Is trade policy an effective instrument to narrow existing gender gaps? Can more gender-sensitive trade policies hinder the spread of the anti-globalisation backlash? This article attempts to provide answers to these questions with a focus on Africa.
Trade policy is not gender neutral. The distributional outcomes of trade vary between women and men, since they play different roles in society and in the economy, and they enjoy different opportunities. Moreover, women are not a homogenous group and, therefore, they are differently impacted by trade depending on their income, position in the labour market, educational level, race, etc. If trade policies are designed without taking into account their gender-specific outcomes, these policies risk magnifying existing gender gaps. Such an outcome could then be used as an evidence of the undesirability of further market opening.
Gender equality pledges made domestically or in the framework of regional or multilateral covenants can only be implemented if they are embedded in all policies, including trade policy. Taking actions to achieve gender equality and empower women in isolation from a broad spectrum of social and economic policies deprives them of the most effective channels to become operational.
Establishing clear links between trade policy and overarching goals, including gender equality and women’s economic empowerment, would further contribute to making trade a tool for sustainable development. It is important to recall the importance of trade for domestic producers in reaching much larger markets, for increasing the efficiency of domestic production and allowing it to attain economies of scale, for being a complement and a condition of the development of countries’ productive capacities, as well as one of the channels of technology transfer. Undoubtedly, many countries have used and continue using trade as a means of development. However, the benefits of trade have to be assessed against its asymmetries and possible negative consequences. A way of doing so is to complement the assessment of the risks and benefits of trade for a country as a whole with an analysis of its potential impacts on different segments of the population, in particular those who risk being “left behind”, including women and girls. Such an assessment may lead to the re-thinking of planned trade reforms or may point to the need for accompanying measures. The best approach is to conduct such an assessment prior to introducing new trade measures, be they based on unilateral commitments or negotiations.
How are trade and gender linked?
Trade has an impact on women’s empowerment and wellbeing, and gender inequality has an impact on countries’ trade performance and competitiveness. Let us have a closer look at the two sides of the equation.
Trade has an impact on gender through three main channels. First, trade usually leads to changes in the structure of production; some sectors may expand because of new export opportunities, while others may contract because of import competition. Such changes are likely to affect employment opportunities, remunerations, as well as the quality and security of jobs. Second, trade induces changes in the price of goods and services, which in turn have an impact on real incomes. Finally, the reduction or elimination of tariffs due to trade liberalisation diminishes government revenues and therefore may curtail its ability to provide public services.
These various impacts of trade can be examined through a gender lens. In the first case, the differential impact happens because women are usually clustered in some specific productive sectors and face more impediments than men to shift from one sector to another. Due to limited skills and mobility, the contraction of the sectors where they work may lead to jobs losses, with limited opportunities for employment in expanding sectors. Conversely, if women work in sectors that expand thanks to trade opening, the quality of the jobs created and the perspectives for skill development often remain limited because of horizontal and vertical gender segregation. Looking at the second channel of transmission, women are in general poorer than men and spend a larger part of their income on basic consumption goods. A trade liberalisation-induced reduction in the price of goods that form a large proportion of women’s consumption basket has a positive impact on their welfare and on that of the household. The impact is conversely negative if women are also producers and the price of their produce declines because of increased competition from cheaper imports. Moving to the third channel of transmission between trade and gender, since women tend to rely heavily on public services, reducing their provision increases women’s already heavy household burdens. For example, if education and health services are less available, women’s time devoted to the young and elderly household members increases.
We now consider the second side of the equation, i.e. the impact of gender inequality on countries’ trade performance and competitiveness. Using only partially the knowledge, skills, and potential of half of a country’s population curtails its trade opportunities and reduces its competitiveness. Recent studies have quantified the missed growth opportunities due to gender discriminations. A study by McKinsey estimates that in a full-potential scenario in which women play an identical role in labour markets as men, as much as US$ 28 trillion, or 26 percent, could be added to global annual GDP by 2025. A United Nations study estimates that if female farmers in developing countries had the same access to productive resources as men, yields on their farms would grow by around 20-30 percent; total agricultural output would increase by 2.5 to 4 percent in those countries; and the global number of people suffering from hunger would decrease by 12-17 percent. Gender gaps in access to productive resources, skills, training, technologies and knowledge have a high opportunity cost in terms of production and export with detrimental effects on competitiveness. Moreover, development considerations play an important role: since women are mainly responsible for food and children’s education, diminishing women’s opportunities affects not only their living conditions but also those of future generations.
Nevertheless, gender inequality has been used and is still used at present as a competitiveness strategy – for example within global value chains. Gender wage gaps exist in all countries in different degrees. Relying on female workers, who tend to be paid less and are less unionized that men, makes labour-intensive products more competitive in international markets where price competition is fierce and price elasticity of demand is relatively high. This strategy has been defined as a “low road” to international competitiveness. In the long run, it is not sustainable because it deteriorates the terms of trade, contravenes the ILO core labour standards, can become a source of social conflict, and may reduce the appeal of products to “ethical” consumers.
