Global Issues in Campaign '08: Prosperity or Protectionism?: Jobs, Trade, and American Votes

Three economic experts discuss how trade issues will play in the 2008 presidential election.

JULIA E. SWEIG: Well, let me thank all of you for coming today and introduce briefly our speakers, who'll introduce very briefly since you have their bios with you.

I'm Julia Sweig. I direct the Latin America program here at the Council, and we are with this session today launching a series that will take a look, focusing mainly on Latin America. Today is a departure on the intersection or interaction between globalization and democratization in this hemisphere.

We have been fortunate to have support, for which I'm thankful, from the Kellogg Foundation for this. And also from the Council, and I'm happy to see to see that my colleagues, Sebastian Mallaby and Ed Alden, are also here, senior fellows at the Council who work on many of these issues.

And let me say very briefly that I have been really honored over the last few years to get to know Andy Kohut and to work with him a little bit in parallel, sometimes overlapping on issues related to America's image in the world. And have been happy to be able to follow the process of the survey of Latin America attitudes that's part of this global survey that Pew has been doing now for -- since 2000 and --


SWEIG: Two, actually, so it's great to be able to have Andy here.

What we'll do today -- I'll tell you what we'll do in a second. We also have Steve Weisman of The New York Times and Paulo Sotero, now running the Brazil program at the Wilson Center. And we've asked the two of them to come, and after Andy gives an initial presentation -- it's a little bit un-Council-like, because we've given our speakers an entire 10 minutes to speak in their opening remarks. (Laughter.) So they'll each take about 10 minutes -- Andy first, then Paolo, concluding with Steve -- to look generally and then comparatively at Latin America and Asia. And I'll then get them going in a conversation and open it up to you.

So thank you so much for coming to this. I think you'll find, from Andy's talk and if you actually get into the meat of this, some quite complex and sometimes counterintuitive findings of these last three studies.

So without further ado, Andy Kohut.

KOHUT: Thank you, Julia. I'm delighted to be here to talk about some of the findings from the Pew Global Attitudes Survey. This year we interviewed in 47 countries with a very long interview, 40 minutes of -- 40 minutes. Much of it had to do with the image of America and things other than trade and globalization, but we spent a lot of time asking people about their lives in very simple ways. How do they feel about things, how are they better off than they were five years ago, how do they feel about their incomes, their families, and so on.

Now, this is a repeat of a survey that we did in 2002 with about 43 countries, so what we were able to do for the first time is look at how things have changed. And I want to review two sets of findings, or trends, that are different from each other. One seems pretty obvious, but I think it's not often acknowledged by policymakers. And the other is not so obvious, and -- but may well play an importantly increasing role in world trade policy.

First, for the obvious-but-not-acknowledged trend, and that is over the past five years many middle-income countries and emerging nations have become richer. And as a consequence, their people are happier with their lives, especially with their income. They express a much greater sense of personal progress than they did in 2002. In fewer instances across the board in these countries people tell us that they didn't have enough money in the past year for food, for health care, for clothing. And in many of these countries, not all of them, but in many of them we see more people saying, "We're satisfied with the country. We're on the right track." This -- the popular right-track question.

At the same time, in the developed countries, who in absolute -- where people in absolute terms are happier with their lives -- they're more contented, they're certainly not deprived -- the survey showed no change over the past five years. So we essentially got the same results that we got in 2002, and that's because most of these countries did not experience any great GDP growth relative to what we see in Latin America, Eastern Europe, and among the publics of the Asian economic superpowers.

There was a stunning -- from a polling perspective, a stunning correlation in this survey. There was a .55 correlation between GDP growth in -- between 2002 and 2007, and changes in how happy people said they were. A .39 correlation between GDP change and increased sense of personal progress, and we see the same thing with satisfaction with income and many other indicators in the survey.

The gains were especially sharp in Latin America. Now, I'm not going to read you a long list of statistics, but I'll give you a few. In Argentina, which was obviously an extreme case, the percentage of people happy with their life went from 44 (percent) to 59 percent, and there was a 44 percent increase in GDP growth over that five-year period. In Mexico, much more modest, 58 (percent) to 76 (percent) -- 58 percent happy then, 76 (percent) happy now, a 13 percent gain.

In Eastern Europe, we saw some of the most robust gains in GDP over this period, and really substantial increases in happiness. In the Ukraine, 18 (percent) to 32 (percent), those are the happiness numbers, a 47 percent increase in GDP. I'm going to stop there and just give you India and China, because they're mind-blowing. China, 23 (percent) to 34 (percent), reflecting a 58 percent gain in GDP. In India, 29 (percent) to 41 (percent), representing a 38 percent gain in GDP.

