|International Economic Outlook logo 130||
No. 1, March 2011
Plagued by slow economic growth and high unemployment, the Obama administration has been rethinking its stance on trade. Administration officials are trying to move the South Korea free trade agreement forward, and Republicans in Congress see an opportunity to push for agreements with Colombia and Panama as well. Does this enthusiasm from policymakers match the public mood? In tough economic times, Americans are less disposed to favor free trade, but they recognize the benefits of an integrated global economy. This Outlook offers a comprehensive new look at American attitudes toward trade.
Topics covered in this Outlook:
- Revisiting NAFTA
- The Salience of Trade
- Trade in General
- Who Benefits, Who Is Hurt
At a breakfast organized by Bloomberg News in early February, newly minted Obama chief of staff William Daley told the assembled reporters, "We want Korea," referring to the long-delayed trade pact. Daley was reinforcing words President Barack Obama used in his State of the Union speech, when he asked Congress to pass the Korea free trade agreement (FTA) "as soon as possible." Later in February, at a speech to the Chamber of Commerce, the president declared his intention to seek new opportunities to open markets and promote US exports. He signaled again his administration's intention to secure trade pacts with Colombia and Panama and to bring Russia into the international trading system. His audience at the chamber applauded, as did Republican leaders in Congress.
Politicians of both parties seem to be falling all over one another to talk up trade. Yet last October, the Wall Street Journal ran a front-page, above-the-fold story on its new poll titled "Americans Sour on Trade." The Pew Research Center echoed those sentiments in a November release, when it reported that "support for free trade is now at one of its lowest points in 13 years of Pew Research Center Surveys."
Are the president and Republican congressional leaders out of step with public opinion on trade? Or have Americans become more favorably disposed toward trade since the fall? It is possible, of course, that Americans' deep concerns about high unemployment could be making them more receptive to anything that moves the needle on jobs. But it is also possible that the negative results the Wall Street Journal trumpeted on its front page were only part of the story. A careful review of polling data starting with the North American Free Trade Agreement (NAFTA) suggests that Americans are deeply ambivalent about trade, seeing both positive and negative aspects. Sometimes a too literal reading of any individual poll can mislead.
Polls can be valuable in understanding complex societies, but they also have significant limitations. Here we refer not to low response rates, although those are a significant problem for the business, but to the ways in which surveys are deployed today. Questions are asked sporadically, producing large gaps in our understanding of attitudes about trade and other subjects and making it difficult to draw reliable conclusions about trends. Most pollsters today poll on issues when they are in the news and then drop the questions when the media searchlight moves on. When pollsters ask about free trade, they rarely ask questions about the salience of the issue. It is important to know how important trade is compared to, for example, health care or taxes.
Perhaps more significant than these concerns, however, there are many areas in which public opinion is tentative. Questions about specific trade agreements often produce high "don't know" or "no answer" responses. Suggesting that public opinion is firm on particular agreements can be wrong. The large "don't know" responses may also indicate, as they did during the debate over NAFTA, that people's attitudes are malleable. The polls taken right before and after NAFTA's passage, for example, showed shifts in opinion over a short period of time. These fluctuations during the heat of the debate suggest that Americans did not have strong convictions about the agreement. Americans rarely give specific legislative guidance. The polls are most useful to analyze general concerns, and here, despite low levels of specific knowledge and attention, Americans' opinions on many aspects of trade are clear and firm--although persistently ambivalent.
For most Americans, NAFTA has been and remains the most visible US trade agreement. During most of the debate leading up to its passage in Congress in late 1993, large numbers of Americans said they did not have an opinion about it. In five iterations of an NBC/Wall Street Journal question asked between January and October 1993, more than a third responded that they had not heard enough about "the North American Free Trade Agreement with Mexico and Canada" to have an opinion of it. Other polls produced similar results. Such low levels of interest or knowledge indicate the limited attention Americans normally pay to trade.
Americans started paying closer attention as the final vote approached. (The House of Representatives approved NAFTA on November 17.) Sixty-eight percent of respondents in late November 1993 told Gallup/CNN/USA Today that they were following "news about the North American Free Trade Agreement" closely, up from 42 percent in August. Opinions about NAFTA were narrowly negative in most polls during 1992 and most of 1993, but they improved a little in November and December 1993. In most of the questions asked in late November 1993, respondents narrowly favored the agreement. After NAFTA was enacted, the public became inattentive again. A September 2003 question from Zogby International told respondents that NAFTA has "been in effect now for ten years." Thirty-seven percent said it had been a good thing for the United States, 33 percent a bad thing, but a significant 29 percent were not sure or had no opinion.
