Watch Out, Obama: Only Israelis Believe Trade Will Cut Prices for Consumers – Real Time Economics

President Barack Obama and other world leaders are having a tough time selling the benefits of the trade agreements they’re negotiating, in part because much of the public thinks all the talk about trade’s benefits is a bunch of baloney.

Out of 44 nationalities surveyed this year, only one — Israelis — tends to believe the basic tenet of economists that increased trade will foster competition and deliver lower prices for consumers.

On a broader question of whether increasing trade and business ties with other countries is a good thing, only 68% of Americans agree, compared with 76% worldwide, according to the study released Tuesday by the Pew Research Center.

Despite the economic recovery in the last four years, Americans’ positive views toward trade have increased only slightly and remain well below 2002 levels, when 78% thought growing trade and business ties were good. Among Americans, the poor, women and seniors are less likely to see benefits of trade.

To be sure, skepticism about trade is nothing new, and many Americans have watched manufacturing jobs move overseas for a variety of reasons, including international agreements.

Part of the problem is political in the U.S. and Japan, which are leading the negotiations to form the Trans-Pacific Partnership.

Mr. Obama, who supports the TPP negotiations and similar talks underway with the European Union, leads Democratic lawmakers who have typically opposed recent trade deals, partly over concerns about lost manufacturing jobs. Japanese Prime Minister Shinzo Abe faces similar opposition in his own party over farming profits.

To counter this, the Obama administration touts the increased exports that would come from a well-negotiated trade agreement, an outcome likely to boost high-paying manufacturing jobs.

But some business leaders and other backers of trade deals say the president is presenting only half of the equation on trade, focusing on the benefits to U.S. exporters and manufacturers but not to U.S. consumers, who economists say enjoy lower prices, especially on imported goods, when tariffs fall and international competition rises.

For many critics of trade deals, the idea of lower prices through trade deals conjures up big-box retailers with low-paying service jobs and products imported from abroad. Of course, lower prices can also lead to a higher standard of living and greater profitability for businesses.

But don’t tell that to the world’s electorate. Israel is the only country surveyed by Pew where a majority–58%–says international trade leads to price cuts. In the U.S., only 35% accept that proposition (the same as in the Palestinian territories). In China, it’s only 18%.

 

 


 


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16 September 2014 | 10:00 pm – Source: blogs.wsj.com

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