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Women in Trade Can Reinvigorate the WTO and the Global Economy

April 27, 2020

here there’s a will, there’s a way. And anyone who has looked at the global economic forecast lately is probably willing to consider a few ways to ensure that GDP growth doesn’t slow to a grinding halt.

Thankfully, there is a way to promote increased prosperity that will be widely shared by all through increased exports, more jobs, greater consumer choice and a broader, more diversified supplier network. Rather than allow a slowdown, we can supercharge the global economy by unlocking the power of women entrepreneurs and ensuring they can trade their products around the world.

As the World Economic Forum’s Global Gender Gap Report 20201 notes, there is a “strong correlation between a country’s gender gap and its economic performance.”2 Further, the report highlights that “countries that want to remain competitive and inclusive will need to make gender equality a critical part of their nation’s human capital development.”3

Women’s Economic Empowerment Isn’t Just the Right Thing to Do — It’s the Smart Thing, Too

The McKinsey Global Institute says the world would experience a $28 trillion — or 26 percent — increase4 in GDP if men and women were to participate equally in the global economy, making women’s economic empowerment a logical first step to unleash real growth around the world.

Much of that potential, however, remains untapped if not everyone is given equal access to engaging in international trade.

In many economies, women disproportionally face obstacles to owning and growing their own businesses, despite the significant economic payback their empowerment brings in terms of job creation, poverty alleviation and economic growth. New global commercial trends such as e-commerce have allowed companies of all sizes to tap into international business and trade like never before, spurring job growth and stability for their domestic economy. Much of that potential, however, remains untapped if not everyone is given equal access to engaging in international trade. In the words of the World Bank, “An economy cannot operate at its full potential if half of its population cannot fully contribute to it.”5

On a macro level, women’s entrepreneurship and exports can drive growth and economic success, as illustrated by the fact that women-owned businesses that export6 are more productive, employ more workers, pay higher wages and report higher-than-average sales. On a micro level, this suggests that increasing export participation by women-owned businesses and entrepreneurs may be one route to expanding the middle class and boosting household incomes, especially in developing countries.

If we ensure all people have equal access to the right tools, we can empower women entrepreneurs and open the door to proven catalysts for economic growth. In this regard, we need to build the case for which areas of trade must be addressed in order for individual women and the collective global economy to benefit, and how women’s economic empowerment could be addressed through creative and flexible negotiating tools.

While the law should be the last word on gender parity, we know that secular and religious norms and traditions are often more influential.7 That said, changing the law can be an important first step toward this economic and moral imperative. Additionally, while trade and entrepreneurship are not the only ways to contribute to the economy, they are opportunities for women to independently sustain themselves and their families. Empowering women to build their own businesses and to trade allows them to succeed despite well-documented workplace discrimination and inequality.8 Society and its institutions should continue to fight discrimination against women in the workplace, and entrepreneurship is not a substitute for workplace equality. However, women deserve another option — and one that provides even greater individual9 and societal benefits than traditional employment.

How to Advance Women’s Entrepreneurship and Participation in the Global Marketplace

In order to truly lead a business, a woman needs to be able to establish and own her business outright, access financial tools to invest in its growth, and freely meet with suppliers and customers, be they on the other side of town or the other side of the world. This puts a premium on women’s rights to entrepreneurship, rights to ownership (assets) and freedom of movement (mobility).

Sixty WTO members and observers — representing more than 84 percent of global GDP — have gender-equal legal rights in these three categories, but domestic changes will not drive the exponential growth that global adoption of these freedoms could precipitate. For this reason, the WTO is uniquely positioned to take action in order to bolster women’s participation in the global marketplace and allow the world to benefit from the resulting prosperity. The following list illustrates the variety of ways in which the WTO can explicitly promote gender equality in trade.

The WTO is uniquely positioned to take action in order to bolster women’s participation in the global marketplace and allow the world to benefit from the resulting prosperity.

Anti-discrimination: Members can support the ability of women to participate in international trade by making a horizontal commitment in their General Agreement on Trade in Services (GATS) schedules, stating that none of the GATS commitments that countries have made will discriminate against individuals based on gender.

Services sector liberalization: Members should pay particular attention in negotiations to how sector bias will negatively impact the ability of women entrepreneurs to engage in trade and prevent discrimination based on gender or marital status to access trade in services. Governments should review the tools that are widely used by small businesses, in particular those that are women-owned, as they look to grow and expand their international reach in order to protect and foster the provision of those services among all trade partners.

Import licensing: In 2017, more than a dozen members10 called for an article on gender equality that covers elements of domestic regulation within the scope of GATS article VI.4 as part of the Working Party on Domestic Regulation negotiations, stating: “Where a Member adopts or maintains licensing requirements, licensing procedures, qualification requirements or qualification procedures, the Member shall ensure that such measures do not discriminate against individuals on the basis of gender.”11 Members should encourage the adoption of this article in the domestic regulations negotiations to prohibit discrimination with respect to licensing measures.

