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International Trade

Reservations About the Effects of Trade in Practice

Trade Seen as Helping Business and the Rich But Not US Workers

One of the most prominent reservations about trade is that its benefits are not equally distributed. While the majority believes that trade benefits business and the rich, the majority does not believe that it helps workers.

In recent PIPA polls, respondents were asked to rate the impact of international trade for various populations as positive or negative for on a scale of 0 to 10. For American business, majorities gave it a positive score (above 5) – 51% in January 2004 and 60% in October 1999. For American workers, just 25% gave a positive response in both years. Pluralities of 45% in 1999 and 48% in 2004 said it has been negative for workers (rating it below 5). The mean scores were well above 5 for business and below 5 for workers. [1]

In July 2004, CCFR asked whether “international trade” was good or bad for a number of different groups and items. In that poll, a majority of 59% said it was good for American business, but only 31% believed it was good for the job security of American workers while 64% said it was bad. [1a]

A Gallup poll taken in November 1999 found that 56% believed increased trade between the US and other countries helps American companies, but just 35% felt it helps US workers, while 59% said that it hurts them. [2]

Trade is also seen as benefiting the rich disproportionately. In the October 1999 PIPA poll, a majority of 56% said they thought, "The growth of international trade has increased the gap between rich and poor in this country." Only 10% said trade has decreased the gap, while 27% said it has had no effect. [3]

Public Mostly Negative on Trade's Effect on Availability of Jobs

Clearly many Americans are concerned about the impact of trade on jobs. When presented an affirmative statement saying "Most American trade agreements with foreign countries are a principal cause of lost jobs and a lower standard of living in this country" in an October 1995 LA Times poll, 63% agreed, while 32% disagreed. [4] However, this result may suffer from response acquiescence since the question does not address the potential increase in jobs from trade. Thus, the question arises, what about the net perceived effect of trade on jobs?

Recent polls that offer the option of saying that trade results in more jobs, less jobs, or makes no difference find more respondents saying that trade creates a net loss in jobs rather than a net increase, frequently a majority. A January 2004 PIPA poll, for example, found a strong majority of 63% saying that “more jobs are lost from imports” while only 8% said “more jobs are gained from exports.” Twenty-five percent felt the number was about equal. CCFR, in July 2004, found that a solid majority of 56% felt international trade was bad for “creating jobs in the US”; only 38% felt it was good. In a TIPP poll conducted in October 2003, 53% said that “free trade between the US and other countries” loses more jobs than it creates. Only 16% said it creates more jobs, and 23% felt it makes no difference. These results are more negative than a May 2002 TIPP poll in which 45% said free trades loses more jobs, 24% supported the contention that "free trade" creates more jobs, and 25% said it makes no difference. In an October 2000 Washington Post/Kaiser/Harvard poll, 49% said, "trade agreements between the US and other countries…cost the US jobs." Just 21% thought they had helped create jobs, and 27% said they did not make much difference. An April 1997 Time/CNN poll found 42% saying that trade agreements have mostly "lost jobs for this country," while 41% said that they have "done both about equally" and just 7% said that they had "mostly gained jobs." [5]

When presented two arguments about trade and job loss or creation, a majority has agreed with the statement that suggests more jobs are lost. In September 2003, an NBC/Wall Street Journal poll posed this question:

I am going to read you two statements, and I'd like you to tell me which one you feel comes closer to your view. Statement A: The United States needs to focus on keeping American jobs for American workers. Each time an American corporation agrees to send work outside the country, the company also gives away jobs. In the end, even if some new business is created for American exporters, free trade is not worth it because local jobs are lost. Statement B: Today large companies that intend to sell their products to worldwide customers must also operate worldwide. Just as American companies build plants in foreign countries where they sell their products, foreign companies build plants in the United States so they can sell their products here. In the end, free trade is worth it because foreign companies and our exports create jobs here.

After hearing these arguments, 54% chose statement A and 35% chose statement B. Eleven percent said “some of both” or didn’t know.[6]

Other polls taken during the height of the economic boom at the turn of the decade found the public a bit more optimistic with the public divided on the question of whether trade produces a net gain or net loss of jobs. In an April 2000 Harris poll, 45% said that "expanded trade" leads to an increase in "the number of US jobs", while 44% said it leads to a decrease. In an October 1999 poll, PIPA used a series of three questions to address this issue. In two separate questions, respondents were asked whether they believed that exporting products meant the creation of jobs in the US, and whether they felt importing products meant the loss of jobs in the US. Those who gave the same response to both questions were then asked whether, on balance, "more jobs are lost from imports or more jobs are gained from exports?" Combining all of these answers, respondents were almost exactly divided, with 46% saying more were gained and 45% saying more were lost. [7].

