Thursday, October 04, 2007

Republican Voters Shifting to Protectionism

A new Wall Street Journal/NBC News poll shows Republican voters growing increasingly skeptical of free trade policies:

By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president....

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. That represents a challenge for Republican candidates who generally echo Mr. Bush's calls for continued trade expansion, and reflects a substantial shift in sentiment from eight years ago.
Take a look at the article. In my view, the findings of GOP unease with free trade reflect a broader unhappiness with the greater forces of globalization, and especially GOP concerns surrounding illegal immigration and border security (48 percent of Republicans oppose the administration's proposal for a guest worker program). The survey indicates a breakdown of the conservative concensus on economic and regulatory policies. For example, the survey finds a plurality of Republicans supporting tax increases to fund health care and other items:

In part, the concern about trade reflected in the survey reflects the changing composition of the Republican electorate as social conservatives have grown in influence. In questions about a series of candidate stances, the only one drawing strong agreement from a majority of Republicans was opposition to abortion rights.

Post-9/11 security concerns have also displaced some of the traditional economic concerns of the Republican Party that Ronald Reagan reshaped a generation ago. Asked which issues will be most important in determining their vote, a 32% plurality cited national defense, while 25% cited domestic issues such as education and health care, and 23% cited moral issues. Ranking last, identified by just 17%, were economic issues such as taxes and trade.

The WSJ poll appears to buttress some of the findings from the Washington Post's recent survey, which found increasing numbers of business professionals shifting to the Democratic Party.

The Republican shift on trade policy is a toubling development for American international economic policy. A shift toward protectionism - perhaps under a new Democratic administration in 2009 - is the last thing the U.S. needs. Since World War II, the U.S.-led liberal international trade and monetary regimes have provided the economic foundations for world growth and prosperity. Both developed and less-developed nations thrive on open markets and access to the diversity of the world goods and human resources. Rising protectionism threatens these achievements.

In a 2005 Foreign Affairs article, Carla A. Hills, who was U.S. Trade Representative during the G.H.W. Bush administration, reviewed the stakes involved in the continued push for trade expansion:

The U.S. experience since World War II proves that increased economic interdependence boosts economic growth and encourages political stability. For more than 50 years, under both Democratic and Republican administrations, the United States has led the world in opening markets. To that end, the United States worked to establish a series of international organizations, including the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)....

The results to date have been spectacular. World trade has exploded and standards of living have soared at home and abroad. Economist Gary Hufbauer, in a comprehensive study published this year by the Institute of International Economics, calculates that 50 years of globalization has made the United States richer by $1 trillion per year (measured in 2003 dollars), or about $9,000 added wealth per year for the average U.S. household. Developing countries have also gained from globalization. On average, poor countries that have opened their markets to trade and investment have grown five times faster than those that kept their markets closed. Studies conducted by World Bank economist David Dollar show that globalization has raised 375 million people out of extreme poverty over the past 20 years.

And the benefits have not been only economic. As governments liberalize their trade regimes, they often liberalize their political regimes. Adherence to a set of trade rules encourages transparency, the rule of law, and a respect for property that contribute to increased stability. Without U.S. leadership...the world would look very different today.

The United States has an interest in continuing this progress. Republican voters worried about the effects of trade on their economic well-being have legitimate fears, although ultimately the gains from trade will exceed the pain incurred by trade-induced economic dislocation. Candidates in the GOP presidential field need to provide public leadership on this issue, rousing the party's base to a greater understanding of the benefits of international trade openness. Recent Democratic Party statements in favor of trade policy protectionism present a much more damaging alternative to the American economy in the long run.

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