STEVE INSKEEP, host:
It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.
DEBORAH AMOS, host:
And I'm Deborah Amos, in for Renee Montagne.
Here's an issue that may well confront some presidential candidates today, and that issue is free trade. And it's emerging just as Republicans prepare to debate in Michigan. They're meeting in an industrial state that's been hurt by overseas competition. And we'll have more on that debate in a moment.
INSKEEP: We begin with a survey that shows Americans losing faith in free trade. The poll comes from The Wall Street Journal and NBC. It finds that even among Republicans, nearly six in ten voters think free trade has been bad for the U.S. economy.
NPR's Scott Horsley reports.
SCOTT HORSLEY: More and more Americans are coming to see free trade the way the first President Bush saw broccoli. No matter how good for them it's supposed to be, they don't like the taste. Dartmouth economist Matt Slaughter says there's a simple reason for that, and it's not that people don't understand the benefits. Slaughter, who recently left a job as economic advisor to the current President Bush, says a growing number of Americans are convinced free trade isn't working for them.
Dr. MATTHEW SLAUGHTER (Dartmouth College): People look at how their pocketbooks are doing, and the reality is the majority of Americans haven't had strong sustained real income growth in recent years. And that makes them much less supportive of freer trade and investment.
HORSLEY: Writing in Foreign Affairs this summer, Slaughter warned that a growing protectionist backlash in America has already cost the president fast track authority to negotiate new trade deals.
His co-author, Kenneth Scheve, adds the genuine gains of free trade could be in jeopardy unless protectionist attitudes are reversed.
Dr. KENNETH SCHEVE (Yale University): Policymakers need to think of ways in which these gains can be distributed more widely.
HORSLEY: Scheve, who is a political scientist at Yale, says one way to do that might be with higher payroll taxes for the wealthy and lower taxes for the less well off. Unlike income taxes, the payroll or FICA tax rate is currently flat.
So far, you're not hearing Republican presidential candidates talk about redistributing trade gains. Former New York Mayor Rudy Giuliani says Americans should be happy to be competing in a global economy.
Mr. RUDY GIULIANI (Republican Presidential Candidate): Here is the way America under a Giuliani administration would deal with global competition: We're not going to buy less from India and China. If it's good for us to buy more because our consumers save money, we're going to do that. You know what we're going to do? We're going to sell them more. America is going to be a country that sells more things to China.
(Soundbite of applause)
HORSLEY: Former Massachusetts Governor Mitt Romney is similarly upbeat, so long as trade deals are fair.
Mr. MITT ROMNEY (Former Republican Governor, Massachusetts; Presidential Candidate): I certainly recognize that the world is enhanced by trading with other nations. That's a good thing for America.
HORSLEY: But Jason Furman says it will take more than cheerleading to convince increasingly skeptical voters. Furman is a former economic advisor to President Clinton, who now heads the Hamilton Project, a group of centrist Democrats who support free markets and trade.
Dr. JASON FURMAN (Director, Hamilton Project): When somebody says trade is bad for the economy, I don't think the right answer to them is trade is good for everyone everywhere all the time. They will not believe that answer. Instead what you need to say is you're right, trade does present a challenge, and here's the solution.
HORSLEY: Furman's proposed solutions are similar to those offered by Slaughter and Scheve: more progressive taxes, education, and perhaps health care reform, all tied to further trade liberalization.
Mr. FURMAN: I hope the lesson that Democratic candidates take from this is not to bash trade and call for protectionism, but instead to call for a robust safety net. Those are all the best answers.
HORSLEY: A separate survey released last week by the Pew Center for the people in the press found stronger support for trade in the U.S. than The Wall Street Journal-NBC poll. But even that survey showed support has waned in recent years, and Americans are now far less enthusiastic about trade than people in India or China.
Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.