Tariffs and tariff schedules: Members should review their tariff schedules, taking into account the specific impact on women traders or consumers as they commit to tariff reductions on imports, which is often overlooked in negotiations. This approach will help foster the success of women-owned businesses without causing them unintentional harm and also lower the cost of products used by women, including, for example, hormone-based contraceptives, pharmaceutical or hygienic items (including sanitary pads) or other tradeable goods that are exclusively used by women.

Sanitary and phytosanitary measures: The WTO Sanitary and Phytosanitary Agreement (SPS Agreement) has as a stated goal to prevent members from adopting or enforcing arbitrary or unjustifiable discriminatory measures or disguised restrictions on trade. The agreement, therefore, should take into account the gender-specific impacts of SPS measures. Reviews and harmonization across member countries would mitigate the obstacles that are specific to women traders in terms of compliance with such measures.

Addressing technical barriers to trade: The Declaration for Gender Responsive Standards and Standards Development, developed by the United Nations Economic Commission for Europe, provides a basis on which members could build commitments ensuring that standards are gender-responsive. The WTO Technical Barriers to Trade Agreement (TBT Agreement) established the TBT Committee, which would serve as a body to address specific member concerns about the gender-based discriminatory nature of certain technical regulations, standards or conformity-assessment procedures.

Intellectual property rights: A government’s imposition of strong intellectual property rights (IPRs) fosters entrepreneurship, and studies have shown that the stronger the IPR protections, the stronger the measures of gender equality in a market.12 In trade negotiations, members must consider how IPRs affect the flow of commerce, in particular for small and women-owned businesses, in order to eliminate discrimination.

Trade facilitation: According to research by the German development agency GIZ, women are particularly vulnerable at the border, due in large part to disproportionately low levels of literacy and access to information on regulations and procedures, coupled with intimidation practices often deployed through bribes and corruption.13 As members coordinate with National Trade Facilitation Committees and the WTO Committee on Trade Facilitation, they should formalize a feedback mechanism for women traders, for example, through women’s business associations, to apply a gender lens to trade facilitation reforms.

Digitally enabled trade: Prioritizing the digitization of customs processes will help to mitigate harassment of women at the border by reducing physical interaction and enabling a one-stop shop for information and document submissions. Moreover, the digital divide between men and women is still wide in many markets, often caused by cultural and social norms that impede access to devices and limit technological literacy. This hinders women traders from availing themselves of e-commerce tools, in particular as those tools are vital to reaching consumers across borders. As members negotiate the Joint Statement Initiative on Electronic Commerce, an important aspect to incorporate is enabling all traders to access the benefits of internet-enabled business — and not just those that are already online.

Market access: In negotiations, members should apply a gender lens to market access provisions to ensure that there are no protectionist measures that adversely affect women traders more than men.

Labour: Workers in labour-intensive sectors are not homogenous, and while trade agreements seek to establish provisions to protect workers, the protection is often not equally applied to men and women. Members should commit to pursuing equal trade benefits for men and women workers, with commitments such as equal pay, equal access to skills training and equal promotion opportunities.

The digital divide between men and women is still wide in many markets, often caused by cultural and social norms that impede access to devices and limit technological literacy.

Procurement: As women entrepreneurs seek to grow, winning government contracts is a critical way for them to showcase their innovation and build their credentials. Members should examine their current procurement statistics to determine how many contracts are currently being awarded to women-owned or women-run businesses, and subsequently establish an inclusive system to boost women’s participation and reduce gender gaps. For example, Chile and the Dominican Republic are clear examples of how public procurement has registered a marked increase in women’s participation in the market, thanks to capacity-building strategies and their inclusive systems.

Dispute settlement: Experts point out that, between 1995 and 2016, out of the 276 individuals selected to serve on panels, only 14 percent were women, and out of the 268 panels, only six percent were chaired by women.14 With greater representation by women on dispute resolution panels, in particular in leadership positions, greater consideration will be paid to issues that, to some extent, hinder women’s ability to engage in trade.

Capacity building: If women entrepreneurs are given the tools, such as webinars, export training and other targeted trade programming, to navigate international trade, it will be easier for them to participate in the global marketplace.