It's important to note that increased happiness and satisfaction with life didn't occur in all countries that -- all poorer countries that experienced these GDP gains. In particular in Africa, the trickle-down effect was pretty modest, at best, although you could see some signs of it. But when you turn to Europe, it's quite apparent that not much was going on economically and, therefore, not much was going on in the way people judged their lives now versus then. France, 57 percent were happy with their lives five years ago, 57 percent in the current survey, a 6 percent net gain over that period. You see similar patterns in Germany, Italy, and even in the United States, although the United States is a little bit better, as is Britain.

Overall, you know, the conclusion is that poorer countries become wealthier; their public's lot in life improves. And people express more happiness, more contentment with not only their lives but with their countries. But lack of growth, even in wealthy countries, does lead to disenchantment, particularly discontent with the course of one's nation. I would put that in the obvious-but-not-often-recognized category.

In the not-so-obvious -- at least it wasn't obvious to me -- the survey showed that support for global trade, which has declined among the publics of advanced nations that have -- whose leaders and corporations have fathered globalization. While there's still strong majority backing for global trade, it declined over this two-year -- or five-year period in Italy, France, Britain, Germany, and the United States. The drop in the United States was the most dramatic.

In 2002, 78 percent of the people that we interviewed said they thought global -- they approved of global trade, or had a favorable view of it. In the current survey, it was just 59 percent. Now, if you ask that question not about global trade, you ask it about free trade, that number of 59 goes down to 44 percent. Americans are not happy with trade, and Europeans in many developed nations are less happy than they once were.

In contrast, support for trade remains very high in poorer countries and only somewhat more muted in what we call middle-income countries. And here's the interesting thing, from a polling or statistical sense. There is a .49 inverse correlation between a nation's level -- relative level of GDP today and support for global trade. That is, the poorer countries are more supportive and the richer countries are less supportive.

Along with these trends in support for global trade, we also saw more favorable views about free markets. Majorities in 39 of 47 countries said that they believe their people were better off in free markets, even though some people are rich and some people are poor. In 17 of these 35 countries with this comparative data, there was a major increase in support for capitalism. That was the case in Argentina, Mexico, even in Venezuela. In Venezuela, despite its leftist leader, the percentage of people saying they favored a free market even when some people are rich and some people are poor went from 63 (percent) to 72 percent. In Mexico, 45 (percent) to 55 percent.

So leftist leaders notwithstanding in Latin America, there was more growth -- there was more support for free trade than we found five years ago. There was also very, very positive -- (music plays in background) -- I'm going to get a little music to my -- (laughter).

PAULO SOTERO: This is a radio station.

KOHUT: I don't know that tune! (Laughs.)

SWEIG: Everybody take a moment, please, to check your cell phones and turn them off in here.

KOHUT: I'm almost finished. (Laughter.)

So I would say there's a gap between the leaders and the publics in rich countries and in poor countries. The strongest support for free trade comes among the publics where the leaders have not been the principal advocates of free trade and global trade. And there's weakening support in the West where the leaders and the corporations have been the biggest advocates and promulgators of global trade. And those are the two things that I wanted to call to your attention.

And thank you very much. (Applause.)

SWEIG: Thank you very much, Andy.

Now, Paulo, you have the option of going up to the podium if you wish, or you can stay --

SOTERO: Yeah, I prefer to --

KOHUT: You don't really have that option, because we're kind of wired in here.


SWEIG: Well, you can actually unmike and go there, if you'd like. But --

SOTERO: No, I -- can I do it from here? I prefer -- Thank you, Julia, for the invitation.

SWEIG: Paulo, thank you so much for coming.

SOTERO: And, now, I have two observations about reading those fascinating findings -- first. You know, we have always been happy in Latin America. Come on. (Laughter.) It's nice to see the data catching up with us, you know? (Laughter.) And the other thing is to see how rational we are. It's amazing, the rational people. The conclusions here are that we are very satisfied with our own lives, we are very doubtful about our nations, but we generally like our governments, which is pretty rational to me.

The reason why this level of satisfaction, I think, shows the way it shows here has to do with some things that are with the economy, obviously, as Andrew pointed out. Has to do with higher commodity prices all over the world, and that's what explains happiness in Venezuela, happiness in Brazil, in Argentina. That's what justifies growth.

But there is something that is captured, I think, in a couple of the tables, which is the impact of distributive policies in Latin America. We have always had distributive policies in Latin America, but for the rich. They have always distributed for the rich. And for the first time, in a different way, it doesn't matter if it's sustainable or if it's not sustainable. The fact is that if you are a poor person in Latin America right now, you are better off.

Actually, there is a statistic about my own country that happens to be one of the most unequal societies and unjust societies on Earth, where the lowest 10 percent of the -- income per capita has seen their income grow at Chinese levels since 2001. Brazilian poor, in that level, their income is growing by 10 percent a year. So, obviously, you have that impact on those numbers.

And you go to the countries and you see that people are generally more satisfied. Argentina came back from a crisis; Venezuela is doing very well because of oil prices and distributive policies. Brazil, the same. I would say the same in Bolivia. So this is captured there.

