THE WILDCATTERS: Economists, Public Opinion, and International Trade

Among the more fascinating aspects of politics are those curious intersections where expert analysis and popular opinion collide. Perhaps nowhere is this disconnect more obvious than on international trade. Economists routinely and almost uniformly praise free trade as an engine of economic growth and job creation. Policy-makers, once in office, tend to follow suit because—quite wisely—they tend to listen to the economists, even if on the campaign trail free trade is an anathema. 

In one of his lasting political legacies, Bill Clinton worked against labor union opposition to pass the North American Free Trade Agreement. That decision, among others, was economically responsible but politically damaging and, subsequently, has cast a long shadow on Hillary Clinton’s pursuit of the presidency. The Clintons, so the logic goes, sold out the Democratic Party’s working class voters. More recently, as Secretary of State, Hillary Clinton supported—and advocated for—the Trans Pacific Partnership (TPP). Our view, however, often depends on where we sit and candidate Clinton better understood that the TPP (and free trade agreements more generally) might be good for the country but were bad for her presidential ambitions.

In a democracy, it is better to play to the public’s misperceptions than to challenge them.

This discrepancy in public beliefs and expert analysis on trade is hardly novel. In 1935, E.E. Schattschneider noted the dilemma: The benefits of lower costs goods and economic growth were broad and mostly invisible; the costs—closed factories, lost jobs, and the “giant sucking sound” ― were easy to see, hear, and feel.  (Nicely summarized here by David Bartlett). 

That said, public opinion on trade is more mixed, contradictory, and inconsistent than negative. On the one hand, the public generally supports international trade in the abstract. In a recent Gallup Poll, for example, 58 percent of Americans said trade was “more of an opportunity for economic growth” than as a threat to the economy (34 percent). Perhaps even more notably, the percent of Americans who see trade as an opportunity has increased recently from 46 percent in 2012 to 58 percent in 2016. As the rhetoric on trade has become more negative, the public has grown more supportive, at least in the abstract. The shift has not been politically neutral. Democrats have grown more optimistic about trade as Republicans (especially Trump supporters) have grown more pessimistic.  

On the other hand, public opinion is decidedly more negative when it comes to existing trade agreements, with the public believing that, too often, the U.S. loses more than it gains. In a CBS News poll (July 2016), for example, 55 percent of registered voters and 76 percent of Trump voters said the U.S. has lost more than it gained from global trade agreements. Public opinion is equally skeptical about the impact on jobs, believing the U.S. economy is losing more jobs than it is gaining. Finally, public opinion toward trade is more negative in the United States than in other countries (including advanced, emerging, and developing nations). Only 20 percent in the U.S. public said that trade agreements create jobs compared to 44 percent in other nations with advanced economies and only 17 percent in the U.S.  said that trade agreements increase wages compared to 28 percent in these other advanced economies.  

Parsing Donald Trump’s statements, he may be well-aligned with public opinion: Opposed not to trade in principle but opposed to the “horrible deals” that cost U.S. citizens jobs and lower their wages. Consider, for example, the following statements:

 Our horrible trade agreements with China and many others, will be totally renegotiated. That includes renegotiating NAFTA to get a much better deal for America and we’ll walk away if we don’t get the deal that we want.

Curiously, it is a position that remains at odds with economists. When the Economic Experts Panel was queried to respond to the following statement, most economists (64 percent) disagreed.

An important reason why many workers in Michigan and Ohio have lost jobs in recent years is because US presidential administrations over the past 30 years have not been tough enough in trade negotiations.

Of those economists who didn’t disagree most said that had “no opinion” or that they were “uncertain.”  There was even more agreement (83 percent) when economists were asked to agree or disagree that “past major trade deals have benefited most Americans,” and when specifically asked whether trade with China (85 percent) or the North American Free Trade Agreement (85 percent) made most Americans better off.

The bottom line, according to political scientists Edward Mansfield and Diana Mutz, is that public opinion toward trade mostly reflects non-economic considerations: (1) news coverage of trade which is decidedly negative and focuses on job losses; and (2) attitudes toward other countries and “people who are different.”  

In a democracy, we often worry that our leaders are out of touch with the public. At least on some issues, the bigger problem is that they are responsive to public opinion even when doing so is not in the public’s best interest.