Topic: Trade and Immigration

How Do Americans Really Feel about Trade?

As it turns out, it’s pretty difficult to tell! Much, apparently, depends on how the question is phrased.

Today, the Washington Post reports findings from the latest Pew Global Attitude Project report, which was released yesterday. The Pew study finds that 59% of Americans have a positive view of trade, while 36% have a negative view. The results differ to some extent by demographic characteristics like age, income, and political party affiliation. Pew found that 64% of Republicans believe “the impact of trade on our country is good.”

That figure differs vastly from the result of the WSJ/NBC poll (about which I wrote yesterday), which found that 59% of Republicans believe that foreign trade has been bad. What explains these nearly diametrically opposite conclusions? A very significant factor appears to be the question phraseology.

In the WSJ/NBC poll, the respondent was asked to identify the statement that came closer to his/her point of view.

Statement A: “Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers.” (32% of Republicans agree)

Statement B: “Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced U.S. demand for American-made goods, cost jobs here at home, and produced potentially unsafe products.” (59% of Republicans agree)

In the Pew poll, the respondent was asked the following question:

What do you think about the growing trade and business ties between the
United States and other countries — do you think it is a very good thing, somewhat good, somewhat bad or a very bad thing for our country?

Pew tallied the “very good” and “somewhat good” responses and found they represented 59% of total respondents, and 64% of Republican respondents.

What does this all mean? It means that respondents provide answers to questions as asked, and that it is the data interpreters who give too much meaning to the responses elicited by their questions. Neither the Pew question nor the WSJ/NBC question probes peoples’ comprehensive views about trade (and it is evident to me, as I wrote yesterday, that the phrasing of the WSJ/NBC questions biased the results). Nevertheless, the written summary of the results of each poll would have the reader believe that each poll is dispositive of the issue.

That the question phraseology appears to be a determinant of the answer suggests that a better way to discern Americans’ views about trade would be to ask a multitude of questions — including redundant questions phrased differently.

Two figures that appear to be credible from the Pew report are a bit disconcerting. The same question asked of Americans was also asked of citizens in 46 other countries. Positive views of trade were lowest in the United States. And the 59% holding positive views constitutes a huge drop off from 2002, when the same question from Pew found 78% of Americans holding positive views on trade.

Thus, while it appears that Americans are souring on trade, it is hard to tell how many Americans are how sour.

Correction to Yesterday’s Post, (Lies, Damn Lies,…)

Yesterday on this blog, I posted my criticisms of a WSJ/NBC poll and a WSJ article that was based on that poll. Although I firmly stand by my central criticism that there was a clear bias in the phraseology of Question 10 that was completely unnecessary, I made a factual error in my post that I wish to correct.

In paragraph four, I assert (about the poll) that “no questions were asked about whether the respondents would agree with a Republican candidate who favors tougher regulations to limit foreign imports.” But it was subsequently brought to my attention that such a question was asked at question 7.7 of the poll. I stand corrected.

Had I not overlooked that question, I would not have criticized the author for reporting a “phantom result.” I apologize to John Harwood for the assertions and implications related to that point.

With the exception of the second and third sentences of paragraph four, the entire blog post, with the same tone and same conclusions, remains valid.

Lies, Damn Lies, Statistics, and a Media Happy to Abuse Them

The Wall Street Journal reports ($) today that support for free trade is fading among Americans who are likely to vote Republican.  Perhaps that’s true.  It certainly wouldn’t be surprising given the way most Americans are misled by their political representatives and the mainstream media about how to measure trade’s impact on the economy.

But something really smells about today’s lead article in the WSJ.  The WSJ/NBC News poll upon which the article is based simply doesn’t support the author’s conclusions.  In fact, the article is misleading in ways I find inexcusable for a newspaper of that caliber.   If you weren’t already, you should be highly skeptical of polling results (at least as reported second hand).