There's another thing that -- I think is illustrated by some of the findings. We have different types of leadership in Latin America today. In Brazil, the clear example is the first man of the people, in this very unjust, unfair country, that come to power. So people feel represented; Brazilians feel represented by their government. Doesn't matter if the government is doing okay, is doing very well or not so well. Actually, less than 50 percent of Brazilians think the government is doing well, although we have the most popular leader in our history in Brazil and in Latin America -- which, again, gives me an indication of how rational we are in Brazil.

But the fact is that in other countries -- for instance, Chavez, many don't like him because he is a caudillo, but he's a different type of caudillo. He's a caudillo that really came from the people -- through the ranks of the military, but he's not your typical caudillo.

Actually, Bachelet is a socialist, mainstream politician, but it's a woman. It's the first time that a woman occupies that position in Chile. And Nestor and Cristina Kirchner are peronists, but they are different types of peronists; they come from the provinces. So you have, in different ways, more representation. Democracy is making those -- it's enlarging the representation in Latin America. In that sense, it's doing very well.

I think that the other couple of issues that brought my attention in this, as I told you, the fact that we can see -- be happy about our own circumstances, very doubtful about the way our nations are going -- because I think we recognize what are the problems, what are the challenges -- and at the same time positive, or mostly positive, about our governments is a indication of maturity. Our people are seeing, or are reacting to their own reality in a very sane way.

Support for the market, as Andrew pointed out, is pretty widespread and it shows again, I believe it's after a process of some 20, 25 years, that people recognize there are no other -- there is no best way to produce and distribute wealth because the market does it better. And even in countries where you have populist regimes like Chavez and you have that pretty evident. Obviously you see also in those findings something that we know about, two types of Latin America here, and I think it's seen in the popularity of Lula and the unpopularity of Chavez.

What type of leadership is preferred in Latin America? The data is very clear on that. Lula is by far the most popular leader in Latin America, and I think it has to do with the respect for both the democratic values and to rational economics.

And then, too, the more problematic part to me is the perceptions of the United States. And here you have -- it's very interesting, because you have -- in five countries the United States is considered the greatest threat, is seen as the greatest threat to those countries. Actually, in Brazil and Mexico the United States is seen as the greatest -- the closest ally and the greatest threat. Actually, the more negative view is dominant. And the United States is seen also as the number one threat in Argentina, Bolivia, and Venezuela, and number two in Peru, after Chile.

And here I'll offer just briefly some guesses on why. It may differ; the answer, obviously, will differ from country to country. But in broader terms, I think that there is something -- obviously, the very unpopular, in America, invasion of Iraq is even more unpopular in our countries. And the idea of a possible attack in Iran obviously keeps everybody on edge.

And Latin America historically has a different and peculiar experience with that, because we have been the -- historically, you know, we know -- we know a lot about United States intervention -- unwelcome, armed interventions. So we take those things very seriously.

The other thing I think that informs this view of the United States as a threat, this comes probably from a mix of the general population and the better informed part of the public, the most informed part of the public, which is the loss of credibility of the United States. You know, by invading a country without U.N. authorization, the issues of Abu Ghraib, of Guantanamo, the issue of torture.

You know, the notion sometimes in the debate here, it looks like a natural thing. We are very familiar with this notion that in order to protect national security you can violate democratic principles, human rights, et cetera, et cetera. This has always happened in Latin America. During the Cold War, this is what happened. We had military dictators destroying democracy in order to save it, to protect nation security. And so all this, all those themes are very familiar.

Another thing, and this is valid for the most informed part of society, which is what -- I think this word exists in English, which is what we call in Spanish or Portuguese "obscurantismo," the obscurantist side of America, the anti-science America that comes -- you know the stem cell issue. And people look at the United States. They say, "But they have all those universities and they have all those Nobel Prizes," and it's kind of scary to see the United States, that has always been this beacon of progress, scientific progress, taken in policy terms that -- so I think that the notion of the threat comes from that also, for some part of the public.

And obviously, very important what happens to the U.S. economy. If whatever, financial crimes or because of the current real estate issues or a consequence of new wars, new attacks, what happens to oil, the United States has a recession or not, and also the rise of protectionism in the United States that is seen as a major threat, especially in countries like Brazil and Argentina.

And, you know, all these obviously contain messages to whoever comes next here about how to deal with Latin America, but Latin America's much more in a sense, much healthier place because of this experience with democracy. And I think that the statistics here, the information produced by those two studies show that very well.

Thank you.

SWEIG: Thank you, Paulo.

Steve, you're covering trade and global economic issues for the Times, and I've asked you to speak a bit about Asia, to take us over the --

STEVEN R. WEISMAN: Well, I'd like to say just two sets of things in response to Andy and Paulo's presentations, which were very interesting. First, about the phenomenon of this trade and globalization being a success story in the middle-income or, let's say, the top tier of the developing countries, and second, I'd like to talk about this issue in terms of U.S. politics.

