7 August 2019

Free trade is popular, so why are protestors louder?

by Barney Trimble

Last month, the Department of International Trade published their findings on public opinion on free trade agreements (FTAs), with 66% in support of them. It matches what US polling has shown about the American public’s feelings on free trade: 56% believe tariffs to be bad, with 65% supporting FTAs.

Such high popularity for striking free trade agreements begs the question of why we do not see greater support amongst our political class. Unfortunately, the answer is in the question: politics. Politicians understand that, while free trade benefits society as a whole, some groups can lose out. In their political calculations, there is more to be gained by defending the interests of a few, politically organised and loud groups; rather than the greater, dispersed and disorganised interests of the many. For example, a farmer having to compete with overseas competition feels that their livelihood is at stake, while a consumer may not appreciate why their food shop is 20% less than usual.

68% of Americans, including a majority of Republicans, think that Trump’s tariff policy will see prices rise. Not only do they understand that free trade make theoretical sense, but that these tariffs will increase their costs every single time they enter a shop. Yet they still voted for Trump, knowing full well that he would levy these very tariffs.

Even those who support free trade can be swayed if they fear that they stand to lose out. In this respect, it is similar to those who accept that the UK needs more housing. They have seen the statistics, feel that house prices are too high, and accept that “something must be done”. It is only when a proposal for houses to be built near them is submitted that they recoil in horror, panic, and rush to vote for the first politician to oppose the proposed development.

This is understandable; we are not purely rational beings. So as free traders, we must accept this reality and look at working our way through it. For this, it is important to understand politics. In a representative democracy, voters weigh up a multitude of issues and choose the party that they align most closely with on the issues that matter the most to them. This offers free trade supporters two routes to success.

One is to push the major parties towards free trade. This is the ideal, but unlikely to succeed as long as the siren song of protectionist votes from threatened industries is able to lure unsound politicians towards the rocks of mercantilism. The more promising route is to raise the profile of trade in the national debate. With Trump’s trade wars costing consumers billions and the UK on the verge of creating a new trading identity, there has never been a better time – but it won’t last forever. We have to make the case for free trade loud and we have to make it now.