trade policy brief
Trade and Gender
May 2021
Trade can affect women and men differently, so the impacts of trade policies on women as workers, consumers and entrepreneurs need to be better understood rade lowers prices, benefitting low income households where women are disproportionately T found, while trade facilitation particularly benefits women-owned businesses, which tend to be smaller and less well-financed than those owned by men ssessing the impact of market opening under trade agreements requires an understanding of A the sectors in which women work and own businesses rade agreements can include provisions to promote women’s participation in trade, which can T lead to greater economic growth and competitiveness, and reduce inequality The OECD has developed a new framework to help countries assess the gender impacts of their trade policies and to help guide efforts to promote women’s engagement in trade policymaking.
How do trade and trade policies impact women? Trade can affect women and men differently, largely due to differences in initial conditions. For example, women and men work in different sectors: in OECD countries, women tend to work more in services than manufacturing or agriculture and they often comprise the majority of workers in services that are less traded such as health, education and public administration. That said, when “indirect” participation in trade is taken into account – that is, sectors that provide inputs to other sectors that export, the percentage of women involved in trade more than doubles (Figure 1). Trade agreements can open foreign markets to goods and services in sectors with a high proportion of female workers orbusiness owners, creating new opportunities for women. Conversely, agreements can also create new competition from imports in sectors where women work, posing competitiveness and adjustment pressures. In both cases, the impacts on women will also depend on the extent to which domestic policies support adjustment or the enabling conditions to support women’s ability to take advantage of new trade opportunities.
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Indeed, trade policies impact women-owned businesses differently to those owned by men because womenowned businesses tend to be smaller, younger and less well financed. Women entrepreneurs also have less access to the professional networks that can provide mentoring and coaching, and they generally have less management experience than men, largely due to the ‘glass ceiling’. Small businesses -- where women are concentrated -are less able to navigate complex and non-transparent administrative procedures in order to import and export than larger firms that have more specialised staff or can more easily hire the help they need. Complex bureaucratic processes thus particularly inhibit the ability of small firms, which includes many women-owned firms, to engage in international trade. Another way trade impacts individuals and households is by providing a greater variety of goods and services at lower prices. In principle, lower prices impact women and men similarly. However, women are more likely to be poor—due to the gender wage gap that is prevalent in every country, due to lower pensions secured by women
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compared to men, and women’s more limited access to credit and finance. Moreover, single parent households are more likely to be poor than dual-parent households and the vast majority of single parent households are headed by women. Since low income households spend a greater share of their income than wealthier ones, and in particular spend a higher proportion of their income on essential goods such as food and clothing, they benefit more from the lower prices enabled by trade. Indeed, one of the main gains from trade over the past decades has been to lower prices of goods and services, bringing particular benefits to more vulnerable groups.
Gender gaps are widespread and multi-faceted and the policy actions to reduce them will also need to be so. Although domestic policies are often rightly prioritised, trade policies also have a role to play in supporting and strengthening women’s economic empowerment (Figure 2). This was highlighted in 2017 when 118 World Trade Organisation (WTO) Members and observers endorsed the Joint Declaration on Trade and Women’s Economic Empowerment at the WTO Ministerial conference in Buenos Aires. Signatories to the Declaration acknowledge that inclusive trade policies can contribute to advancing gender equality and women’s economic empowerment, which has a positive impact on economic growth. Following up on commitments contained in the Buenos Aires Declaration, in September 2020 a group of WTO Members established an Informal Working Group on Trade and Gender with the aim of increasing the participation of women in trade.
Why is this important? Women’s economic empowerment makes good economic sense: gender gaps in employment and labour market outcomes represent under-utilised areas of growth. Achieving equality in economic opportunities for women and men could augment global GDP by USD 28 trillion in 10 years – about the equivalent of the size of the Chinese and US economies combined (McKinsey, 2015). More specifically, reducing the gap in labour participation rates between men and women by 25% would raise global GDP by 3.9% by 2025 (ILO, 2017). Countries with higher rates of female employment are utilising their economic potential to a greater extent, which in turn positively affects competitiveness. Moreover, since jobs engaged in trade are better paid and more productive, and women generally have less access to resources, supporting women in trade can reduce within-country inequality.
Momentum in this area has been growing, with countries increasingly including gender-specific provisions in their preferential trade agreements. The number of genderrelated provisions in PTAs has steadily increased: as of July 2020, 80 regional trade agreements, of which 69 are currently in force and notified to the WTO, refer explicitly to women and to gender-related issues (Monteiro, 2018). Moreover, in August 2020, Ministers responsible for trade from Canada, Chile and New Zealand signed a Global Trade and Gender Arrangement that aims to help “make international trade policies more inclusive and ensure that the benefits of trade and investment are more
Figure 1. Women work less in sectors that are engaged in trade Share of employment in sectors that trade directly and in sectors that provide inputs for exporting sectors 70 60 50 40 30 20 10 0 Women Direct
Women Indirect
Men Direct
Men Indirect
Note: Share of total men’s and women’s employment respectively, in percent. ‘Direct’ refers to jobs employed in sectors that export; ‘indirect’ refers to jobs in sectors that provide inputs into sectors that export. Data refer to 2015 and are ordered by the highest share of women meeting foreign final demand. Source: Secretariat estimates based on OECD’s Trade in Employment database, 2019: http://oe.cd/io-emp.