First, I think Paulo's right; it's a fascinating display of rationality that always -- is maybe sometimes surprising when it shows up in polls. It doesn't always show up in American polls, the connection between economic growth and happiness, because anxiety about the future can co-exist with happiness.

But I want to connect it very briefly, and I'm a little humbled looking out here, because I know many of you know these issues well. So in the question period, you can challenge me if you think I'm getting this wrong.

But I think the really interesting thing that's happening now among these developing countries, these top-tier countries that have shown so much growth is that in the global trade talks right now they are the ones who are resisting making concessions in the next round -- in the Doha Round. The Doha round is now stalled, for a lot of reasons. If it were an Agatha Christie novel and it died, there would be a lot of suspects who -- (laughter) -- you know, of those who had plunged in the knife.

But one of the interesting things which is acknowledged even by neutral people involved in the global trade talks is that Brazil, India, Argentina, South Africa in the lead and then followed by many of the other countries in Asia, Indonesia, the Philippines, who are looking to them are very, very reluctant to go for another round of trade reductions -- of barrier reductions in manufacturing and in services, but particularly in manufacturing. Now, what's the factor here?

Well, we can discuss them. Many of these countries are very sensitive to their -- you know, they are lively democracies. India and Brazil, being in the lead on this, are two very lively democracies. Brazil now has a very strong popular government; India has a very weak, not-so-popular government. But even more important about India's government is that it's a left-of-center coalition, so that it has to be very concerned about the pieces of its coalition where they would -- they're afraid of losing jobs if they lower these barriers.

They want to hold onto what they've got, and a new division has emerged in the global trade dynamics between the top-tier, more successful developing countries and the ones at the bottom, in the second tier. There're more than two tiers, but just -- I'm oversimplifying it a little bit. And American strategy right now is to try and peel those apart and to, you know, form an alliance.

Granted, I'm sure many of you will point out that the U.S. has been very slow to make its own concessions in these areas to keep the talks going, but the U.S., I think, would be ready to make more concessions, but what they're trying to do is split the coalition of what used to be called third world countries and try and get the poorest of the poor countries in an alliance to beat up on the upper-income countries and say, "Hey, you're the ones who have benefited so much from trade," as Andy said. "You have to be brave enough to stand up to your constituents who are nervous about going for the next round."

Now, one of the more -- the most important dynamics of this, but nobody likes to say it, is China, because a lot of these countries are afraid that if they lower their barriers they will be flooded with Chinese-manufactured goods. They're not so much afraid of Western products as they are afraid of Chinese and products of the -- of China. So, you know, there's a lot of China-bashing in this country. It's not China-bashing in India and Brazil, but that's kind of the way it's seen among trade negotiators, and they're wrestling with that now.

So these polls are fascinating insights into the attitudes of these countries, but because these -- but trade, all of you know about trade or you wouldn't be here. We all know that trade is an issue of winners and losers, of people who gain, people who lose. And in any democracy, whether it's the United States or India or Brazil or Argentina, there's going to be a battle royal over that. And it's going to play itself out in polls, in elections, and in what shaky governments decide to do and what accommodations they make internally.

Let me just say something about the United States and the trade situation. When I first started covering trade more intensively a year and a half ago, I remember saying to someone that I've been covering the politics of trade in the United States since the 1860s. I actually wrote a book a few years ago that dealt a lot with the trade and tax and economic battles of the period from the 1860s to the 1920s and, of course, those were the years when the big free-trading party was the Democrats, and the Republicans were the protectionist party. The Republican Party wouldn't be where it is today if it weren't for protectionism, high tariffs, and economic nationalism. And they've only come around to free trade in the last few decades. They were protectionist all the way as we -- into the Depression, into the Great Depression.

So as a student of American politics -- and I've known Andy for a long time; it's a real honor to be up here on this panel with him, because there isn't anybody who understands the American electorate better than Andy -- I just find it fascinating why there's no constituency for trade anymore in this country.

And there are just -- I just throw out a lot of factors. It may be changing, but why would you be for free trade in this country? Well, some of the arguments that you could make for free trade just aren't being made because of either complacency or just disorganization. But you are beginning to see -- I noticed, watching television even over the weekend, these ads for Wal-Mart where they keep throwing at the television viewer the amount of money that they're saving by going to Wal-Mart. I think Americans are not hammered.

There's nobody reminding Americans of the low prices that they're paying for goods as a result of trade, to counter the argument of the loss of jobs. I mean, which is not a -- which is a real argument.

You know, I went in to interview Treasury Secretary Paulson recently, and he said, "We have done a poor job in this administration, all of us who are advocates for free trade, in making the case for free trade." And I said -- that was one thing where I could volunteer as a reporter that I agreed with him.

I mean, where is -- the Chamber of Commerce, all the people who are advocating for the supposed benefits of free trade, are just absent without leave in all of these arguments. They're nowhere. They are nowhere. You can't, I find as a reporter, even go to them and try and get them to tell me what the number of jobs are in the United States that are dependent on exports.