Pollsters moved on to other subjects, although they continued to ask the occasional question about NAFTA. In 2004 and 2008, the Chicago Council asked whether NAFTA had been good or bad for various groups. In both years, around 60 percent said it had been bad for job security for American workers.
The polls on NAFTA reveal patterns about trade attitudes that remain true today. First, Americans rarely follow specific trade debates closely. In terms of general attitudes, they believe trade in principle is good. They almost always say trade agreements are better for our trading partners than for us. They are generally more positive about the impact of agreements on the US economy than they are about their impact on American workers. People almost always say trade agreements are bad for American workers. Almost all questions about trade that mention "jobs" or "American workers" produce negative responses.
Additionally, when the US economy is doing poorly, opinions about trade in general (and many other issues) are usually negative. Americans' "sour" attitudes described in the Wall Street Journal headline discussed earlier reflect the economic environment.
Opinion Today: The Salience of Trade
Since 2001, Princeton Survey Research Associates (PSRA)/Pew has asked people about priorities for the president and Congress in the coming year. In 2011,they asked about twenty-two separate issues. Eighty-seven percent described the economy as a top priority, followed by jobs (84 percent) and terrorism (73 percent). Thirty-four percent mentioned "dealing with global trade" as a top priority. The proportion viewing dealing with global trade as a top priority since 2001 has ranged from a high of 37 percent in 2001 and 2008 to a low of 25 percent in 2002. In these polls, the issue has consistently ranked among the bottom five issues tested.
Gallup uses a different approach, asking people to say in their own words the most important problem facing the country. Less than 1 percent in January 2011 told Gallup that trade was the most important issue. Since 2000, in multiple iterations of this question, no more than 1 percent has ever spontaneously mentioned trade. Five percent is usually considered a threshold of significance. It is possible, of course, that people are thinking about trade when they say the economy or jobs (the top problems in recent polls), but it rarely comes up unprompted.
In the 2008 election year, when people were asked by Fortune/Abt/SRBI about issues that would be important to them in the 2008 presidential election, "trade with foreign nations" ranked dead last of eleven issues examined, on par with abortion. Eighteen percent said trade was extremely important. The top issue was the country's economy (46 percent said it was extremely important).
Looking at the 2008 polls provides a useful perspective on the salience of trade. In a February 2008 debate with Hillary Clinton in the hotly contested Democratic primary, then-senator Obama said, "I will make sure that we renegotiate [NAFTA] . . . I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced." A media firestorm ensued after a Canadian television station reported that one of the president's senior advisers, Austan Goolsbee, now serving as chairman of the Council of Economic Advisers, may have suggested to Canadian embassy officials that Obama was not really serious about pulling back on NAFTA and that his tough talk was an attempt to appeal to economically hard-hit Midwestern primary voters. The controversy got quite a bit of attention, and it may have affected public opinion. The sentiments about trade in the April 2008 PSRA/Pew poll when trade was in the news were more negative than the polls conducted before or after that date. (These PSRA/Pew questions appear later in this Outlook.)
Even though trade is not a top-of-the-mind issue for most Americans, it plays a significant role in politics. Our AEI colleagues Claude Barfield and Philip I. Levy have written about the evolution of trade policy and politics in recent years. Barfield argues that "the most fascinating and important events and trends are encapsulated in the evolution of political and policy divisions within the Democratic Party." Barfield and Levy note that a new Democratic era began in 2006, when Democrats took control of both houses of Congress. "Of the 42 newly elected Democratic members of the House of Representatives, a sizeable majority had run on explicitly antiglobal platforms." Before Obama took office in January 2009, they write, these Democrats put their stamp on US trade policy, successfully forcing the Bush administration to include labor and environmental requirements into four pending FTAs.
Barfield and Levy wrote at the end of Obama's first six months in office, noting the split personality of the new administration, with the president taking action to avoid being labeled a protectionist while not pushing trade liberalization as part of his economic recovery program. They described the power of a vocal minority of House Democrats who opposed moving any FTAs forward, even those the president and his trade representative had hoped to advance, such as the Panama and Colombia FTAs. Before the 2010 elections, other priorities such as the health care bill took precedence for the Obama administration. Now it appears that trade (or at least trade talk) has moved to center stage.
In 2010, no nonpartisan preelection national poll in the Roper Center archive that asked people about issues that would be important to potential voters in the November election included trade as a "most important" election issue. In all polls, the economy or jobs were the top issues. Outsourcing became a popular buzzword during the campaign, and trade was a contentious subject in many places on the campaign trail, especially the economically hard-hit industrial Midwest. In the late October 2010 NBC/Wall Street Journal poll, 7 percent of registered voters said the "message" of their vote would be to stop outsourcing jobs. Twenty-one percent, the top response, said it would be to focus more on the economy and jobs.