Pew has recently begun asking a question that combines the values of concern for free trade’s impact the overall economy and its impact on jobs (instead of just the impact on the economy). As noted in the section Support for Trade in Principle , a majority has held the view that free trade is good for the economy. But when combined with its impact on jobs, attitudes turn negative. In July 2004, Pew found 41% saying that “Free trade has been mostly bad for the US economy and American workers”, while only 31% said it has been good. Twenty-eight percent did not know. [7a]

Trade and the Quality of Jobs

Apparently Americans' concern about the impact of trade on jobs is not predicated on the assumption that the jobs that are generated by trade are of lower quality than the jobs that are lost. On the other hand, most Americans also do not appear to buy the idea that the new jobs are superior. This is based on a May 1998 Epic-MRA poll (see box below). [8]

Of American jobs that are [created/lost] because of trade with other countries, do you think those lost jobs are mostly high-wage, high-benefit jobs, low-wage, no-benefit jobs, or average jobs with average benefits?
 
Created
Lost
High-wage jobs
14
15
Low-wage jobs
29
34
Average-wage jobs
54
45
Undecided
3
6


The Disruptive Effects of Trade for Workers

Since there does not seem to be a clear consensus that trade produces a net cost in terms of the number of jobs or the quality of jobs, why then is there a majority that expresses such concern about the impact of trade on American workers? Apparently, for many Americans the more important question is not simply one of net numbers, but of the painful and disruptive impact on those who lose their jobs-something that is not necessarily offset by some other American getting a new, and possibly even better job. Even when it was emphasized in a June 2005 PIPA poll that trade may generate new jobs with higher wages, a majority did not feel this offsets the disruption for the workers who lose their jobs. Asked to choose between two statements, 52% chose: "Even if the new jobs that come from freer trade pay higher wages, overall it is not worth all the disruption of people losing their jobs." Forty-one percent chose, "It is better to have the higher paying jobs, and the people who lost their jobs can eventually find new ones." January 2004 and October 1999 PIPA polls found even larger majorities expressing that the disruption of trade was not worth it. Thus, if Americans were convinced that in fact trade does produce more net jobs, this might not eliminate their reservations about the effect of trade on jobs. [9]

Outsourcing

A majority also expresses concern about outsourcing by which companies hire overseas workers to replace domestic workers performing tasks that can be carried out remotely. In the July 2004 CCFR poll, respondents were presented two arguments about outsourcing. A strong majority (72%) chose the statement that, “Outsourcing is a mostly a bad thing because American workers lose their jobs to people in other countries.” Only 22% chose the one that stated, “Outsourcing is mostly a good thing because it results in lower prices in the US which helps stimulate the economy and create new jobs.” [9a]

Concern for Workers Not Based on Self-Interest

At first glance, it seems obvious that Americans would be concerned about the effects of increasing trade on workers, because most Americans are either working or are being supported by someone who works. But this does not necessarily mean that all Americans feel personally threatened by trade. Asked how international trade affected them in PIPA polls from January 2004 and October 1999, only about one in four said that its effect on them personally was more negative than positive. In 2004, PIPA twice asked about the impact of “globalization and the growth of international trade” on the “security of the job or jobs of people in your household.” In both surveys, only about one-third reported the impact as negative, with around half saying it had no effect either way. In a January 2004 PIPA poll, only 12% of respondents said that they had lost a job due to what they believed was the impact of international trade. A majority of 59% said they did not “know someone who [they] think has lost a job or seen their business suffer due to globalization and the growth of international trade.” In November 1993 CNN/USA Today poll asked respondents whether they thought NAFTA would positively or negatively affect them and their families. Only 26% said they thought NAFTA would be negative, while 45% said they thought it would have no effect and 25% thought it would be positive. [10]

In October 1999, PIPA also explored how vulnerable Americans felt to the growth of trade as compared to the average. On a scale of 0 to 10-with zero meaning not vulnerable at all to the changes that come with increasing international trade and 10 meaning very vulnerable to those changes-when describing themselves, the mean score was 4.9. However, when asked about the average American, the mean score was 5.8. [11]

What this suggests is that Americans tend to perceive others as more vulnerable than themselves. Combined with the fact that only a small minority perceives the effects of trade as being a net negative for them personally, while a solid majority expresses strong concern for the effect of trade on American workers, it appears that this concern is not simply derived from self-interest. Rather, an altruistic concern for others perceived as more vulnerable is a significant factor.