Right now, if you look at the American economy, what's the only sector of the American economy that's doing well? It's the export sector, I mean, partly because of the fall of the dollar, which many of you can talk more intelligently about than I can about why that's come about.

But, you know, if you go back to one of the founders of the modern Democratic Party, William Jennings Bryan, in the 1890s -- see, I told you I've been covering this for a long time -- he would go around the country, when he was campaigning for president, and hold up goods that you could buy and the prices you had to pay in stores in America and say, "These same goods you could buy cheaper in Canada and Mexico," sort of like the 1890s version of the drug debates today with prescription drugs.

I mean, this was a potent issue for Americans for much of our history. But you don't hear anybody saying it, and you don't hear Democrats and you don't hear Republicans saying it. They don't emphasize the number of jobs that are dependent on exports.

And another thing that's interesting to me about the Democrats -- I'll leave you with this thought, but, you know, the Democrats is a party of -- our left-of-center party. They care about poverty in the United States and around the world.

I once asked a senior member of this administration about the embarrassing level of foreign aid that the United States gives out compared to other countries. As a percentage of our GDP, we're at the bottom of all the rich countries of the world. And this person said, "Yeah, but our foreign aid is in the form of our trade policies."

In other words, the United States has pulled in so much of the goods that are produced in poor countries and has contributed so much to the alleviation of poverty around the world because of our trade policies, and you never hear anybody saying that. And you would think that somebody, especially among the Democrats, might make that point. I'm being ironic. I know that none of them would. But I'll leave you with that thought about the Democrats.

SWEIG: Well, thank you; very, very provocative comments, both of you. And I only am moderating today, which means that I'm going to open up to the floor immediately. We're going until 1:30. And I know that many of you have perspectives and comments and questions.

I would also really commend to you that you take a copy of this report that Andy and his team have brought over, only because it goes through a number of issues and correlations between attitudes on the environment and globalization and the relationship between perceptions of rights versus needs and democracy and prosperity, and all of these are of a piece. And so please don't neglect to take it with you.

On this last point, Democrats, free trade as boosting prosperity in the impoverished bottom tier of the Third World, does anybody want to respond to that or ask any other questions or comments?

Yes, okay, many people. That's fantastic. And if I don't know your name -- well, in any case, please stand up and identify yourself when you go.

Yes, sir, right here in the front. And please be very brief, because I'd like to try to get as much of you in as possible.

QUESTIONER: Thank you. Jose Raul Perales from the Wilson Center.

There is a body of literature -- actually, an article that came about in World Politics a while ago that tried to explain why Latino barometrical data about Latin America always showed that the populist actually supported free trade, as opposed -- which is different from supporting free trade agreements, which is another story reflected on the Pew study.

And one of the things that has been discussed in that regard is that we've always been focusing on factor endowments and looking at the employability of factor endowments, as opposed to looking at consumption, and that one of the reasons why Latin American countries, especially the poorer countries, end up supporting free trade is because people regard themselves as consumers first, and that because of the changes in consumption, they actually support free trade because it's more visible for them, rather than in the case of a single industry being affected by open trade. I mean, it's only those people involved in that industry, as opposed to the larger populace.

Now, what I wanted the panelists to think about whether this -- what would this theory say about attitudes in advanced countries in terms of their rejection or the seeming less support of free trade, or certainly free trade agreements?

SWEIG: Who wants a shot at that?

KOHUT: (Inaudible.)

SWEIG: Please.

KOHUT: Thinking about the United States in particular, I think what Steve said earlier is true, that people do see some virtue to -- great value in imported products. But at this point -- and that's what kept the numbers high through the '90s -- but at this point there's such a populist wave that has a lot of components to it, concern about wage stagnation, lack of real wage growth for years and years, and a great sense of income inequality.

Back in the 1980s, we asked a question here that said something like, "Do you think of the United States as a have or have-not country?" Only 25 percent said that was applicable to the United States. Now that percentage is up to 49 percent. Nearly half the country says this is a have/have-not country. And a third of the people these days say we're part of the have-not sector.

So there is a whole bunch of populist themes on immigration, even basic isolationism, that relates to the concerns of many middle-class and lower middle-class people who no longer say getting lower-priced goods is good enough, because they're concerned. When we ask people an open-ended question, "What's the biggest problem with your job?" -- "I'm not going anywhere."

SWEIG: Camille and then Sarah, but also please stand up and introduce yourself.

QUESTIONER: Camille Caesar from Commerce.

I wanted to first address your point about why lower prices from imports don't necessarily lead to higher levels of satisfaction in the United States and feeling that trade is good. I think it's because consumption has run its course since the early 1990s. I think there have been lower prices, but looser credit standards made it easy for lots of people to get most things that they want, so that other concerns probably rise to the fore. That would be my guess.

