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Perspectives on Trade and Poverty Reduction

Date
Time (GMT +00) 13:00 14:15

Speaker:

Jonathan White - Program Officer, The German Marshall Fund of the United States

Discussant:

Chris Stevens - Research Fellow and Director of Programmes, International Economic Development Group, ODI

Chair:

Simon Burall - Research Fellow, Centre for Aid and Public Expenditure, ODI

The Annual Perspectives on Trade and Poverty Reduction survey carried out by the German Marshall Fund of the United States polls Americans and Europeans on what they think about aid, trade and globalisation, the global challenge of jobs and growth, and poverty and democracy as policy goals. The survey was carried out in France, Germany, Italy, Poland, Slovakia, the United Kingdom and the United States, in September 2007. One thousand individuals were surveyed in each country according to their age, gender and whether they live in rural or urban areas. The questions posed by the survey are deliberately general, do not assume a high level of technical knowledge and cover: trade, the managing globalisation and development.

The survey results include analysis of changes in public opinion over time (comparing responses from 2005, 2006 and 2007 surveys), and comparison of responses within European countries, and between the US and Europe.

The key findings of the 2007 annual survey are:

  • Trade: despite anxieties over Chinese economic power support for freer trade remains high in the US and Europe.
  • Managing Globalisation: while most support investing in people and technology some favour restrictive policies to help displaced workers.
  • Development: most believe that aid and trade helps to stabilise and democratise developing nations, but support softens in the US.


1. Trade


On trade, the results of the survey show support for international trade in Europe remains stable with 75% in favour, the same result as in 2006. In the US however, the % of respondents supporting international trade in 2007 is lower than results for 2006, 64% compared to 71%. Even with a 3% margin of error, there is less support overall for international trade for US respondents.

Disaggregated results were presented for the US and Europe. Overall, Slovakian respondents are least supportive of international trade (61%) followed by the US (64%) and France (65%). Italian respondents are most supportive of international trade (87%), followed by Germany (79%) and the UK (75%). French respondents are the most unsupportive of freer trade, with only 37% favouring, compared to the European average of 69%. In the US 60% of respondents are supportive of freer trade. In Europe, UK respondents are the most supportive of freer, at 84%. Respondents in countries such as France and Poland are more supportive of increased regional trade within the EU as opposed to increased international trade and freer trade.

Europeans are overall more supportive of transatlantic integration compared to Americans. 80% of Europeans favour greater regulatory support and cooperation between the US and EU, compared to 76% of Americans. 81% of Europeans favour making it easier for people to move across the Atlantic to work, as opposed to 58% of Americans. Although generally speaking support for regional integration was highest amongst Europeans, there were differences amongst countries as to the type of integration: whether trade or investment liberalisation. Support for transatlantic investment and trade liberalisation is higher in Poland, Italy, Slovakia and the UK, compared to France, and Germany. In the US 46% of respondents want transatlantic investment liberalisation compared to 58% of Europeans. 48% of Americans want transatlantic trade liberalisation compared with 61% of Europeans.

Of those respondents who support transatlantic initiatives, most see this as a means through which to global standards and achieve productivity gains. 36% of Europeans and 32% of Americans believe that transatlantic initiatives help the EU and US to set global standards for the world economy. 25% of Europeans and 28% of American believe transatlantic initiatives will make the EU and US more productive. Europeans seemed to be more concerned about competition from China, with 22% of Europeans believing that transatlantic initiatives will protect the EU and US against competition from China, compared to 13% of Americans. 24% of Americans believe instead that better transatlantic relations help build stronger diplomatic ties between the US and EU, compared to15% of Europeans.        

Overall both Europeans and Americans view India as more of an opportunity than a threat, than China. The US, UK, Italian, German, French, and Slovakian respondents view India as an opportunity, only Polish respondents view India more as a threat than opportunity. China is more of a threat than an opportunity by Polish, Slovakian, Italian, French, German and US respondents. Only UK respondents view China more as an opportunity than a threat.  


2. Managing Globalisation

The first question presented by Jonathon White was ‘does freer trade cost more jobs than it creates’? Results were presented for all countries and over time, comparing 2005, 2006 and 2007 results. A shift in US opinion is identifiable from results. Over half of all US respondents feel that freer trade costs more jobs than it creates. The US is now at almost the same level of France. The majority of French respondents feel that freer trade costs more jobs than it creates. In Slovakia a little over 50% of respondents agree with the French. However, European responses are in general more positive than American, with the majority of European respondents (from Poland, Germany, UK and Italy) believing that freer trade does not cost more jobs than it creates.

Both US (61%) and European (59%) respondents identified ‘outsourcing’ as most responsible for job losses. Corporate restructuring was the second most identified cause of job losses by both US and European respondents, (35% EU and 29% US). Results were also presented for UK respondents. After outsourcing, most UK respondents identified immigration as the factor most responsible for job losses (36% compared to the European average of 25% and US average of 26%). Foreign currency manipulation was the next most identified cause of job losses by both Americans (26%) and Europeans (25%).

