creating jobs in Mexico, and only 17% said it had been bad. In the same poll, 69% also felt it was good for the Mexican economy (CCFR). In the October 1996 AP poll56% thought it created more jobs in Mexico, while just 12% said it meant fewer jobs there and 32% did not know. Canada was seen as, on balance, having gained jobs by a plurality of 39% (fewer jobs, 17%). In the Los Angeles Times poll, four times as many respondents thought Mexico had been the primary beneficiary of NAFTA as thought the US had been (49% to 12%). Sixteen percent said both countries had benefited equally. More recent polls have also found concern about jobs loss to Mexico. [8]

In addition to concerns for jobs leaving the US, a plurality has believed that NAFTA has exerted downward pressure on the wages of US workers. In a 1997 poll sponsored by Wisconsin Public Television, 45% said they believed free trade agreements like NAFTA have done more to "keep wages down" in the US, 26% said such agreements have not had much effect, and only 17% said they believed they have done more to increase wages. This is similar to data from 1993, when a Gallup/CNN/USA Today poll found that 49% thought NAFTA would lower wages, 30% thought it would have no effect, and just 11% thought it would raise wages. In a September 1993 NBC/Wall Street Journal poll, 54% agreed with the assertion that as a result of NAFTA "Wages in the US will have to fall, so that American companies and workers can compete with Mexico." [9] Concerns about job and wage pressures due to free trade are heightened in the NAFTA context because Mexico is a relatively low-wage country. As noted in "Helping US Workers," the public is less likely to support reciprocal free trade if the potential partner is a low-wage country.

Another recent question has asked about the impact of “free trade agreements like NAFTA and the WTO…on the financial situation of you and your family” (Pew/CCFR, July 2004). A plurality of 41% said it had hurt their situation, while 36% said it had helped. Another 25% volunteered neither (12%) or said they didn’t know (13%).[9a]

Americans have also expressed concerns about the impact of NAFTA on the environment. The July 2004 CCFR poll found a plurality (48%) saying NAFTA was bad for the environment, while just 34% said it was good. Several polls taken during the extensive debate on NAFTA in 1993 also found a plurality or majority of Americans expressing the view that NAFTA would have a negative effect on the environment. In September and November 1993, CNN/USA Today polls found majorities (61% and 57%, respectively) agreeing with the statement, "The environment will suffer, as U.S. businesses move to Mexico to avoid the stricter environmental standards in the U.S." In November 1993, an ABC News/ Washington Post poll, 49% agreed (and 41% disagreed) that NAFTA "will damage Mexico's environment as more factories locate there." Earlier that year, in May, a Time/CNN offered respondents three options as to what impact NAFTA would have on "environmental pollution near the border between the United States and Mexico." Forty-three percent said the trade agreement would make it worse, 26% said it would have no effect, and 15% felt it would make pollution better.[10]

The Evolution of Attitudes on NAFTA

Attitudes about NAFTA have gone through a complex evolution. In 1991, Gallup polls found support for the North American free trade idea to be quite high - in two polls that year, over 70% said it would be good for the US. But support had dropped dramatically by late 1992 - to 54% in a September Gallup poll, and then to 46% in an October Newsweek survey.[11]

The high-profile debate of 1993 engendered even more uncertainty, and the public became quite divided by the fall of 1993. The rise to prominence of Ross Perot during the 1992 campaign and his strong opposition to further trade agreements, as well as the modest recession of 1991-92 may well have contributed to dampening support for the expansion of free trade, especially in light of concerns that US workers would be forced to compete with low-wage workers in Mexico.

At the time of NAFTA's passage, several polls found the public virtually evenly split on whether it favored or opposed the trade pact. In early November 1993, a Time/CNN poll found that 41% supported the agreement to "eliminate all trade barriers" between the US, Canada, and Mexico. An almost equal number were opposed (39%), with 20% undecided. At the same time, ABC News found the public divided as to whether "Congress should approve or reject NAFTA": 42% said they should and 42% said they should not. Also, a CBS/New York Times poll in November 1993 found 37% in favor and 41% opposed-a difference that falls within the margin of error.[12] Again, polls that allowed respondents to say they were not familiar enough with the issue usually found pluralities giving such a response.[13] This very mixed response to NAFTA is not surprising given the intensity of the debate among experts and the complexity of the issues involved.