Plus there's the fact that a lot of, you know, being happy, according to one friend of mine who used to drink a lot in college and is now a hedge-fund manager -- (laughter) -- a lot of it is what is going on between your ears. And I think that's why you see that people in North America are generally happy. People in Eastern Europe are generally not happy. There's a huge cultural component to happiness that transcends wealth increases.

What I think is happening is that people look -- whether they know that they're doing this or not, they look at people of their same social class in other countries, what they think they're doing or how they think they are doing, and they compare themselves that way. And I think if you're in the top 1 to 5 percent of income levels in the United States, you probably think you're doing pretty well compared to people in other countries, and that seems to -- (inaudible).

But I think that if you're further down -- if you're, let's say, working class -- you might look at others and see, "Well, they've got trade unions. They have protections. They have benefits that I don't really have." And you think, "Well, maybe I had a better income in the past, maybe I have a brick house and a Chevy Tahoe, but I could lose my job. I don't have a lot of security." I think that's a lot of the anxiety that is translating into this opposition to trade -- it's that people look to their own social class more than they do to the society as a whole.

SWEIG: Is there a question that you want to ask too, or do you want them to react to that? Okay, great.

WEISMAN: I don't -- I thought that was an interesting comment. I mean, I don't have much to offer in response. I don't disagree with you. We don't know for sure what makes people -- maybe Andy, who has done this for a while, could say, when you ask people whether they're happy, all the factors that go into it.

KOHUT: I think that anxiety is an issue. I don't think the anxiety is the relative standing how people see themselves relative to people like themselves in other parts of the world, because, quite frankly, Americans don't think about people in other parts of the world.

WEISMAN: I think you're right about that.

KOHUT: But in terms of a generation ago or feeling the worries about paying for health insurance or any one of a number of things, I think you're right. But I don't think it's relative to other parts -- people in other parts of the world.

SWEIG: Sarah and then -- we'll take Sarah and then Jim and then Francisco.

QUESTIONER: Hi. I'm Sarah Anderson with the Institute for Policy Studies.

And I guess I just want to question how meaningful it is to take such a complex issue and turn it into such a simple question like "Are you for or against international trade?" In Costa Rica, the opposition campaign to CAFTA almost won a referendum recently, and a big issue there was the privatization of telecommunications. It wasn't about goods crossing borders. And similarly with the Free Trade Area of the Americas, I mean, that was held up over issues like subsidies, investor protections, intellectual property rights, all of these other things.

And the disconnect between the leaders and the people -- well, even Hugo Chavez doesn't say he's against trade. He's offered alternative proposals. Evo Morales doesn't say he's against international trade. He's submitted alternative guidelines to the U.S. for a different kind of trade agreement.

So do you worry at all that you're kind of oversimplifying the issue?

KOHUT: Well, obviously if you can do a survey of trade, if you can do a survey of anything, you don't ask one question. And certainly when we do surveys in the United States in-depth on an issue -- and we did a survey -- in fact, if you look on our website for December of last year, we have a long survey about how Americans feel about free trade.

But in this connection, what we have tried to do is to set up a series of indicators that we could come back to over time to give us some sense of which way the wind is blowing on any number of things, whether it's the image of the United States or free trade.

And if you look at the trends that are associated -- trends and other questions about opinions about multinational corporations and all sorts of things, what you get from a survey like this is a sense of which way the wind is blowing, but certainly not a complex refined view of the way people feel about trade or any other issue in such a survey. The only issues which we've covered in that kind of depth within the Global Attitudes Project, which we didn't want to get into here, are attitudes toward the United States.

SOTERO: Julia, can I say something briefly --

SWEIG: Of course.

SOTERO: -- on Chavez on trade? I received what President Lula has said more than once is that, you know, he's the only guy who has already an FTA with the United States. It's one product, major export, freely exported here to the United States; causes a lot of pollution, global warming, et cetera. Americans are happy getting that gas. He is very happy selling it to you and financing his Bolivarian thing.

So, you know, it's very different to talk trade with Venezuela and Brazil. Brazil is a country that has an industrial park that trades in many different areas. Venezuela trades one or two things.

Second, there is -- I'd like to comment on something that Steven said on the Doha Round and attitudes on trade, et cetera. You know, Brazil has developed this talent of being very good in things that are very protected around the world. And right now we are having a discussion -- we have had a discussion, sometimes pretty nasty, internally about the direction of trade policy in Brazil.

The business community in Brazil, the more internationally integrated business community in Brazil, is pretty mad at what happened in trade policy in Brazil. There is a sense that we missed the boat and that this whole opening up trade thing is gone; the train has already passed and we didn't jump in. So it was very difficult.

I don't know if a different set of leaders would have led us to the different outcome, because the issue for Brazil -- and this is unfortunate -- but the issue for Brazil and for Argentina, as you know, is agriculture. And in agriculture, the United States has turned to sort of a socialist nation. You know, you have socialized agriculture here. You have agriculture, people now praying for bad weather and low prices, because daddy government will support you. And it's very difficult to trade with the United States and reach an agreement when you have that situation.

