Shifting the dial on women and trade
Stephanie Honey is the Director of Honey Consulting Ltd, co-founder of Global Trade Insights, which offers executive education in trade policy, and a former New Zealand trade negotiator. She focuses on digital trade, Asia-Pacific regional economic integration, the WTO, agriculture, and inclusion in trade.
It has been four years since the Joint Declaration on Women’s Economic Empowerment was endorsed by nearly 120 countries at the 11th World Trade Organization (WTO) Ministerial Conference in Buenos Aires. The international conversation on empowering women has progressed considerably since then, and especially over the last two years, coinciding with a period that has seen severe pandemic impacts on women workers and entrepreneurs. This increase in pace is good news, but shifting the dial in a practical way for women is still a work in progress.
Why worry about women and trade? Making the case for action
Both anecdotal evidence and formal research point to the fact that women are underrepresented in trade. Access to the gender-specific data that would enable a more nuanced understanding of the challenge has been patchy at best, although this is starting to change. A 2015 paper from the International Trade Centre (ITC), which looked at 20 countries, found that only one in five exporting firms was led by women. It also found that women-led businesses are typically small and face disproportionately high market access barriers and capacity challenges, along with gender-specific cultural, social, and legal hurdles. Research published by the World Bank and WTO in 2020 similarly found that women tended to work in sectors that benefited less from trade – but also that trade can dramatically improve women’s lives, creating new and better jobs, enhancing consumer choice, and increasing women’s bargaining power in society.
A new study by New Zealand’s Ministry of Foreign Affairs and Trade has found similar trends – notwithstanding that New Zealand regularly comes at or near the top of league tables for women’s entrepreneurship and equity more generally. The paper shows that women are underrepresented in goods exporting firms, including in leadership and ownership roles – a difference that is particularly stark in large firms (responsible for the bulk of New Zealand goods exports), where only 4% have a female-majority leadership team. Employees of exporting firms generally enjoy higher-than-average earnings than their counterparts in non-exporting firms, but there is a larger wage gap in favour of men in exporting firms compared to non-exporting firms. It should be noted that the study did not look at services and digital trade, which have elsewhere been identified as sectors with significant promise for women.
Research, analysis, and coordination gathering pace
Complementing these efforts to build out the data picture, international organisations including the WTO, the World Bank, the ITC, and the Organisation for Economic Co-operation and Development (OECD) have published major analytical studies on these subjects in the last few years. This work includes detailed insights on the implicit biases, structural impediments, and trade barriers that women face. The OECD has developed an excellent new framework of analysis on trade and gender to help guide the development of more robust, evidence-based domestic and trade policies to address gender disparities.
At the WTO, discussions have intensified in an Informal Working Group on trade and gender that grew out of the original Buenos Aires Declaration, as the group (now counting 129 WTO members) prepares to launch an outcome document at the 12th WTO Ministerial Conference. The document will recommend that participating WTO members continue to work on increasing women’s participation in trade, including through ‘mainstreaming’ women’s economic empowerment issues into the regular work of WTO bodies and into Aid For Trade programmes and strategies, and deepen understanding through improved data collection, training and greater coordination of research.
Progress on the latter has already been notable, with the launch of the WTO’s Gender Research Hub in May 2021, bringing together researchers from the WTO, the OECD, and other international and regional organisations, eight universities, and the WTO Chairs Programme members of Mexico, Chile, Barbados, and South Africa. A series of public discussions designed to give greater visibility to the research, called Think Up!, kicked off on March 9th with an initial focus on the trade finance gender gap – a well-documented structural impediment to the ability of women to engage in trade.
Gender and trade agreements
Countries are also deepening their engagement outside of the WTO, as they seek to create a more enabling environment for women through new trade agreements. More than 80 free trade agreements now include gender-related provisions, but these provisions have tended to be modest, heterogeneous in scale, scope and ambition, and largely based on best endeavours.
One standout is a standalone initiative aimed at boosting women’s role in trade: the Global Trade and Gender Arrangement (GTGA). The Arrangement was signed in late 2020 by New Zealand, Canada, and Chile, the three members of the Inclusive Trade Action Group. Mexico has since joined, and other countries are also showing interest. The GTGA builds on what has gone before in terms of best-endeavours approaches to knowledge-sharing, but adds new elements and a more solid platform for cooperation in the shape of a formal Working Group to develop and drive new initiatives.
The GTGA acknowledges the need for gender-disaggregated data and evidence-based trade policy-making. It mandates cooperation in a range of areas, spanning financial inclusion, capacity-building, access to education including digital skills development, fostering leadership and entrepreneurship, business development, and internationalization, access to networks, trade missions, and government procurement. The Arrangement recognizes the importance of not weakening or reducing the protection provided in national gender equality laws in order to encourage trade or investment. It also stakes out new ground with a commitment by the Parties not to discriminate in licensing and certification for services trade.
The way forward
While it is too early to measure the impact of the Arrangement, it provides an important model for further work among WTO members following MC12. Critics may dismiss the idea of working on ‘soft norms’ around cooperation, capacity building, and data analysis as less valuable than binding ‘hard law’, but it is clear that we still have a way to go to understand how to effect practical change. This applies as much to the design of domestic programmes and reforms that will enhance the ability of women to take advantage of trade opportunities – still a rarity in many countries – as it does to outward-facing trade policy. Sharing experiences and ideas along GTGA lines can be an important driver of innovation and concrete action.
In the meantime, as the TradeExperettes’ publication 10 Quick Wins on Equitable Trade argues, countries could take simple but concrete steps to mainstream binding and enforceable provisions into WTO and regional agreements, including through trade facilitation measures and market access reforms in sectors where women are predominant (and which continue to see significant barriers to trade), especially services, textiles, and agriculture; developing new rules on digital trade and government procurement, and making explicit commitments to non-discrimination in labour, services, and investment.
On the latter, It was particularly welcome to see that the new disciplines agreed under the ‘Joint Statement Initiative’ on Services Domestic Regulation, concluded in December 2021 among a group accounting for 90% of global services trade, includes a provision on non-discrimination between men and women in authorisation procedures for services suppliers.
Enhancing participation by women in trade will promote economic development, inclusive growth, and gender equality. At a time when the outlook is hemmed around with downside risk, it is time to step up the pace on trade and gender.
The views and opinions expressed in this blog are solely those of the original authors and contributors. These views and opinions do not necessarily represent those of TradeExperettes, the TradeExperettes editorial team and/or any or all contributors to this site.