The moves to cut trade tariffs from the late 1940s ushered in decades of prosperity in the developed world while enabling countries as diverse as Ireland and China to use globalisation characterised by trade and foreign investment, to rise from poverty. Now with growing income inequality and job insecurity, people in advanced economies are increasingly not convinced about the benefits while in Germany, one of the big beneficiaries of trade, people don't like the idea of foreigners buying their companies.
Trade and foreign investment engender both faith and skepticism around the world, according to a new Pew Research Center survey of 44 nations, published Tuesday in Washington DC.
Global publics generally agree that international commercial activity is a good thing, particularly people in developing and emerging economies.
But not everyone is convinced, especially in advanced economies. Such skepticism is particularly strong in France, Italy, Japan and the United States. Pew says each of these nations is involved in negotiating major regional trade agreements. That undercurrent of skepticism could complicate current government efforts to further deepen and broaden global markets.
While 84% in advanced economies say trade is good for their country, there is less enthusiasm. Only 44% voice the view that trade boosts employment and just 25% say it leads to higher wages. Such opinions are likely the casualty of the convergence of globalisation with slow economic growth, high unemployment and stagnating incomes in these nations.
Half of all American respondents said trade destroyed jobs at home, with only one in five saying it created jobs. In Germany, almost 90% said the acquisition of domestic businesses by foreign companies had a “bad” impact on the economy, while 75% of Japanese agreed; two-thirds in the US and 53% in the UK.
A median of 78% in emerging markets see trade as beneficial, including 25% who say it is very good. And 52% say trade creates jobs, while a plurality believes it leads to higher wages (45%). Pew says such emerging market sentiment may reflect the experience in China and elsewhere, where growing international business ties have been associated with more employment opportunities and higher incomes.
Pew says views of the impact of trade on prices are among the most striking findings from this new survey. Most economists contend that trade lowers prices for consumers. But half of those in developing countries (a median of 50%) and a plurality (42%) in emerging markets say trade actually increases the prices of products sold. Publics in advanced economies are divided on the topic.
These are the results of a Pew Research Center survey conducted among 48,643 respondents from March 17 to June 5, 2014.