When prices of commodities are this high, the United States cannot make a better offer when it's spending only $9 billion in subsidies per year. Please. You know, so there is this -- but now you are absolutely right. For instance, we know in Brazil that our interests and those of India are absolutely contradictory. The debate in Brazil is about should have we gone back far into this alliance with India, because now we are caught.


QUESTIONER: Jim Kolbe with the German Marshall Fund and with Kissinger McLarty.

So the richer countries are the ones where there is -- richer developed countries are the ones where there's less support for trade. And in the Doha Round, they're being asked to make the larger concessions. The poorer countries, there's greater support for trade, and they're the ones demanding the greater concessions or expecting the greater concessions. Hence the Doha Round is in trouble. Is that a gross oversimplification, or is there some correlation between them?

WEISMAN: Well, the earlier question about whether there's a danger of oversimplification -- I mean, you're asking a journalist, right? (Laughter.) So there's always that danger.

Coming off your question and Paulo's comment about our socialist agriculture sector, I mean, it is a pretty fascinating political phenomenon that farmers in both Europe and the United States have virtually a veto over trade policy. They, in both Europe and the United States, constitute, what, 2, 3, 4 percent of the workforce and of the economy. And yet the American insistence on continuing agricultural subsidies, and in the case of the Europeans, tariffs -- that's the way they do their protection -- is a major factor in the impasse right now in the Doha Round.

And as I understand U.S. trade policy, the criticism -- the intelligent criticism from a free trade standpoint is that although the United States has actually come quite far in the last year or so, it's not gone far enough and its concessions have been very grudging and slow.

And there are some people even close to this administration who think that if Sue Schwab had been -- she's the American trade envoy, as I'm sure you all know -- had more political clout and support in Congress, that she might have been able to persuade this administration to make bigger concessions earlier, if only to call the bluff of the Brazils and the other countries that are also now very self-righteously accusing the U.S. of holding up the trade talks without making their own concessions.

So I think that's the way I would describe the current impasse, that the United States has come down quite a bit. It's hinted that it would be willing to go further, is waiting for some room politically to be able to do so by getting a signal that if they did, there would be greater access in the developing world to American services -- mostly services and some industrial and foreign products.

But it's -- you know, we're at a very interesting point right now. I was told the other day that, you know, Bush is on the phone almost every week or two now with Lula to try and get this thing going, and it really has come down to sort of the U.S. here and Prime Minister Singh, President Lula and Mr. Mbeki of South Africa. Those three guys are the ones who hold the key. There's going to be a meeting in another week or two in Cape Town with those three where everybody from the U.S. -- Paulson and Schwab are going to go over and make one more try.

SOTERO: Can I --

KOHUT: I -- I'm sorry; go ahead.

SWEIG: But you can't, because Andy will go and then we're going to get some more comments from the audience.

KOHUT: You can get in on the next one.

I do polling. I don't do trade policy. But Hillary Clinton said a couple of weeks ago that she no longer thought that NAFTA was a good idea.

SWEIG: Yes, sir.

QUESTIONER: Gary Horlick, Wilmer Hale.

This has been a great panel. The one conclusion I draw fairly clearly is we're not talking about economics. We're talking about possibly sociology, probably anthropology. But I won't take up all your time with that.

Steve Weisman turned it to the political side really nicely. So here you have most Republican candidates, certainly the leading ones, very clearly advocating free trade, and most of the Democrats -- you mentioned one -- really backing off of it, to the point of maybe not even supporting it. All of them are vying for the same prize.

So who's right of the politicians? They're both making political -- the Republicans are thinking, "This is going to win politically." The Democrats are saying a completely different message is going to win politically. Their comments are not limited to the primaries. Journalists will remind them of them in the general election. So who do you think is going to win on that issue?

WEISMAN: Well, let me just offer a comment. I'm, of course, constrained from saying who's right. But what I will say is that I think both sides are to blame for the collapse of the pro-free trade consensus that existed through the '90s, as Andy pointed out.

And I frankly would assign a fair amount of blame to the Bush administration, because the Democrats -- you know, President Clinton led the Democrats through a period, as we all know, of going along with free trade agreements and the WTO. And the Bush administration, in its first five or six years, really made no attempt to continue a bipartisan alliance in favor of the additional free trade agreements that it advocated.

Some of you are nodding your heads. Some of you might disagree. I'd be curious to know. But I think that the administration took a very narrow, partisan view on the trade issue, and partly because that was what the House wanted. They actually saw trade as an opportunity to divide the parties and raise funds from the businesses that benefit from trade and craft trade agreements that it was impossible for Democrats to support. And they thought that was a good political formula, and it was for a while.

SWEIG: I'm going to just take 30 seconds on just this point. I said I wouldn't insert myself, but here I am going to do it.