In the 2010 exit poll conducted by a consortium of the five broadcast networks and the Associated Press, the economy was the top issue for voters nationally. In only one state, Ohio, did the exit pollsters ask about trade or NAFTA. Two-thirds of Ohio voters in 2010 checked a box saying that NAFTA had taken jobs from Ohio, while 9 percent said it had created jobs there and 16 percent said it had had no effect. Of the voters who said it had taken jobs from Ohio, 58 percent voted for Republican Rob Portman for the US Senate and 37 percent for his opponent, Democrat Lee Fisher. Given Portman's experience as US trade representative under President George W. Bush, trade became an especially prominent issue in this race. Fisher attacked his opponent on trade with ads like this one: "Congressman Rob Portman knows how to grow the economy--in China. . . . He voted for billions in tax breaks for companies that export jobs. On his watch as Bush's trade czar, our deficit with China exploded, sending a hundred thousand Ohio jobs overseas. . . . Outsourcing, bad trade deals, soaring deficits. Congressman Portman--a real economic plan, but not for Ohio." Portman won the election by 59 to 39 percent.
The political pendulum swung widely not only in Ohio but also nationally, bringing in a Republican House and more Republicans in the Senate. In the industrial Midwest, Republicans made significant gains. Democrats used negative feelings about outsourcing in many campaigns in the fall--and as is shown later in this Outlook, it is unpopular. But given the election results, it is difficult to say that trade or outsourcing were decisive issues in the 2010 contests.
Slow economic growth, high unemployment, the need to correct a perceived antibusiness tilt, and foreign policy imperatives appear to have caused the White House to rethink trade. Shortly after the 2010 election, the president defended free trade in speeches in India and elsewhere, and as described above, he and his administration appear to be pushing trade agreements more aggressively than in the past. At this writing, we do not have much information about how members of the large Republican freshman class in Congress feel about trade. On March 1, the National Journal reported that "[a]t least 64 of the 87 new House Republicans will sign a letter today urging President Obama to move forward quickly on free-trade agreements with Colombia, Panama, and South Korea." This level of support for FTAs among Republicans is consistent with the recent past, according to Barfield.
Trade in General
In 1993, shortly after NAFTA became law, CBS News and the New York Times asked about trade in general. Two-thirds said that "trade with other countries--both buying and selling products--is good for the US economy," while 20 percent described it as bad. Sixty-four percent of Democrats, 66 percent of independents, and 72 percent of Republicans agreed it was good. When they last asked the question in April 2009, the responses were similar. Two-thirds said it was good and 23 percent bad. The results were remarkably consistent across six identical questions asked over the sixteen years from 1993 to 2009. In each asking, Republicans were more enthusiastic than Democrats, but their responses were not significantly different.
At the same time, however, 56 percent in 2000 and 60 percent in 2009 in another question asked by the same pollsters said that trade restrictions are necessary to protect domestic industries. These two questions sum up a persistent tension in the public's mind. While trade is good in principle, it rarely seems so in practice, so restrictions are necessary to protect domestic industries.
Another question, asked first by Gallup in 1992 and then picked up by CNN and the Opinion Research Corporation in 2007, asks people whether they see foreign trade as more of an opportunity for economic growth through increased US exports or a threat to the economy from foreign imports. In two polls in 2000, when the US economy was doing well, 54 and 56 percent said it was more of an opportunity for growth, the highest responses given on this question. In the latest asking of this question from November 2010, far fewer, 41 percent, gave that response. Half said foreign trade was more of a threat to the economy.
The 2010 NBC/Wall Street Journal question below has been asked five times. It gives people three response categories. The most positive responses came in 1999 when Americans were feeling good about the US economy, and the most negative one came in September 2010 when Americans were feeling very bad about it.
A PSRA/Pew question also shows more positive views about "free trade agreements like NAFTA and the WTO" during good economic times and more negative ones in bad times. In September 2001, nearly half, 49 percent, viewed them positively. In November 2010, 35 percent did.
Both NBC/Wall Street Journal and Pew pollsters report a significant drop in positive feelings about trade among Republicans in their 2010 polls. We have not seen enough polling data to be confident of an explanation for these results. It is possible that Republicans are souring on trade, but it is also possible that they are simply more negative about policies that appear to be associated with the current Democratic administration.
