April 1, 2013

Americans’ Support for TPP Remains Untested

By Bruce Stokes, Director of Global Economic Attitudes, Pew Research Center

Special to Nikkei Weekly

Prime Minister Shinzo Abe’s announcement March 15 that Japan will join negotiations to create a Trans-Pacific Partnership with the U.S. and other Pacific Basin nations won early support from the Japanese people, according to snap surveys following his statement. The decision was also welcomed in official circles in Washington, D.C., where the Obama administration has long supported Japan becoming party to the talks.

But the attitude of the American public toward what is, essentially, a free trade agreement between Japan and the U.S. remains unclear. Unlike in Japan, the TPP has received relatively little news coverage in the U.S. It is not a topic of broad public debate. And there have been no major public opinion polls that have asked Americans specifically about the negotiations since Abe’s announcement.

The American political environment surrounding the talks can only be deduced from related economic and public opinion data.

For some American industries, for organized labor and for some trade experts, scars from the U.S.-Japan trade wars of the 1980s and early 1990s remain tender. Thus, the upcoming TPP negotiations may be contentious. Yet, among the general American public, there is support for deeper integration of the two economies through greater trade. So the political context in which these talks will take place is far more supportive than ever before.

A quarter century ago ties between Washington and Tokyo were characterized by public distrust and animosity. Talk of trade wars dominated newspaper headlines. And political rhetoric often verged on “Japan Bashing.”

In 1989, 63% of Americans believed Japan practiced unfair trade. More than half, 53%, wanted to increase tariffs on products imported from Japan. In 1995, 61% of the American public approved of President Bill Clinton’s decision to impose import duties on imports of luxury Japanese cars. And by 1997, 64% still saw Tokyo as being unfair.

And American critics of Japan participating in TPP will point to the ongoing U.S. trade imbalance with Japan, especially in the automotive sector, as reason for Washington not to conclude a TPP deal with Tokyo. The U.S. ran a $76.3 billion merchandise trade deficit with Japan in 2012, up 21% from 2011. And in 2010, the last year for which there is complete data, Japan shipped 1.5 million cars and light trucks to the U.S. Japan imported 14,000 such vehicles from the U.S. And the U.S.-Japan auto trade imbalance accounted for two-thirds of the overall U.S. trade deficit with Japan that year.

Yet, despite such figures and periodic trade tensions, Americans have generally held a favorable opinion of Japan. In 1990, near the high point of the Washington-Tokyo battles over trade in autos, rice and other goods, 63% of Americans nonetheless thought well of Japan, according to a survey by the Times Mirror Corporation. (Although all such opinion is relative, that same year 77% of Americans approved of Germany.) By 2009, 67% of Americans still felt favorably disposed toward Japan, according to the Pew Research Center.

And, a generation after significant anti-Japanese sentiment among the American people, there is significant support for improving trade relations between the U.S. and Japan. According to a 2010 survey, 60% Americans now want to increase trade with Japan, compared with 58% who would like to deepen commercial ties with the European Union and only 45% who want to boost trade with China. And a 2012 poll by the Chicago Council on Global Affairs found that two-thirds of the American public put a high priority on building a regional free trade area with the U.S. and East Asian countries.

So why the change? Despite the bilateral trade imbalance, U.S. exports to Japan are at a record high, up 37% from 2009. And a study by Japan’s Research Institute of Economy, Trade, and Industry estimates that the TPP would boost the U.S. economy by 0.11 percent, with Japan accounting for about 70 percent of that benefit. While this economic lift might appear insignificant, the benefits would be roughly equivalent to the projected payoff for the U.S. from the now moribund Doha Round of multilateral trade negotiations. This may be why, of the 113 comments received by the U.S. government on the issue of Japan entering the TPP, 100 were supportive, only 8 were opposed, and 5 indifferent.

Another reason may be that China has replaced Japan as America’s principal trade competitor, both in fact and in the minds of the American people. In 1990, Japan accounted for 40.7% of the U.S. merchandise trade deficit. China made up just 10.3%. By 2012, Japan accounted for only 10.5% of the U.S. global imbalance. China was responsible for 43.3%.

It is little wonder then that today 41% of Americans see China as the world’s leading economic power and thus the principal challenger to American economic preeminence. And according to a recent Pew Research survey, 49% of Americans want to be tough with Beijing on economic matters. By comparison, only 6% cite Japan as an economic powerhouse today compared with 46% who thought Tokyo was the top dog in 1990.

A more positive bilateral public disposition is no assurance of success for the TPP negotiations. Washington will want openings of the Japanese rice and auto markets that Tokyo will resist. As the talks become more acrimonious, public opinion on both sides of the Pacific could sour. But clearly these negotiations begin in a public opinion environment that is far more favorable than that which existed a generation ago.