Trade policy implications
Having clarified the links between trade and gender, as well as their development implications, the next question is: What can be done to ensure that trade policy is beneficial for women or at least not detrimental to them? First, policymakers must have a good understanding of where women are in the economy. Second, they must assess how trade reforms may likely affect different productive sectors. Third, they should use these findings to identify the critical sectors where women are likely to be negatively or positively affected by trade. UNCTAD is developing a toolbox for the ex-ante gender assessment of trade measures to support countries to carry out this task.
While many developing countries are shifting their production and export strategies towards services, agriculture remains women’s main employer in many of them. This means that policies aimed at making agriculture more commercial and more technology- and export-oriented cannot ignore the implications for women. Let’s zoom in on some specific country experiences.
Rwanda is repositioning itself in the high-quality tea and coffee export segment. Such a shift may have both positive and negative implications for women. On the positive side, it could create opportunities for women to sell premium-quality products directly to processors, traders, or retailers in the destination markets, who may reorganise the value chain beyond gender stereotypes that assign specific roles to men and women, and be interested in the “story” behind the products they trade. On the negative side, it could favour commercially-oriented farmers and crowd out small and marginal farmers, a segment that includes many women. But even the suitable positive outcomes will not materialise automatically: women need to be provided with the appropriate infrastructure and marketing networks to reap the benefits of the policy shift.
Angola, for its part, is promoting a switch from the production of low-value-added staple crops to more value-added commodities. In order to avoid the risk of women being marginalised or excluded from this process, the domestic staple crops segment – where women are concentrated – also needs to become more dynamic and possibly more export-oriented. For this to happen, women’s improved access to extension services, production techniques, and training in business management is necessary, as well as better enforcement of civil law on land tenure. Though the Constitution draws a clear distinction between customary and civil law and states that customary practices are accepted only if they do not violate constitutional provisions, de facto inheritance and land tenure are largely determined by customary practices that deny women the right to own property on equal terms with men. Women’s traditional knowledge can also complement modern techniques and facilitate reaching foreign niche markets.
Many middle-income developing countries have relied on export-led growth strategies. This in turn has provided huge opportunities for women’s employment in labour-intensive manufacturing sectors, such as textile, clothing, and electronics, where women are supposed to possess gender specific skills. The workforce in Lesotho’s apparel sector is mainly female. The expansion of the industry can be attributed to the preferential treatment that Lesotho’s exports enjoy in the US market thanks to the African Growth and Opportunity Act (AGOA). While AGOA has played a key role in the development of Lesotho’s clothing industry, and this in turn has had a remarkable impact on women’s employment, a change in the terms of AGOA or the dilution of preferences due to preferential treatment being granted to other clothing-exporting developing countries, would jeopardise the competitiveness of Lesotho’s exports and threaten the gains achieved in women’s employment. To avoid dependence on a single trade instrument, export market diversification and product diversification, as well as the creation of a textile cluster, seem appropriate policy steps to take.
Tourism remains one of the main sources of growth and foreign exchange in many developing countries and a sector that employs many women. Moreover, tourism has the potential to improve the livelihood of rural women and households if it is linked to the culture and tradition of a country. As in many other sectors, women face horizontal and vertical segregation. While men typically occupy a broad range of positions, women tend to be clustered into low-skill, low-paid segments. A study on the tourism sector in Kenya showed that not only men have a significantly higher presence than women in the workforce, but they also dominate the most lucrative segment of the market, namely tour operatorship. Moreover, many more women than men are employed as seasonal, part-time, or casual workers. The study also found that cultural and societal norms, heavy household responsibilities, limited mobility, lack of adequate education, and legal obstacles related to land tenure are all elements putting women at disadvantage. Women’s role in tourism should be kept in mind when opening the different segments of the sector. Market opening bears the risk of providing only limited opportunities to women if they have no access to adequate education and training, or if it favours large hotels and resorts and leaves behind small-scale tourism enterprises – which are particularly relevant in the African context and offer opportunities to women. In parallel, gender should be mainstreamed in tourism policy, gender equality promoted in hiring and training, and linkages established between the tourism business and local micro and small enterprises.
A call for action
Gender equality is a human right and most countries are committed to it, but striving to fulfil this fundamental aspiration in isolation from a country’s main strategies has proved quite ineffective. Indeed, economic policies, including trade policy, are powerful instruments to translate gender equality aspirations into reality. For this to happen, they have to be coordinated and convergent. Trade reforms should be based on a thorough understanding of their impacts not only on a country as a whole, but also on specific segments of the population, including women and men. If market opening is expected to have detrimental effects on women (or on other groups), it may need to be postponed or adjusted. In many cases, the new trade environment needs to be accompanied by flanking policies to facilitate the adjustment and absorb shocks. Trade policies developed keeping in mind the wellbeing of all segments of the population and implemented along with corrective measures may greatly contribute to reaffirm the role of trade as a tool for inclusive and sustainable development and resist anti-globalisation movements.
Written by Simonetts Zarilli for Bridges Africa, ICTSD 13 June 2017