The following recommendations aim to enhance transparency within the WTO:

  • Monitoring and measurement: Members should commit to establishing a mechanism for monitoring and measuring progress for women in international trade. Only through establishing a current baseline will the WTO be able to gauge the effectiveness of members’ efforts and identify best practices that have the maximum impact on enabling women traders.
  • Trade policy reviews: The Joint Declaration on Trade and Women’s Economic Empowerment, signed at the WTO Ministerial Conference in Buenos Aires in December 2017, includes the voluntary inclusion of gender-related information in WTO trade policy reviews (TPRs). The parties to the agreement should make the sharing of gender-related information a mandatory component of TPRs, thereby holding members accountable for instituting tangible reforms.
  • Consultations: Members should ensure that their trade policy development process considers women traders’ perspectives as part of trade policy consultation processes, utilizing domestic business associations and other women’s professional groups to solicit feedback on ongoing trade negotiations.

Creative and Flexible Negotiating Tools to Fuel Women’s Economic Empowerment among WTO Members

In 2017, WTO members and observers endorsed the Joint Declaration on Trade and Women’s Economic Empowerment, a first-ever collective initiative to increase the participation of women in trade. Even with more than 120 members endorsing this declaration, the issue has failed to rise as a critical, enforceable priority for the WTO. WTO members should embrace creative ways to hold themselves accountable for providing equal economic opportunities to women and men.

To that end, the WTO has a number of flexible and non-traditional negotiating tools at hand.

One option that “reforming economies” and those that champion equality could both undertake is unilateral commitments, for example, as part of their GATS schedules. This unilateral approach allows governments to make appropriately ambitious commitments on trade in services. This option is a flame starter — while it does not raise the global obligation, it demonstrates to other WTO members a commitment to equality and thus encourages them to also take unilateral action.

Now — when the world needs growth and opportunity the most — is the time to act.

Another approach is a WTO plurilateral agreement on women in trade, through which willing WTO members could come together to codify the elimination of discrimination against women in trade. Such an agreement would eliminate domestic laws that perpetuate such discrimination and ensure compliance with the principles of equal access and opportunity for trade.

While such an option would be most effective among similarly ambitious economies, it would institutionalize important commitments that other countries could agree to and be held accountable for upon signing.

In closing, the World Bank sums up women’s economic empowerment best: “Although many economies have acted to reduce barriers to women’s economic participation over the last 50 years, the progress made cannot be equated with success.”15 The WTO plays a crucial role in driving women’s economic empowerment through the construction of a more inclusive trading system that fosters women’s ability to reach their full potential in the global marketplace. WTO members must continue to advocate for making women’s economic empowerment an enforceable principle of trade. Now — when the world needs growth and opportunity the most — is the time to act.

1 World Economic Forum, Global Gender Gap Report 2020 (Geneva: World Economic Forum, 2019).

2 World Economic Forum, “Conclusion”, online: <https://reports.weforum.org/global-gender-gap-report-2018/conclusion/>.

3 Ibid.

4 McKinsey Global Institute, The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth (McKinsey & Company, 2015) at 8.

5 World Bank, “Trade & Gender” (8 March 2019), online: <www.worldbank.org/en/topic/trade/brief/trade-and-gender>.

6 International Trade Centre (ITC), Unlocking Markets for Women to Trade (Geneva: ITC, 2015) at 3.

7 Daron Acemoglu & Matthew O Jackson, “Social Norms and the Enforcement of Laws” (2014) NBER Working Paper No 20369 at 1.

8 Kerry Hannon, “Inspired or Frustrated, Women Go to Work for Themselves”, The New York Times (3 October 2017).

9 Caroline Castrillon, “Why More Women Are Turning To Entrepreneurship”, Forbes (4 February 2019).

10 WTO, Working Party on Domestic Regulation, Communication from Albania, Argentina, Canada, Chile, Colombia, the European Union, Iceland, Liechtenstein, the Republic of Moldova, Montenegro, Pakistan, Panama, and Uruguay, WTO Doc JOB/SERV/258/Rev.5 (2017).

11 WTO, Communication from Argentina, Canada, Chile, Colombia, Iceland and Uruguay: Domestic Regulation — Development of Measures, Gender Equality, online: <https://docs.wto.org/>.

12 Lorenzo Montanari, “How IP Rights Empower Women”, Forbes (26 April 2018), online: <www.forbes.com/sites/lorenzomontanari/2018/04/26/how-ip-rights-empower-women/#7e39e7706e73>.

13 Markéta von Hagen, Trade and Gender — exploring a reciprocal relationship (Federal Ministry for Economic Cooperation and Development, 2014), online: <www.oecd.org/dac/gender-development/GIZ_Trade%20and%20Gender_Exploring%20a%20reciprocal%20relationship.pdf>.

14 Debra Steger, “Gender Equality in the WTO: The Need for Women Leaders” in Reshaping Trade through Women’s Economic Empowerment, CIGI, Special Report, 15 June 2018 at 57–59, online: <www.cigionline.org/sites/default/files/documents/Women%20and%20Trade.pdf>.

15 World Bank Group, Women, Business and the Law 2020 (Washington, DC: International Bank for Reconstruction and Development & The World Bank, 2020) at 1.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.


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