BALANCE OF PAYMENTS

What A Bash

Fri. May 2, 2008


Japan-bashing was a major theme of the 1988 presidential primaries and an important subtext of the 1992 presidential contest, with its backdrop of tough economic times. Yet China-bashing has not emerged as a dominant issue in the 2008 campaign, even as the economy has slowed amid the perception that jobs are heading overseas.

Despite this week's announcements by Democratic presidential contenders Sen. Hillary Rodham Clinton of New York and Sen. Barack Obama of Illinois that they would co-sponsor legislation to allow companies affected by Chinese currency manipulation to seek remedies, the candidates have largely left China alone.

This is all the more curious given the harsh criticism of the North American Free Trade Agreement by Clinton and Obama. Moreover, new public opinion data released today show a dramatic increase in voter concern about trade and its adverse impact on people's lives. And pollsters say the public blames China.

In the 1988 presidential primaries, Rep. Richard Gephardt, D-Mo., threatened tough measures to shrink what was then a record $56 billion trade deficit with Japan.

To be sure, Gephardt lost. But there is no evidence he failed because of his trade critique, which was well received. And today the public would appear to be at least as receptive to trade criticism as it was back then.

A Pew Research Center survey finds that public support for trade agreements has fallen 14 points since 2001. Nearly half of those surveyed, 48 percent, say free-trade agreements like NAFTA and the policies of the World Trade Organization are a bad thing for the United States. The poll was conducted April 23-27 among 1,502 adults.

Voters blame trade for their personal economic woes. Nearly half of those questioned say free-trade agreements have hurt their financial situation and that of their families. That sentiment is 12 points worse than in December 2006.

Three-in-five Americans now think free-trade agreements lead to job losses. Not quite half thought that in 2006. And over half the public -- 56 percent -- think such deals lead to lower wages for Americans, a significant jump in such sentiment in the last year.

Much of this increase in anti-trade sentiment can be attributed to deep public pessimism about the economy. Only 11 percent of those questioned rate the nation's current economic conditions as good or excellent.

This profound negativity might explain why voters even blame trade for problems globalization arguably helps solve rather than create.

Economists credit imports with holding down prices by providing consumers with lower-cost foreign-made goods. But faced with rising prices for imported commodities, such as oil, a plurality of Americans -- 39 percent -- now blame free-trade agreements for higher prices in the United States.

In addition, half of those surveyed think free-trade agreements slow down the U.S. economy, despite the fact that exports are one of the few sources of U.S. economic growth.

More important, from the perspective of Democratic presidential candidates, registered Democrats and independents are more likely than GOP voters to say free-trade agreements are a bad thing and that they lead to job losses, lower wages and slower economic growth.

Why this antipathy for trade and its appeal among Democrats and independents has not morphed into more China-bashing is a mystery.

In 2007, the U.S. trade deficit with China was three times the deficit with Japan. There is widespread concern about the safety of products imported from China.

Moreover, in 2006, a majority of Americans had a favorable opinion of China. Now only two-in-five look favorably on Beijing. And a growing percentage think China's economy is having a bad influence on the United States.

"Every time we test, China is at the top of voter concern, especially among independents," said Celinda Lake, president of Lake Research Partners, a Democratic polling firm. "In a campaign, you need an enemy on the economic side. And, right now, China makes a pretty good enemy."

China has certainly not escaped criticism on the campaign trail. Clinton and Obama have called for tougher enforcement of U.S. trade laws in relations with China and have vowed to counter Beijing's manipulation of the Chinese currency.

In the current Indiana primary campaign, the Alliance for American Manufacturing, funded by the United Steelworkers, U.S. Steel and Allegheny Technologies, is running a "China Cheats" ad campaign in newspapers in seven Hoosier media markets.

China has yet to become the boogeyman of this election. Why? One answer might be that Japan-bashing didn't work in the past. But then why NAFTA-bash in Ohio? China also holds a great deal of U.S. debt. But that is a Wall Street concern, not a Main Street problem. And who ever liked a creditor anyway?

Lake thinks candidates' failure to go after China might reflect the cosmopolitan nature of those who run campaigns. "This is the elites being held back because of their own instincts," she said. "And maybe because they see it as more racist than nationalistic."

And it could be that China-bashing is yet to come. China's crackdown on Tibet and the upcoming Olympics offer candidates opportunities to criticize Beijing. Once Americans face the contradiction between the wealth of China that will be on exhibit in August and mounting evidence of Beijing's human rights abuses, both Democrats and Republicans might see more political advantage in China bashing in the fall campaign.

by Bruce Stokes

Fri. May 2, 2008

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