The third paragraph in the article reads: “Six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports.”  Next to that paragraph is a graphic box with a bar chart showing responses to the question: “Is foreign trade good or bad for the U.S. economy?”  The “Good” bar showed 32%; the “Bad” bar showed 59%.

Here’s the first problem.  That question (“Is foreign trade good or bad for the U.S. economy?”) was not asked in the poll.  The second problem: no questions were asked about whether the respondents would agree with a Republican candidate who favors tougher regulations to limit foreign imports.  But that didn’t stop the author from reporting that phantom result in paragraph three.

Here is a link to the subject WSJ/NBC poll.  Question 10 is the only question about trade, which gives two statements and asks the respondent to reveal which statement comes closer to his/her point of view.

Statement A: “Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers.” (32% of Republicans agree)

Statement B: “Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced U.S. demand for American-made goods, cost jobs here at home, and produced potentially unsafe products.” (59% of Republicans agree)

From these results, John Harwood concludes that “six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports.”

But as you can see, there is a clear bias in the manner of phrasing the questions.  You’re not agreeing that foreign trade is good or bad, but that it’s good or bad because… And respondents are more likely to be familiar with one of the offered consequences of trade.  Certainly, the issue of “potentially unsafe products” is fresh on our minds, thus respondents are basically escorted to that answer.

What bugs me most about this is that the competing statements: foreign trade has been good for the U.S. economy vs. foreign trade has been bad for the U.S. economy would have been perfectly objective phraseology.  Why introduce subjective perspectives?

That a professional polling agency would introduce such obvious bias into its polls and a major newspaper would ignore the obvious problems with the results is troubling.  For all we know, Ron Paul and Mike Gravel are the leading candidates for their respective parties’ nominations.

CORRECTION: The poll did ask about a Republican candidate who favored tougher regulation. See here.

Which Part of “Not Green Box” Does the USDA Not Understand?

After a long wait, the United States finally notified the other members of the World Trade Organization of its spending on agricultural programs today. Although timely notification is supposedly a key requirement (and benefit) of the WTO, the U.S. had left members in the dark as to the true nature and extent of its farm subsidies since 2004, and that notification covered only the years up to 2001.

Today’s notification asserts that U.S. spending on so-called “Amber-box” domestic support (that which is linked to production and/or prices of agricultural commodities, and thus is the most market-distorting) was well below its limit of $19.1 billion in every year between 2002-2005 (the period covered by the latest notification). However, sources tell me that the administration admitted in a telephone press conference today that direct payments were classified as “green box” (spending which is at most minimally trade-distorting and therefore not subject to reduction commitments) in their calculations, in direct contravention of a 2005 WTO Appellate Body ruling on U.S. Cotton programs, which stated (at para. 342) “[P]roduction flexibility contract payments and direct payments … are not green box measures exempt from the reduction commitments by virtue of Annex 2 of the Agreement on Agriculture.” (my emphasis)

Seems pretty clear to me.

In other words, if direct payments are properly classified as amber box measures, the United States’ spending might look very different, and may not be below the legal ceiling after all, especially in years 2004 and 2005 (see more here). Members of Congress currently writing a new farm bill might want to keep the threat of WTO litigation (including pending challenges by Canada and Brazil) in mind.

Trade Telltale

Since the “Great Compromise” on trade policy between the administration and Congress last spring, I have been outspokenly skeptical about prospects for further trade liberalization before 2009.  In that deal, the administration bowed to the wishes of Congressional Democrats to include enforceable labor and environmental provisions in pending and prospective trade agreements. 

For that accommodation, the Congressional leadership was supposed to help secure passage of the pending bilateral agreements with Peru, Panama, Colombia, and Korea.  Almost immediately, though, the leadership voiced additional concerns about Colombia and Korea, which are widely considered to be very long-shots at best.

But after visiting Peru last month and getting his own fingerprints on the final details of the deal, House Ways and Means Committee Chairman Charles Rangel of New York returned home and voiced his support for the agreement.  And, it appears, there is support for the Peru agreement among members of Ways and Means and Senate Finance.  Several Congressional staffers have suggested that if the Peru vote garners relatively strong Democratic support, there may be hope for the others.