Trade: Who Benefits, Who Is Hurt
In questions about the effects of trade, concerns for American workers and jobs are paramount, and they are almost always negative. This was true before and after NAFTA's passage, and it remains true today, as this NBC News/Wall Street Journal question shows.
In 2004 and 2006, the Chicago Council asked whether international trade was good or bad for various groups. The most negative responses in both years were about job security for US workers. In both years, large majorities said the agreements were good for consumers like them. In a January 2008 Fortune/Abt/SRBI question, a large majority agreed that an increase in international trade has made things worse for American workers, the most negative of five response categories. PSRA/Pew asked about FTAs specifically and whether they create jobs or lead to job losses. In the November 2010 asking, only 8 percent said FTAs create jobs, while 55 percent thought they lead to job losses.
Polls show that Americans think that international trade benefits other countries more than the United States. When Fortune/Abt/SRBI asked in January 2008 if the United States or other countries benefit more from international trade, 68 percent said other countries. Twenty-three percent said the United States. While Americans do not think they come out on top, they do acknowledge trade's benefits for developing countries, as the Pew results here show.
As consumers, Americans are more appreciative of free trade. In 2006, 78 percent told the German Marshall Fund that free trade leads to lower prices and more product choices for consumers. In the 2004 and 2006 Chicago Council question, 73 percent said international trade was good for "consumers like you" and roughly 65 percent in both years said international trade was good for "your own standard of living." A plurality of 48 percent told Fortune/Abt/SRBI in January 2008 that the growth of international trade had made things better for consumers in the United States. Forty-four percent said it had made things worse. But, comparatively, concerns about jobs outweigh the benefits for consumers when it comes to trade. In the same 2008 Fortune/Abt/SRBI poll, when asked if trade was good for the United States because of lower prices to consumers or bad for the United States because of job losses and lower wages, 63 percent said trade was bad due to its impact on jobs and wages. Thirty percent said it was good. In polls taken by the Chicago Council at regular intervals since 1974, "protecting the jobs of American workers" has been the top or one of the top "very important foreign policy goals" of the United States.
In a question asked in late November and early December 2010 by the National Journal's Heartland Monitor poll, 67 percent said that "decisions by American companies to relocate jobs to other countries" had played a major role in the high unemployment of the past few years, while another 28 percent said these decisions had played a minor role. In the 2008 Fortune survey, Abt/SRBI asked people how concerned they were about a variety of issues related to trade, and 68 percent said they were concerned about US workers losing jobs that are outsourced to lower-paid workers in other countries.
To put these concerns in context, however, it is also important to look at a question the Gallup Organization has asked yearly since 2003 as part of an extensive battery of questions about people's work experience. Gallup asks people with jobs whether they are worried that their company will "move jobs to countries overseas." The proportion responding that they were worried about this prospect reached a high of 12 percent in 2005. In August 2010, the latest asking of the question, 9 percent gave this response. For comparison purposes, 39 percent of those with jobs in the same poll said they were worried that their benefits would be reduced and a quarter worried that they would be laid off.
A broader question in the 2008 Fortune/Abt/SRBI poll found 13 percent were extremely concerned about "losing your job or not getting a job you want because of outsourcing to a foreign country or because of foreign competition." Nine percent were very concerned, 15 percent somewhat concerned, 18 percent not very concerned, and 44 percent not concerned at all. The late November-early December 2010 Heartland Monitor poll of employed people, students, and those looking for work found that 12 percent said they worried "a lot" that their employer could decide to relocate their job overseas to someone in another country, 7 percent worried "some" about the prospect, 11 percent not much, and 68 percent not at all.
It is unsurprising that Americans are not enthusiastic about outsourcing, considering their concern about jobs. Yet they do not appear to bear animus toward India, a country that is often portrayed as the repository of many of those outsourced jobs. In a February 2011 Gallup question in which Americans were asked their opinions of twenty-one different countries, India ranked fifth in terms of favorability, ahead of France and behind longtime allies Canada, Great Britain, Germany, and Japan.
While people are concerned over outsourcing as it relates to the health of the country's economy, the level of personal concern is relatively low. The small number of Americans who profess deep personal concern about outsourcing may explain why the issue, used by many Democratic candidates in the 2010 election, appeared not to help Democrats. Outsourcing is a potent political buzzword, but absent deep individual concern, its electoral power appears limited.
