Global Consumers Weigh in on Protectionism

Global Consumers Weigh in on Protectionism

When U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner met last week with their Chinese counterparts in Washington, D.C., they pledged closer cooperation in dealing with a host of pressing economic issues, not the least of which are protectionist barriers to global trade. Yet, while policy makers in both countries – and other global leaders – champion principles of free and balanced trade, their respective populations seem to have mixed views on the topic.

Responding to a 52 nation survey by the Nielsen Company, close to half (45%) of consumers said they supported efforts by their governments to place trade restraints on foreign imports. Geographically, the percentages were even higher in Latin America (49%), North America (48%) and the combined regions of Asia Pacific, India, Middle East and Africa, where 47% of respondents either strongly agreed or agreed to some forms of protectionist measures.

Europe Not United in its Views

In Europe, however, only 39% consumers surveyed concurred with the proposition; albeit attitudes differed considerably among nations. Citizens of the former Soviet bloc, such as in Hungary (63%), generally scored higher than their western neighbors. Conversely, Nordic countries including Denmark (14%), Finland (20%), Norway (24%) and Sweden (15%) were well below the regional average. Moreover, those in Denmark and Sweden who strongly disagreed or disagreed with trade barriers outnumbered adherents by more than three-to-one; and in Finland, by more than two-to-one.

Protect at Home, Stay Open Abroad

Despite some appreciable support for protectionist policies within their own borders, consumers everywhere were markedly less enthusiastic about such practices in other countries. Indeed, when asked whether foreign governments should place trade restraints on imports, there were 13% fewer respondents who strongly agreed or agreed. The same was true in every region, where levels of support also were down by double digits.

As might be expected, the declines were most dramatic among consumers whose economies are largely export-driven. In Indonesia and Thailand, for example, support for trade barriers fell 31% and 22% respectively when carried out by other countries; while they dropped by 24% and 20% in the Czech Republic and Hungary.

Farms and Fords

Given the broad range of nations engaged in some form of trade restriction – including tariffs, subsidies, anti-dumping rules and “buy local” policies – the industries involved are equally diverse, though none is more universally protected than agriculture.

More than half of respondents in all but three surveyed countries – Hong Kong, Singapore and Vietnam – believe agriculture should be shielded from foreign imports. Nine of the top 10 nations are in Europe; with six from the former Soviet bloc and a seventh being Russia.

Consumers in North America showed the least support for protecting agriculture from imports, which may seem ironic to the rest of the world, since U.S. spending on farmers has long been a point of contention in World Trade Organization (WTO) talks.

On the other hand, U.S. consumers scored highest among nations wanting to protect their auto industries – not surprising considering the recent national debate surrounding automaker bailouts. However, foreign car companies now account for about a third of all auto production in the United States, and employ nearly 40% of the industry’s workers.

Unemployment and Global Economic Downturn

Although current findings show support for trade restraints, talk of global protectionism still outweighs the reality. But WTO Director-General Pascal Lamy says that could change. Forecasting a 10% slump in the volume of world trade this year – a post-war record – Lamay warns that even if economic activity begins to pick up in parts of the world, unemployment will continue to rise, prompting moves to protect local jobs and industries.

So far, according to Nielsen’s data, slightly more than half (55%) of all consumers in its survey favor hiring practices that treat new immigrants the same as native born or long-term residents; versus only 22% who disagree. Yet, a small percentage more (59%) believe governments should favor those businesses that hire native born or long-term residents; versus 16% who disagree.

One possible explanation may be that consumers distinguish between the practices of private enterprises and those of government. In other words, free markets should treat all people equally, while governments should favor their own citizens – a sentiment that shared across all regions.

View additional results from the survey.