Who Supports Free Trade in Latin America?

Abstract

This paper examines individual trade policy preferences across 17 countries in Latin America. The focus is on whether skilled or unskilled workers are more likely to support liberalised trade and on whether country characteristics, such as factor endowments, alter the preferences of skilled and unskilled workers. Based on the standard Heckscher‐Ohlin model and the Stolper‐Samuelson theorem, wage inequality in developing countries will decrease under free trade and unskilled workers will benefit. We find that on average skilled workers are more likely than unskilled workers to support free trade in Latin American countries. Separate country regressions reveal that this pattern is only statistically significant in 8 out of 17 Latin American countries. However, there are no countries in our sample in which unskilled workers are statistically more likely to support free trade than skilled workers, not even in the lowest skill‐endowed country in the sample. We also find that people from Latin American countries with higher GDP, faster growth, more cropland and a longer period of time since reform were more likely on average to support free trade.

Trade Policy, Economic Interests, and Party Politics in a Developing Country: The Political Economy of CAFTA-DR

“…Bottom‐up preference models assume that there are distributive consequences of trade policy and the public votes based on their perception of how it will affect them, their family, or, more broadly, their country (Balistreri ; Scheve and Slaughter ; Beaulieu et al. ; Mayda and Rodrik ). Standard arguments about the role of economic interests in determining trade policy preferences tend to draw on the Heckscher–Ohlin (HO) theorem and its related Stolper–Samuelson (SS) one (Scheve and Slaughter ; Beaulieu et al.…”

“…Standard arguments about the role of economic interests in determining trade policy preferences tend to draw on the Heckscher–Ohlin (HO) theorem and its related Stolper–Samuelson (SS) one (Scheve and Slaughter ; Beaulieu et al. ). The theorems suggest that owners of relatively scarce factors lose from trade liberalization, whereas owners of abundant factors gain.…”

“…Existing arguments about individual trade policy preferences focus largely on public opinion surveys (Scheve and Slaughter ; Beaulieu, Yatawara and Wang ; Guisinger ), elections with trade as one key issue (Johnston, Blais, Gidengil and Nevitte ), or legislative voting (Beaulieu ,b; Ladewig ), all of which are indirect measures of public preferences. In none of these cases does the public directly control the outcome of a trade policy initiative.…”

Effects of International Trade on East and Southeast Asians’ Views of China

“…On the other hand, the Stolper-Samuelson theorem does not explain who will benefit from trade among China, Malaysia, and Thailand that are all upper-middleincome economies (World Bank Country and Lending Groups n.d.). Besides, unlike what is expected by the theorem, some studies have shown that, despite the cross-national differences in the distribution of factor endowments, highskilled workers are more likely to support free trade with other countries than low-skilled workers, even in low-skilled labor-abundant countries (Baker 2005;Beaulieu et al 2005).…”

Changing Business Environments, International Trade and Regional Integration: Who Needs Cafta?

“…There are some exceptions, as businesses that are less competitive internationally, such as the US steel and textile industries, have repeatedly tried to seek protection from the government. In addition, skilled workers are more likely to support liberalised trade than unskilled workers (Beaulieu et al , 2005).…”