American attitudes toward globalization seem to have become more negative since the late 1990s, another possible effect of the more negative views of US economic performance. In October 1998, 20 percent told the Chicago Council and Gallup that globalization was "mostly bad." Fifty-four percent said it was mostly good. When the question was last asked in September 2010, 41 percent said it was mostly bad, a twenty-one-point increase from 1998. In 2000, a narrow plurality of 38 percent told Washington Post/Kaiser/Harvard interviewers that globalization was mostly good for the United States. In January 2008, PSRA/Pew asked the same question and found that a plurality of 37 percent thought globalization was mostly bad, a twelve-point increase from the 2000 Washington Post/Kaiser/Harvard study. Twenty-four percent stated it was mostly good.
When questions do not use the word "globalization," attitudes tend to be more positive, especially for younger Americans. The Pew question shown below that asks about "growing trade and business ties" between the United States and other countries illustrates the point. Solid majorities rate such ties as good for the United States and good for them and their families.
Once again, concern over jobs seems to be the reason behind negative attitudes. In 2002, 2008, and 2010, the Chicago Council asked whether globalization was good or bad for various groups. In 2002, 52 percent said globalization is bad for the job security for American workers. In 2008 and 2010, 65 percent said globalization was bad for job security, a thirteen-point increase from 2002. In all three askings, job security received the most negative response of all the categories. In another question asked by NBC/Wall Street Journal pollsters in June 1997, 48 percent told interviewers that globalization is bad "because it has subjected American companies and employees to unfair competition and cheap labor." Fifty-eight percent gave that response when the question was asked again in March 2008, a ten-point increase.
When discussed in the abstract, globalization is appealing. But questions about its real-world effects reveal uncertainty and hesitancy about a more interconnected world. The growth in negative attitudes roughly coincides with difficult economic times. When uncertainty rises in the economy, so does skepticism toward forces of uncertainty, like globalization. Eighty percent in a January 2011 Washington Post poll said that the global economy was having a great deal or a fair amount of influence on the way things were going in the United States. In another question, only 36 percent rated America's ability to compete economically in the world and deal with foreign economic competition as excellent or good. Thirty-five percent said it was just fair, and 28 percent negative or not so good. When you care deeply about something, as Americans do about our ability to compete globally, you tend to worry about it. Polls reflect that concern.
Some general impressions emerge from this review. First, trade is usually a back-burner issue for most Americans. When people are asked to volunteer the most important issue facing the country, it barely registers. Different polls produce different results about trade generally, though support for free trade has never been robust. Public opinion on trade is closely tied to Americans' feelings about the economy and jobs. When times are good, as they were in the late 1990s and early part of the century, Americans feel better about trade (and, incidentally, many other issues such as immigration, health care, and race relations). As for specifics, the polls are remarkably consistent about who trade benefits and who it hurts. Consumers usually benefit, while workers lose. Questions about an increasingly integrated global economy yield generally positive answers, as do surveys about connecting Americans with people in other countries. Americans appear to support a more globalized trading economy but fear its real-world effects. This deep ambivalence is likely to persist.
Karlyn Bowman ([email protected]) is a senior fellow at AEI. Andrew Rugg ([email protected]) is a research assistant at AEI. This Outlook is based on a longer paper prepared at the request of Jagdish Bhagwati for the Report by the High-Level Group of Experts on Grade, cochaired by Bhagwati and Peter Sutherland, a former director general of the World Trade Organization.
1. White House, "Remarks by the President in State of Union Address," news release, January 25, 2011, www.whitehouse.gov/the-press-office/2011/01/25/remarks-president-state-union-address (accessed March 1, 2011).
2. White House, "Remarks by the President to the Chamber of Commerce," news release, February 7, 2011, www.whitehouse.gov /the-press-office/2011/02/07/remarks-president-chamber-commerce (accessed March 1, 2011).
3. Sara Murray and Douglas Belkin, "Americans Sour on Trade," Wall Street Journal, October 2, 2010.
4. Pew Research Center, "Americans Are of Two Minds on Trade," November 9, 2010, http://pewresearch.org/pubs/1795/poll-free-trade-agreements-jobs-wages-economic-growth-china-japan-canada (accessed March 1, 2011).
5. Associated Press, "The Democratic Debate in Cleveland," February 26, 2008, www.nytimes.com/2008/02/26/us/politics /26text-debate.html (accessed March 2, 2011).
6. Claude Barfield, "Politics of Trade in the USA and in the Obama Administration," Asian Economic Policy Review 4, no. 2 (2009): 227-43.
7. Claude Barfield and Philip I. Levy, "In Search of an Obama Trade Policy," AEI International Economic Outlook (August 2009), www.aei.org/outlook/100063.
9. In 2002, the Chicago Council worked with Harris Interactive. In 2008 and 2010, it worked with Knowledge Networks.