The problem, however, is that the House Democratic Caucus may not be prepared to follow.  Remember all of those freshman Democrats who campaigned in ’06 on an anti-trade message?  It seems they won’t go quietly into the night.  Whereas the veteran Democratic trade leadership may be inclined to use protectionist rhetoric to shift the terms of the trade debate in their favor, the new blood in their caucus is more inclined to believe it.  In that regard, the Rangels and Levins and Baucuses on the Hill (guys that probably know better) have helped create a potential Frankenstein.

On Friday, rank and file Democrats addressed a letter ($) to their Caucus Chairman, Rahm Emanuel of Illinois, asking that the next caucus meeting be devoted to the U.S.-Peru Agreement.  The letter notes that there isn’t much support for the agreement among Democrats and that the Ways and Means Committee markup scheduled for tomorrow will prove divisive.

There were only seven signatories to the letter and it is unclear how representative it is of Democratic sentiments.  But if the topic proves divisive and rancorous – a development Nancy Pelosi wants to avoid – it will be interesting to see which side the House Speaker chooses to rein in.  The outcome of this potential impasse will tell much about the direction Democrats want to go on trade.

The True Leaders of Trade Liberalization

A great article today [subscription required] in the Financial Times reminds us that business deals, and not formally negotiated trade agreements, are driving globalization.

That’s not to say that a good outcome on the Doha round wouldn’t be welcomed (and things are looking up on that score). But preferential trade agreements are often not the historic breakthroughs that politicians make them out to be. They make great photo-ops, though.

Senate Now Debating the Manner in Which to Fleece You

After a disastrous result in the House of Representatives, the farm bill debate has moved on to the Senate, where the main conflict is about how to provide assistance to farmers. Senator Max Baucus (D, MT), who sits on the Agriculture Committe but also holds the purse strings as Chairman of the Senate Finance Committee, favors a permanent weather-related disaster relief fund alongside more “traditional” farm subsidies. The Chairman of the Senate Agriculture Committee, Tom Harkin (D, IA) prefers government subsidies based on farm revenue rather than commodity prices, and more spending on “renewable fuels” and conservation of farmlands.

Sen. Harkin wants about $10 billion dollars over the amount currently slated for farm programs to pay for his pet projects, but Sen. Baucus has made it clear that if Sen. Harkin wants more money, then he has to dance somewhat to Mr. Baucus’ tune. Sen. Harkin has in recent days appeared more open to a “modest” permanent disaster-assistance program if it means he gets his money (see here). Something tells me that Sen. Harkin’s definition of “modest” might be different to mine. Nor am I convinced that a permanent disaster relief trust fund would prevent Congress from approving extra disaster funds along the way.

The administration has issued a veto threat, but on ominous grounds. For example, the administration does not like the tax package that the House approved to pay for extra money for food stamps and sees the House income cap of $1 million dollars annual adjusted gross income as an insufficiently tight means test. As well they might, because it would affect only 7,000 farmers.

The veto threat is ominous because (a) it is based on things that are minimal and easily fixed relative to the entire package itself and (b) President Bush passed the similar 2002 farm bill without too much wailing and gnashing of teeth. At no point has the administration seriously questioned the rationale for these programs. While the President may have little to lose this time by vetoing the thing, Secretary of Agriculture Mike Johanns is reportedly seeking the Senate seat vacated by Sen. Chuck Hagel in Nebraska in 2008. Secretary Johanns has pushed strongly for reforms of farm programs until now, but presumably he would not want to campaign after being behind a farm bill veto.

Here’s an idea: instead of spreading the love around to more farmers (like the $1.6 billion in extra spending for fruit and vegetable growers who have traditionally missed out on largess), tinkering with the income limit and changing the method by which we give money to farmers, how about we scrap the whole thing altogether? See here and here for starters.