Concerns About Environmental Impact of Trade

Many Americans have concerns about the impact of trade on the environment. In the July 2004 CCFR survey, respondents were divided about trade’s impact with 46% saying that international trade was bad for the environment, while 45% said it was good.
This concern was also evident at the time of the NAFTA debate in the early 1990s. Two Gallup polls from September and November 1993 presented a series of arguments against NAFTA, including one that said "the environment will suffer, as US businesses move to Mexico to avoid the stricter environmental standards in the US." About 3 in 5 respondents agreed with this argument, while about one-third disagreed.[12]

If anything it appears that this concern for the environment has increased in the interim. As discussed below in "Trade and the Environment" even more robust majorities favor making environmental standards part of trade agreements. Some critics of environmental considerations in trade agreements say that concern for the environment is really old-fashioned protectionism in a new form; that the real goal is to save jobs rather than the environment. But other data (discussed below in this section) show that in the domestic context, a modest majority of Americans is willing to put a higher priority on the environment than on jobs. Thus, at least some of the support for environmental considerations in trade agreements is probably derived from an intrinsic concern for the environment.

Concerns About International Labor Standards

Americans show substantial concern that the products that the US imports may be manufactured in conditions that violate minimal standards of health, safety, or general decency. In a September 1993 Times Mirror poll, 72% said the US should not promote capitalism and free markets around the world if that risked "exploitation of underdeveloped peoples by Western businessmen." [13] As a respondent said in a PIPA focus group, "I don't want to think that some child put together, under abusive situations, many of my belongings in my home. I would hate to think of my children being put in that position."

The clearest indication of this concern is that very strong majorities feel that the US has an obligation to ensure that the products that it imports are made under proper conditions, and an overwhelming majority favors including labor standards in trade agreements. Very strong majorities also show a willingness to pay higher prices for products to ensure that they are not produced in sweatshop conditions. The reasons for this support are not only derived from moral concerns, but also from the belief that American labor may suffer if it has to compete with foreign workers toiling under sweatshop conditions. (See "International Labor Standards" for an analysis of this data.)

The intensity of support for a regime to enforce international labor standards suggests that Americans do not now feel that such standards are currently being upheld. This dampens support for the growth of international trade with countries that do not maintain such standards.

Concerns That Trade is Unfair to Poor Countries

Americans show some concern that poor countries are being treated unfairly in trade negotiations. In a July 2004 CCFR poll 65% disagreed (23% strongly) that “Rich countries are playing fair in trade negotiation with poor countries.” PIPA found 62% disagreeing (28% strongly) in January 2004.

Nonetheless it seems that a growing majority of Americans believe that trade per se is not harmful to the poor. Asked to rate the effect of trade on people in poor countries on a 0-10 scale in the June 2004 PIPA poll, only 25% gave it a negative (below 5) rating. This is down from 45% in PIPA’s 1999 poll. The mean score also rose from 4.74 to 5.72. It may be that Americans have become more convinced that, on balance trade is neutral or good for the poor, even as they continue to believe that the poor are being treated unfairly. [14]

Consistent with this perception of inequity Americans show strong support for trade policies that seek to help poor countries. See "Trading with Poor Countries,"

Other Countries Seen as Benefitting More than US

Support for trade appears to be dampened by the perception that other countries are benefiting from trade more than the US. In January 2004, a PIPA poll asked, “Thinking about the benefits of international trade, do you think that for the most part, the U.S. benefits more than other countries, that other countries benefit more than the U.S., or that it's about equal?” A slight majority of 52% said other countries benefit more, while only 17% said the US does. Another 28% said the benefits of trade were about equal. This perception that other countries benefit more is up from the 1999 PIPA poll when 45% said other countries benefit more and 21% said the US benefits more. [14a]