However, in December, after Congress approved the trade deal, the public expressed stronger support. An NBC/Wall Street Journal poll found that 53% of Americans said it was a "step in the right direction," and just 33% said it was a "step in the wrong direction."[14] In other contexts, research has shown that public support for a contested policy increases once US leadership resolves its internal differences enough that action is taken. Also, as noted, Americans came into the debate with an initial positive orientation to the idea of NAFTA.

Between 1994 and 1997, as NAFTA went into effect, a plurality felt that the net results of NAFTA for the US were initially more negative than positive. For example, between July 1994 and July 1997, four NBC/Wall Street Journal polls asked the public for an assessment of NAFTA's "impact" on the US "so far." In every case, a modest plurality, ranging from 35% to 48% said they believed NAFTA had "more of a negative impact" on the US. Those saying it had a more positive impact ranged from 21% to 32%. Very large percentages continued to express uncertainty.[15]

Still, other polls taken during this period by CBS News, Times Mirror and Harris found a slim plurality in support of the trade pact more generally, indicating that these negative views probably hinged on an interim assessment of impact, not a conclusion that NAFTA was a mistake overall. For example, Times Mirror found 43% in favor, 38% opposed (March 1995), and Harris found 48% in favor, 39% opposed (April 1995). A CBS News question found in October 1996 that about half preferred to say they did not know enough to say, but of the remainder, those who favored NAFTA outnumbered those who opposed it by about three to two.[16] As noted, in late 1997 support increased and has stayed relatively steady since.
In general, the modest support for NAFTA is consistent with modest support for free trade overall. Moreover, solid majorities have said they support free trade agreements with other countries (see "US Trade Policy").

CAFTA

As with NAFTA, there is substantial public ambivalence in overall attitudes about the Central American Free Trade Agreement, or CAFTA, which was approved by Congress in 2005. Recent polls show that a plurality favors the agreement when told that “US and some countries of Central America have negotiated a treaty called the Central American Free Trade Agreement that is similar to what the US now has with Mexico and Canada in NAFTA.” When PIPA asked this question in June 2005 and January 2004, 50% and 49%, respectively said they favored Congress approving such an agreement. Each time, about 2 in 5 opposed Congressional approval. However, an Ipsos Public Affairs poll in February 2005 listed all of the countries party to the agreement – including the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic - and said CAFTA would “eliminate almost all restrictions on imports, exports, and business investments between the countries.” Hearing this detail, only 32% favored the agreement and 51% expressed opposition. [17]

Concerns about CAFTA are dominated by the same cluster of issues that drive reservations about free trade and NAFTA – worries about jobs and wages, about its potential impact on the environment and worker rights, and about its lack of public involvement. In the Ipsos poll cited above, when those who opposed CAFTA were asked why in an open-ended question, a majority (52%) chose that it would hurt jobs in the US. Smaller percentages expressed general opposition to free trade (10%) and concerns for jobs and working conditions in Central America (10% combined).

A series of arguments were then posed, and after each one respondents were asked if the statement made them more or less likely to support CAFTA. Majorities said they would be less likely to support it for the following reasons:

The agreement does not include any requirements for Central American countries to protect the environment and restrict child labor.
69% less likely
 
The agreement is a bad idea for U.S. workers because companies will move manufacturing jobs overseas for cheaper labor.
60% less likely
 
CAFTA may devastate key industries such as manufacturing and farm commodities
55% less likely
 
The agreement erodes U.S. sovereignty by allowing foreign corporations to sue the U.S. outside of our judicial system.
54% less likely