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Figure 2. Broad impacts of greater participation of women in trade
More women in trade means:
Source: Korinek et al. (2021), World Bank and World Trade Organisation (2020), International Trade Centre (2020). Author’s elaboration.
broadly shared […] particularly […] given the common objective to achieve a sustainable and inclusive trade economic recovery from COVID-19” (Global Trade and Gender Arrangement – Joint Communique, 2020).
What more can be done to support women through trade? Since women and men are affected by trade differently, the gender-differentiated impacts of trade policies and trade agreements should be analysed and measured. Before a trade policy or trade agreement is put into place, the impacts on men and women—employment opportunities and, if possible, impacts on wages and other job characteristics--should be measured. This can help inform negotiating strategies, and the design and implementation of domestic policies needed to enable the benefits of the new opportunities to materialise and any negative impacts to be addressed and managed. Women’s engagement in trade should be monitored, with a view to better understanding the obstacles to their participation. Barriers to the expansion of women-owned businesses internationally--due to lack of access to finance, for example, or to trade-related policies such as cumbersome border procedures--decrease returns to their skills. That is undesirable—for them, and for economic growth. Generally, more trade-facilitating policies benefit
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women-owned businesses, including automation, which can save precious time for entrepreneurs. Greater digitalisation and cheaper online access can benefit in particular women-owned businesses that tend to be smaller and more vulnerable to downturns. More transparency in regulation whether trade-related or, for example, opening and closing a business, also benefits smaller enterprises more. Trade agreements are one important instrument used by trade policymakers and can provide greater access to global markets for women workers and women entrepreneurs. This is especially true as regards services, where women work more. Moreover, services are important inputs into many traded sectors so liberalising services can enable further trade in goods as well as services. Some Preferential Trade Agreements (PTAs) include specific provisions to increase cooperation and technical assistance for women entrepreneurs in order to ensure that they can take advantage of the opportunities provided by the agreement. PTA provisions can also reinforce parties’ adherence to existing commitments such as ILO Conventions on non-discrimination on the basis of gender and on equal pay, and core labour standards. Some PTAs also mainstream gender in wide variety of other areas covered in trade agreements, such as in promoting gender-sensitive standards.
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Finally, it is important that women are involved in the process of trade policy-making, including in leadership positions; currently, just under 1/3 of Trade Ministers in OECD countries are women. It is also important to ensure that women are part of negotiating teams, and that those teams engage diverse groups of stakeholders, including women. Stakeholder engagement processes may need to target women and women’s professional networks since they are generally less engaged in traditional professional networks. The OECD has developed a framework that countries can use at the national level to better understand the gender impacts of their trade policies on women as workers, consumers and entrepreneurs and for ensuring inclusive consultative processes. This framework can assist governments in their design of trade provisions and policies and monitor their impacts. Once women’s participation in trade is mapped, policy makers can decide how to ensure that trade is supportive of women’s economic empowerment—through greater market access in products and sectors where women work and own businesses; by ensuring women workers and entrepreneurs can engage fully on international markets; through complementary domestic policies to offset negative impacts; or through complementary trade promotion policies that support women so they can fully reap the gains from trade.
Further reading • Korinek, J., E. Moïsé and J. Tange (2021), “Trade and gender: A Framework of analysis”, OECD Trade Policy Papers, No. 246, OECD Publishing, Paris, https://doi.org/10.1787/6db59d80-en. • World Bank and World Trade Organization (2020). Women and Trade: The Role of Trade in Promoting Gender Equality, https://www.wto.org/ english/res_e/publications_e/women_trade_ pub2807_e.htm. • International Trade Centre (2020). Delivering on the Buenos Aires Declaration on Trade and Women’s Economic Empowerment, Geneva, https://www.intracen.org/uploadedFiles/ intracenorg/Content/Publications/ITC_TIG_ Report_20201209_02_web_pages.pdf. • Global Trade and Gender Arrangement – Joint Communiqué, Trade Ministerial meeting of the Inclusive Trade Action Group, August 4, 2020, https://www.international.gc.ca/tradecommerce/inclusive_trade-commerce_inclusif/ itag-gaci/2020-08-04-joint-communiquecommun.aspx?lang=eng Additional bibiliography: • International Labour Organization (ILO), (2017), “World Employment Social Outlook – Trends for women 2017”, International Labour Office – Geneva. • McKinsey Global Institute (2015), The power of parity: How advancing women’s equality can add $12 trillion to global growth, McKinsey & Company, September. • Monteiro, José-Antonio (2018). Gender-related Provisions in Regional Trade Agreements, World Trade Organization Economic Research and Statistics Division, Staff Working Paper ERSD2018-15, 18 December, https://www.wto.org/ english/res_e/reser_e/ersd201815_e.pdf
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