Do
Americans Agree with Trade Agreements?
by Susan Ariel Aaronson, Ph.D., and Kyle Renner, GWU Elliott School of
International Affairs
Overview: The Economic and Political Context
Americans are deeply concerned about the economy. Voters want candidates to
show what they can do to help investors create jobs, stave off a recession,
stabilize the U.S. stock market and halt the never-ending ascent of oil prices.1
Few Americans see the solution to these problems in new trade agreements.
But trade agreements at the bilateral and multilateral level can stimulate
economic growth in the U.S. and abroad. Over time, more exports generally
mean firms can hire additional workers and reap what economists call economies
of scale and scope. They can produce more goods and services more cheaply
over larger markets. And, this in turn often leads to higher profits and higher
stock prices. Ever so gradually, the economic growth linked to multilateral
trade liberalization may help more Americans save for their children's education,
their retirement, and afford houses, healthcare, and consumer goods.
But many Americans do not "see" or "realize" the benefits of trade agreements until years after their approval. Moreover, individual bilateral and regional trade agreements have little impact on the American economy as a whole, although they can have both a positive or negative impact on specific sectors.
Today, trade is increasingly
contentious. The American public is generally pro-trade, but frightened by
trade agreements. Voters want policymakers to do a better job of enforcing
existing trade agreements. Moreover, Americans have little understanding of
what trade agreements do, why the U.S. negotiates so many trade agreements,
and how these agreements affect them in their many roles as citizens, taxpayers,
friends of the earth, producers, consumers, parents etc.... 2
Policymakers generally talk about trade agreements as "opening markets"
or freeing trade. In addition, policymakers argue that trade agreements create
jobs or help to set a "level playing field" for U.S. producers in
foreign markets. These CAN BE side effects of trade agreements. But, trade
agreements themselves do not free trade.
Trade agreements facilitate expanded trade because they allow two or more nations with very different governance systems, funding, will, and expertise to find common ground on the many rules (from health and safety standards to procurement policies) that can affect trade flows. Thus, trade agreements increasingly affect domestic regulations that may, without intent, distort trade. Trade agreements essentially reregulate relations between countries. They set common rules regarding how and when nations can apply regulations that distort trade. They also allow U.S. interests to participate in and influence foreign decision-making in areas related to trade (thus this includes labor conditions in China or environmental conditions in Guatemala). In so doing, they make foreign governments accountable not only to their citizens but to foreign market actors. In countries that have long been opaque and relatively undemocratic such as Saudi Arabia (which just joined the WTO), they create new norms of due process and transparency. Thus, they are essential tools to improve governance as well as stimulate economic growth.
In the next few months,
Congress will vote up or down on trade agreements: with Colombia, Panama,
and Korea. Congress has problems with each agreement. Members are concerned
about labor rights and extra-judicial killings in Colombia; while auto-trade
and food trade issues make the Korean agreement contentious. The Panama agreement
is expected to be approved, but it too has political problems. The Panamanian
National Assembly elected as leader a man wanted in the U.S. for the murder
of a U.S. soldier.3 Meanwhile, U.S. trade
negotiators are continuing to negotiate the Doha Round of trade talks under
the WTO-the multinational trade agreement adhered to by 152 nations.4
These web pages will provide Americans with some of the information they need to make informed decisions about trade agreements, what these agreements do and include, and how they affect Americans in their daily lives. We will also answer why the U.S. participates in so many (over 400 as of 2006), and whether or not these trade agreements undermine our sovereignty or undermine our economy. We will be discussing why the Bush Administration has focused on these bilaterals, but won't address the specifics of these bilaterals. Finally, we will also link to a wide range of sources on trade agreements such as www.tradeagreements.org and www.bilaterals.org. Finally, as this is an educational site, we want to make our own biases known up front. We believe trade agreements are essential tools to help make globalization both more equitable and efficient, but we also believe the dialogue about trade agreements is incomplete and at times dishonest. Thus, we created these pages to help you come to your own conclusions. We hope that these pages will give you the tools to understand what the candidates say about trade policy (please see table below). We will also link to summaries of the candidates' views on trade.
We welcome your questions and suggestions.
(Click here
to see a table summary of this paper's findings.)
1. http://www.washingtonpost.com/wp-srv/politics/polls/postpoll_020308.html?sid=ST2008020400314 ; also see polling data cited by Edward Luce, "Economy to Dominate U.S. Presidential Race," Financial Times, 14 January 2007, www.ft.com/cms/s/0/b09ac46-c2d0-11dc-b617-0000779fd2ac and Peter Baker and Dan Balz, "Economy Slumps to the Top of the Campaign Agenda," Washington Post, 11 January 2007, www.washingtonpost.com/wp-dyn/content/article/2008/01/10/AR2008011004055.html.
2. For an interesting albeit short summary of 2007 polls on trade, see http://benmuse.typepad.com/custom_house/2008/01/2007-trade-poll.html; also see Mark Champion, "Fewer Americans Favor Free Trade, Study Finds," Wall Street Journal Online, 5 December, 2007, which reported on the German Marshall Fund Study
3. Doug Palmer, "President/Congress Headed for Clash on Trade Agreements," Reuters, 12/14/2007, at http://www.citizenstrade.org/pdf/reuters_tradedealclash_12142007.pdf.
4. http://www.wto.org/english/tratop_e/dda_e/dda_e.htm