In an open-ended question, those who supported CAFTA were driven primarily by a general support for free trade (39%), the idea that it would create jobs in the US (19%) and also for the altruistic reason that it would create jobs in Central America (16%). In addition, no argument in the battery noted above influenced a majority to be more likely to support the bill. However, pluralities were more likely to support CAFTA when told that “By opening new markets to American goods, CAFTA could help to lower our trade deficit” (47% percent) and that. CAFTA will improve the economies in the six countries outside the United States and significantly reduce immigration to the U.S” (45% more likely). The first of these is a highly dubious argument, while the latter contains both altruistic and self-interested reasons.[18]
After the various arguments were presented, respondents were again asked about their support for CAFTA. Opposition rose to 54% and support declined to 30%. [19]

When asked to evaluate CAFTA in the context of trade-offs, Americans again came down in favor of preserving US jobs, as they do in almost all trade questions, and expressed concern about CAFTA’s impact on immigration and terrorism. In Ipsos poll, an overwhelming 74% said they would oppose CAFTA if it “reduces prices you pay as a consumer but eliminates jobs for U.S. workers.” Just 17% said they would favor it given those circumstances. Moreover, when asked to choose between two statements, a plurality of 41% chose “CAFTA will open our borders to Central America, which will pose a risk to U.S. security by making it easier for terrorists to attack in the U.S.” as opposed to 34% who believed “CAFTA will help the U.S. (United States) win allies in Central America and promote peace in the region and thus decrease the risk of terrorist attacks in the U.S.” [20]

It is clear, however, that under certain conditions, support for CAFTA would rise to a strong majority. As noted above, in the June 2005 PIPA poll, 50% expressed overall support for CAFTA while 39% were opposed. Different samples of those who were opposed were then asked follow-up questions to see what conditions would increase support for the agreement. When asked to reconsider their opinion if the US government were to “substantially increase federal spending on programs to help American workers who lose their jobs,” 40% said they would then favor CAFTA (55% of the total sample.) If asked to suppose the US government would “make sure that Central American countries enforce health and safety standards for their workers,” 31% changed their view, thus increasing overall support to 51%. If it was suggested that “the US government, as part of CAFTA, were to commit to substantially increase federal spending on programs to help American workers who lose their jobs, AND to make sure that Central American countries enforce health and safety standards for their workers,” 65% of those opposed switched to support of CAFTA. This represents 64% approval overall. [21]

Support for FTAA

Although very little polling has been done on the issue, it appears that there is majority support for expanding free trade to more American countries and thus there would likely be support for what has been proposed as a Free Trade Area of the Americas (or FTAA). Most recently, CCFR asked about this issue in July 2004: “As you may know, the US and most countries of North, Central and South America have been discussing the possibility of having a Free Trade Agreement of the Americas, similar to what the US now has with Mexico and Canada in NAFTA. Would you favor or oppose having such a new agreement?” A majority of 59% supported the idea, while 30% opposed it. This is higher than the results PIPA found when it asked the same question in January of 2004. At that time, 52% favored the idea and 40% opposed it.[22]

A higher level of approval was registered during the economic boom of the late 1990s. An August 1998 Market Strategies survey found that a strong 67% majority supported the US "negotiating free trade agreements with South American nations"; just 23% opposed the idea.
This was up substantially from earlier polls, the results of which more closely resemble attitudes in 2004. In October 1996 CBS News poll, when support for NAFTA was at a low point, respondents were divided (46% favor, 45% oppose) on "expanding NAFTA to include free trade with other Latin American countries. Back in December 1994, a year after NAFTA was passed, a slim majority of 52% favored and 35% opposed "having the US negotiate a similar trade agreement with all the nations of Latin America and South America" (NBC/Wall Street Journal). [23]

These results indicate a modest foundation of public support, but they should be viewed with some skepticism. Americans tend to support the growth of trade in principle; however, as the issue becomes more salient and the issues become more concrete to respondents, other value concerns may rise to the surface and responses may become more divided and support more conditional on these other issues being addressed. As discussed, attitudes about NAFTA were much more positive in 1991 and 1992, before it became widely debated in 1993. Moreover, as discussed in "US Trade Policy," over the last few years, a majority has not supported Congress granting the President "fast track" (now called "trade promotion authority"), which is basically a prerequisite for proceeding with further free trade negotiations.


 

 

 

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