The policy options identified as most helpful to trade displaced workers were mostly competitive as opposed to protectionist strategies by both Americans and Europeans. Most US and EU respondents preferred ‘investing in new technologies to create more jobs’ and ‘providing education and job training’ as opposed to ‘raising barriers to international trade’ and ‘limiting immigration’. However, 73% of US respondents think that outsourcing should be limited.    
       
3. Development

As to the reasons for giving aid, Jonathon White presented moral concerns and hope for growth as driving aid support. Most European and American respondents gave ‘alleviating poverty’ and ‘fighting health problems like Aids’ as their main reasons for giving aid. Supporting economic growth was the next most identified reason for both European and Americans, followed by ‘contributing to global stability’ for Americans (35%) and ‘encouraging democracy’ for Europeans (31%), which was also on a par with ‘helping poor countries trade’ (31%).   

Broad support exists amongst Europeans and American for both aid and trade as development tools. Overall aid was identified as strengthening democracy in developing countries more so than freer trade, across all respondents from all countries. Freer trade was generally identified as contributing more to global stability than global prosperity by respondents across all countries, with the exception of UK respondents who felt that freer trade leads to increased prosperity (77%) more so than global stability (75%).  

UK and French respondents view more trade with Africa, lower trade barriers, as addressing modern threats like unstable states and poverty more so than resulting in job losses at home, 78% of UK and French respondents compared to 67% of all Europeans and 62% of Americans.

Overall Europeans are more in favour of conditionality and accountability of aid compared to Americans across all of the following points: fight poverty; fight corruption; promote democratic government; fight terrorism; open markets to international trade; poor countries setting priorities for aid. Europeans are also more in favour of linking aid to good governance such as: fighting corruption; promoting democracy; strengthening democracy. Americans are least in favour of linking aid to the promotion of democracy (61%), Americans and Slovakians are least in favour of aid being used to fight corruption (80% and 75% respectively), similarly aid being used to strengthen democracy (64% and 65% respectively).

Both Europeans and Americans think that International organisations such as the World Bank and the US should have primary responsibility for delivering aid.However,Europeans are more supportive of public institutions delivering aid than Americans. Americans are less supportive of public institutions overall as deliverers of aid but more supportive of charities, foundations and NGO’s (18%), private companies (8%) and religious organisations (6%).

The largest donors want more effective aid. The majority of respondents from Germany and France, and the US think that aid should not be increased but instead should be made more effective. However, respondents in countries such as Slovakia and Poland and Italy think that the EU and US should increase aid. 8% of respondents from the UK and US do not support development assistance. Overall 2007 results for US respondents when compared to 2006 and 2005 surveys show American support for US global engagement declining.


Discussion


Points raised during the discussion included:

  • What is the connection between the survey results and US/EU policy makers? Jonathan White replied that the German Marshall fund presents results to the development community in Europe and the US, which typically includes representatives from the donor community.
  • Chris Stevens noted that the survey results present interesting cross-country findings with differences between the US and EU and within the EU perhaps indicating the role of the media and media driven discourse. Jonathan White replied that the media is clearly playing a role in shaping perceptions, particularly in the US where it is election year.
  • Some tensions or contradictory findings were noted by Simon Burrall, such as European views on aid for democracy, with most Europeans feeling stronger about this than US citizens.  
  • Chris Stevens remarked that the findings show how the EU27 is not as in favour as the EU15 for trade in Africa, for example. It is therefore question of how do we bring trade and development into better perspective to the citizens and governments of the EU.   

Please see The German Marshall Fund website for more information on the survey, methodology and results. Country-specific data sets are provided in Excel format, including, for example, socio-economic groupings and the political views of respondents.

Description

The United States and Europe account for significant shares of global trade and foreign aid activities with developing countries, and can heavily influence economic opportunities for the world’s poorest. At the same time, their level of global economic engagement can be shaped by public perceptions of trade, jobs, foreign assistance, and security at home.

The annual Perspectives on Trade and Poverty Reduction survey, carried out by the German Marshall Fund of the United States, polls Americans and Europeans on these critical issues to gain a better understanding of the public perceptions influencing policy climates in the United States and Europe. It explores views on trade and aid, and their ability to provide shared prosperity, global stability, and democracy in developing countries. Do Americans and Europeans believe that lowering trade barriers with Africa could help with addressing modern threats like unstable states? How do they view the impact of trade on jobs at home and what can we do to help workers who may lose their job due to trade? Can a transatlantic marketplace with deeper trade and investment ties help our own economies?

The 2007 survey was carried out in France, Germany, Italy, Poland, Slovakia, the United Kingdom and the United States. At this ODI event, Jonathan White will present the main findings.