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Trade and gender equality

The 2030 Agenda for Sustainable Development requires evidence-based analysis and integrated and coordinated policy support in several areas of expertise of UNCTAD, including gender equality. The means of implementation commitments establish a link between on the one hand women's access to productive resources, the implementation of gender equality and non-discriminatory legislation and the creation of gender-sensitive development strategies, and on the other the goals of ending poverty, achieving gender equality and empowering women and girls, and promoting peaceful and inclusive societies. Trade policy has an important role in fostering all the above mentioned economic and social objectives.

Ex-Ante Gender impact assessment of trade agreements using UNCTAD’s trade and gender toolbox

Trade policies tend to have a strong redistributive effect, both across economic sectors and among individuals. Existing evidence about the effects of trade liberalization on women indicates no clear general pattern, but rather suggests that this relationship is likely context-specific and difficult to generalize. Therefore, the gender implications of trade reforms should be assessed on a case-by-case basis. An ex ante gender evaluation predicts the impact of a trade measure using data prior to its implementation. Essentially, ex ante gender analysis answers the question: what would happen to women if a given trade policy were implemented?

The Trade and Gender Toolbox is the first attempt to provide a systematic framework to evaluate the impact of trade reforms on women and gender inequalities prior to implementation of those reforms. The toolbox developed by UNCTAD has four main components. The first component provides the economic context of the selected country, depicts women’s participation in the economy, and singles out existing gender inequalities. The second component simulates the impact of trade reforms on the economy (e.g., exports, GDP, sectoral labor demand). The results of the first two components are matched to identify the critical economic sectors where trade liberalization is likely to have an impact on women by either alleviating or exacerbating gender inequalities. The third component provides a checklist for guiding the implementation of accompanying measures to achieve greater gender equality or to reduce the risk of making gender disparities worse. It also includes a monitoring framework to evaluate the effects of the trade reforms on gender equality over time by using specific indicators, such as changes in female employment, the gender wage gap, and access to productive resources. Finally, the fourth component of the toolbox is a Trade and Gender Index which summarizes the evolution of trade integration and gender equalities in the workplace at the sectoral level.

Stepwise approach of the toolbox to evaluate the impact of trade reforms on women and gender inequalities

The methodology was applied to a case of an agreement between a developing regional bloc and a developed regional bloc to estimate the likely impact of the agreement on the well-being and gender equality of women in one of the member countries of the developing regional bloc, mainly through employment. The same methodology can be used to assess the gender impacts of any other trade agreement or trade reform in any other country.

The findings of the analysis show that the estimated impact of the agreement on labour demand differs by sector. For agricultural crops where women in this developing country are active economic agents, namely tea, horticulture, and coffee, the average estimated effect on labour demand is marginally positive. This is most likely driven by an increase in the output of this sector. The fact that no negative effect is found for these crops is due to their inclusion on the list of “sensitive products,” which excludes them from the agreement’s liberalization schedule. Following implementation of the agreement, labour demand is expected to shrink in the public sector, albeit slightly. This is the result of the reduction in public expenditure due to the decline in government revenues induced by removal of the tariffs faced by partners. Regarding manufacturing products, the estimated impact of the agreement on unskilled labour demand is largely negative. Textiles and tobacco manufacturers are the least negatively affected, while chemicals and furniture-related activities are the most impacted, though to a small extent. It should be noted, however, that the chemicals and furniture sectors account for only a small share of the female workforce.

Identification of the critical sectors for female labour after implementation of the agreement

Source: Calculations by the UNCTAD secretariat based on the estimation of the Global Trade Analysis Project – Computational General Equilibrium (GTAP-CGE) model and on data provided by the country’s National Statistical Agency.

Note: The vertical axis refers to the number of women employed in the different sectors; the scale is not reported as it is represented in logarithmic form for reading convenience. The data about the labour force are from the country’s National Statistical Economic Survey (2016) and the data about the informal workforce are from the country’s 2009 Population and Housing Census, available via the Integrated Public Use Microdata Series (IPUMS) International (Minnesota Population Center, 2015). The estimated variation in the labour force (represented on the horizontal axis) is obtained from the estimation of the GTAP-CGE model.

Overall, these results suggest that implementation of such an agreement, compared to the Generalized System of Preferences (GSP) scenario, is likely to marginally affect women in the workplace (If the agreement does not enter into force, the country’s exports to the market fall under the less favourable GSP granted to developing countries). Yet, the effects are on average negative for labour demand in the sectors that account for a significant share of the country’s female workforce, though such negative effects are small in magnitude. Therefore, following implementation of the agreement, measures should be taken to minimize the possible adverse effects on women. For this purpose, the report includes a checklist to support policymakers in assessing accompanying policies that would facilitate greater gender equality or reduce the risk of exacerbating existing gender disparities. The three areas addressed in the checklist are export promotion, support to import-competing sectors, and other measures related to welfare. The report also presents data on the monitoring indicators and calculates the trade and gender index over time for the broad sectors of the economy in this developing country.

Monitoring trade and gender at the national level

At the national level, countries will have to develop indicators to monitor if trade is playing a positive role towards women's economic empowerment and gender equality, and capture the various dimensions of inequality that women face in the economic sphere and track progress made on them. Such additional elements could include:

  • female share of seasonal export jobs;
  • gender wage gaps, work conditions and social benefits in the export sector relative to the domestic sector;
  • female under-employment rate in import-competing sectors;
  • female share of high skilled and managerial jobs in export-oriented sectors;
  • female share of permanent jobs in export-oriented sectors;
  • coverage of unemployment insurance and coverage of cash transfer programmes for unemployed and under-employed population;
  • female share of landholding and immovable propriety;
  • female participation rate in technical and vocational training programmes (eg, extension services) and in government support programmes (eg, credit);
  • female use rate of storage, drying and processing facilities;
  • female rural employment in non-farm activities.

One such measurement effort is the ITC survey analysis across 20 countries (in five regions of the World). Its results, for example, reveal that women (as managers, owners and employees) are particularly involved into the clothing and textile sectors, which represents the main source of processed and higher value exports for LDCs and developing countries.

The results of the survey also show that women owned exporter firms are on average smaller than male owned firms. Cultural and regulatory barriers that explain why women-owned businesses are on average smaller than male-owned business include time constraints due to unpaid family care workload; limited access to productive resources like finance and land; and limited access to information and networks. Due to their relative small size, women-owned firms also suffer disproportionally from trade-related fixed costs, such as non-tariff measures.