Americans express confidence that the US trades fairly with other countries, though they are not as confident that other countries trade fairly. A July 2004 CCFR poll asked whether the US practices fair trade with various other countries. In each case, a strong majority of two-thirds or better said that the US practices fair trade. Specific countries tested were Canada (81% fair), the European Union countries (76% fair), Japan (76%), South Korea (69%), China (67%) and Mexico (67%). [14b] An NBC/Wall Street Journal poll from April 1998 found that a very strong majority (71%) believed the US had trade policies that are fair to the "rest of the world." Just 15% thought they were unfair. [15]

Curiously, in the late 1990s, when the American economy was booming, there were widespread views that other countries were not reciprocating American fairness. In the October 1999 PIPA survey, an overwhelming 81% said they believed the US is more open to imports than most other countries. [16] Asked about countries in Asia in general, a December 1998 NBC /WSJ poll found that just 16% thought countries in Asia had fair policies, with 64% saying they were unfair (20% unsure). [17]

More recently, though polls asking about specific countries show a decline in this perception. The country that has in the past been perceived as the most egregiously unfair trader is Japan. In 1994 NBC/WSJ found 78% saying that Japan has unfair trade policies toward the US. This dropped to 59% in a 1998 NBC/WSJ poll and to 55% and 41% in the 1998 and 2002 CCFR polls. Most recently, in the July 2004 CCFR poll only 35% accused Japan of being an unfair trader, while for the first time a majority of 52% said that Japan had fair trade policies. Consistent with these changing views of Japan, CCFR has found a sharp drop in the percentage saying that "economic competition from Japan" poses a critical threat to the US, from 62% in 1994, to 45% in 1998 and then to 31% in 2002. The question was not even asked in the 2004 poll. [18]

Views of Mexico have also become warmer. While the 1998 NBC/WSJ poll found only 35% saying that Mexico was practicing fair trade policies (unfair 35%), in the 2002 and 2004 CCFR polls, 50% said that they practice trade fairly; in those years 36% and 38%, respectively, said they practice it unfairly.
Views of China's trade practices have gone through a more modest improvement. In 1998 NBC/WSJ found 58% thinking that China was practicing unfair trade (fair 20%). In 2002 CCFR found 53% saying that China was unfair, and that number dropped again in 2004 to 51%. Also, it should be noted that in 2004 the highest percentage yet (36%) found China to be fair.

When CCFR asked whether the EU's trade policies were fair toward the US, 60% said they were in both 2002 and 2004, up from 54% in 1998. The highest level of criticism was in a December 1998 NBC/Wall Street Journal poll, when only 33% believed countries in Europe were fair, while 47% thought their policies were unfair. However, when NBC/WSJ in April 1998 asked about European trade policies toward "the world," 54% said that they were fair and only 18% said they were unfair.

In 1998 Americans also expressed widespread feelings that Europe is less open to American imports than the US is to European imports. PIPA found that 74% agreed with the statement, "In general, European countries do not let in American goods as much as America lets in European goods" (20% disagreed). When another sample was asked "Which is more open to imported goods from the other, Western Europe or the US?" 71% said the US, while just 21% said Western Europe. An overwhelming 86% said the US makes it very (36%) or fairly (50%) easy for European companies "to sell their manufactured products" in the US. Just 41% said western European countries make it very (6%) or fairly (35%) easy, while 41% said the Europeans make it fairly difficult. [19]

Views of Canada have been consistently positive. In 1994 NBC/WSJ found 72% saying it was fair (unfair 9% ), rising to 79% "fair" in the June 2002 CCFR poll (unfair 10%) and falling between those two numbers in the 2004 CCFR poll (74% fair, 15% unfair).
In 2004, CCFR asked for the first time about impressions of South Korea�s trade practices. A plurality of 49% said South Korea�s trade practices are fair, while 35% said they practice unfair trade.(see note 18).
It is interesting to note that even back in 1999 when there was a more widely held view that countries in general, especially Asian countries, were less than fair, a modest majority recognized that, nonetheless, the US benefits from increased trade as much as other countries. In a 1999 PIPA poll, 53% said that the US benefits as much as (32%) or more (21%) than other countries, while 45% assumed the US benefits less.[20]

Trade Deficits

Americans have also expressed concern over US trade deficits. A May 2005 poll by the Pew Research Center found that 63% believe the trade deficit is a �big problem�for the nation�s economy today.� Only 21% said it was not a problem. In the 2002 CCFR poll, an overwhelming majority (81%) said that �reducing our trade deficit with foreign countries� was an important foreign policy goal (including 51% very important).[21]

 

 

 

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