The Global South Takes the Lead on “Gender Sensitive” Trade Policy

November 16, 2016

The focus of this year’s Birdsall House Conference on Women was “beyond aid approaches to promoting gender equality.” Arancha Gonzalez, the Executive Director of the International Trade Center (ITC), was there to talk about the role of trade in that quest. Her argument, with which I agree, is that trade negotiators do have a role in promoting gender equality, but it is “not about having trade rules specifically crafted for women [such as rules of origin]… What we want are trade policies that are sensitive to where the women are in your economy” (at about the 5 hour, 10 minute mark of the webcast).

Knowing in which sectors women-owned businesses cluster can help policymakers identify where their offensive and defensive interests lie so that trade negotiations do not disadvantage women. It would also help in designing capacity-building and other programs to ensure that female-owned businesses can take advantage of new trade opportunities. At the CGD conference, and in an earlier speech in Canada, Gonzalez focused on problems arising from smallness, which is a general problem because of the high fixed costs of international trade. But it is a particular problem for women-owned businesses because they are disproportionately small, and not by choice. The ITC niche among international organizations is to help developing countries promote the inclusion of SMEs in international trade, and it puts particular emphasis on women and trade.

For Gonzalez, the recent Chile-Uruguay bilateral trade agreement is the “gold standard” in addressing gender issues—mainly because it is the first trade agreement to do so explicitly and in a separate chapter. I could not find an official English translation and my grad school Spanish is pretty rusty. But from what Gonzalez said about it, and what I could glean from the original text, Chapter 14 on Gender and Trade does not require a whole lot from the parties. Chile and Uruguay reserve the right to set their own policies on gender matters and to finance them subject to their own priorities and budget constraints. The parties also excluded the trade and gender chapter from the dispute settlement provisions that apply to other parts of the trade agreement, and most of the language is hortatory rather than legally binding.

Nevertheless, the chapter underscores the importance of gender equality, and of preventing discrimination on any basis, in ensuring that trade and growth are inclusive and sustainable. It encourages the parties to undertake cooperative activities to promote female participation in their national economies, as well as in international trade. And it creates a Gender Committee to oversee those activities, as well as to promote dialogue and information exchange.

American trade agreements since 2000 have all included chapters aiming to protect worker rights, but nondiscrimination in employment and remuneration was added only in 2007. (See my chapter on labor in this World Bank handbook for the full history.) And that is usually the only reference to gender issues. Though it now looks unlikely to pass anytime soon, if ever, it useful to compare the Chile-Uruguay agreement to the Trans-Pacific Partnership, which President Obama touted as the model for 21st Century trade agreements. The TPP has a separate (3-page) chapter on cooperation and capacity building that mentions gender equality as an example of a possible area of interest, but that is all I could find in a quick text search. There is also a nonbinding chapter on development that briefly mentions women and economic growth. References to women’s rights are even rarer in the most recent EU trade agreement text (with Vietnam).

With trade policy in both the United States and European Union facing a backlash, momentum could well move in a southerly direction. Hopefully the Chile-Uruguay agreement is an example that others will follow to ensure that trade and growth are inclusive, and that women workers and business owners have equal opportunities to benefit.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.