We have, in Latin America, Colombia, Peru, Panama coming forward. And just exactly to Steve's point with respect to Colombia, there was not a lot of effort made to make it possible for the Democrats now in the majority to get behind that particular FTA. The other two might go through because of just basic failures to tend to political constituencies here that care a great deal about their comrades, their peers in Colombia. It's a very special case.

But when you've got trade unionists being assassinated in a country with the largest foreign aid program that we do have in Latin America, that does go to Colombia, and that issue had been sort of left to fester for this long, once the majority switched to the Democrats, it really became very tough to make the case on that front.

I need to move to this side of the room and Francisco. Please stand up and introduce yourself.

QUESTIONER: Thank you. Francisco Gonzalez, assistant professor at Johns Hopkins.

I found the results pretty counterinteruitive, because, on the one hand, what comes across is an image of Latin America as a region where people are becoming happier than they used to be. I just turned around to last year and I see in all the presidential elections mostly very tough battles, most of them being won by people who want to change the status quo. In those where the status quo -- "Let's keep embracing globalization" -- wins, it wins by point-something percent of the vote; Peru, Mexico. In countries, on the other hand, where the status quo is against globalization -- today Venezuela, Argentina -- you get the re-election of these people.

So I'm trying to think about the difference between what we see in this survey and what's happening on the ground, where, by and large, the left in Latin America -- a left which is very suspicious about globalization -- has taken a lead in a series of countries.

And there I can only think about two options why this difference might be the case. I'm happy to ask Andrew what he thinks. One is the point of time at which you did the survey; '02 is the last year of half lost decade of socioeconomic development in Latin America; '97 to 2002 were very, very bad years macro- and microeconomically speaking; unsurprising that people would have felt really hopeless, angry, frustrated back then. '07, on the other hand, you know, we're riding the crest of the wave of the largest sustained economic expansion in Latin America since the pre-1973, since the oil shocks (ph). People feel a bit happier. That's one.

But the other one, which I think is -- the other explanation, which I think, at least to me, makes more sense is -- led to what Liz Anderson was saying. The averages give us some information, but not really all the information.

My sense is that the level of inequality in Latin America, particularly the visible inequality, has grown to such an extent that, given that now we've got democratic elections uninterruptedly without the threat of military coming tomorrow, as used to be the case beforehand, people have got organized, and the constituencies really are betting ?) much more on the side of globalization. It makes all these gains for these very few people and leaves us without much.

In that sense, I think Latin America today looks a bit more like the U.S. than 15, 20 years ago.

KOHUT: You know, your question about two points in time are true. We have two points in time. So stay tuned for 2012. But also, what the survey shows is, along with increased support for free markets, there is really very, very strong, equally strong support for social safety net. That hasn't disappeared.

So you have, as in the United States, a really complex set of attitudes. Yes, the government should take care of people who can't take care of themselves. And, yes, we favor free-market capitalism, even though some people are rich and some people are poor; perhaps draw from that and let the government take care of those poor people.

SWEIG: I have 1:30, but I'm going to just -- but I'm looking at Andy's watch and it says 1:25. So I will just ask our other two panelists if you have any concluding remarks, and then I'll wrap this up and we can move on. But Steve, Paulo?

SOTERO: I just wanted to say again, going back to this trade issue, there is in Brazil, if Brazil would make all the concessions under consideration, that we are going to -- we would reduce our industrial barriers, tariff barriers, to a point that is higher than the applied tariff right now. So it would not make much of a difference, really. We are afraid of China. It's not the United States. We are very afraid of China.

And the interesting thing is that, on the other side, it would be exactly the same. It is the fact that the United States could really make a very attractive offer on agricultural subsidy because it's spending less and less because of high commodity prices right now. But it doesn't do it. It does it very tentatively.

I think that the issue that is driving this here is something that -- well, the United States has a very unpopular government right now, an unpopular president who is probably not going to be in a position to take this risk in the last year of his administration without a fast track. Why countries should get an agreement with the United States right now? It's unfortunate they didn't do it in June.

As I told you, there are lots of discussions in Brazil if we used the right tactics, if we didn't paint ourselves into a corner, because in Brazil, as you know, the people who do trade policy and the people who do foreign policy are the same people, and maybe we should have two sets of people doing those things.

But that's the reality, although as long as the economy is growing, as long as there is this notion of prosperity, you know, I think that President Lula will stay on the phone with President Bush and the other presidents, because also, one important thing, a Doha deal would mean a very important victory for Brazilian diplomacy, which has not had many of those recently.

SWEIG: Well, the reason we wanted to put together a series on globalization and democracy is because domestic politics around the globe are obviously such an incredibly huge factor now in issues of whether Doha will get jump-started again, globalization, trade, prosperity is now all about domestic politics in a more democratic world.

So I want to thank Andrew so much for giving us all of this great information and hard work and survey data to respond to. And thank Steve and Paulo for coming and all of you for our participation. And please come back again. And thank you very much. (Applause.)








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