Gender and Trade Explainer – Developing Economics

The Gender and Trade Coalition was initiated in 2018 by feminist and progressive activists to put forward feminist trade analysis and advocate for equitable trade policy. This article is the first in a series of short, Q&A format ‘explainers’ unpacking key trade issues produced for the Gender and Trade Coalition by Regions Refocus. It was written by Erica Levenson (Regions Refocus) with inputs from Fatimah Kelleher (Nawi–Afrifem Macroeconomics Collective), Mariama Williams (ILE), Hien Nguyen Thi (APWLD), and Senani Dehigolla (Regions Refocus). Read the full article here.

1. How Are Gender and Trade Connected?

At the core of the modern global economy is an array of trade and investment rules that have been designed by developed countries’ elites and corporations. These interlinked rules reinforce the others’ impacts on national economies, enabled by international finance and trade institutions such as the World Bank, International Monetary Fund (IMF), and World Trade Organization (WTO) as enforcement mechanisms. From worsening human rights violations to degradation of the environment, the effects of trade and investment regimes impact every aspect of women’s lives, exacerbating and creating inequalities based on hierarchies of class, race, ethnicity, sexual orientation, and gender identity.

Behind the scenes of global economic policymaking spaces, corporations and the financial sector set the policy menu: liberalization, deregulation, and privatization. Through predatory loan conditionalities, trade agreements, and other practices, international finance and trade institutions have enforced these policies and created ‘enabling environments’ for foreign investments. Trade tariffs have been lowered; investment possibilities and controls have been liberalized; and regulations on the financial sector, markets, and corporations have been dismantled while at the same time the rights of major corporations (especially intellectual property) have been increased (Aguirre, Eick, and Reese 2006; Hathaway 2020; Hursh and Henderson 2011). Cheap imports are dumped by transnational corporations and their subsidiaries, primary commodity export dependence is perpetuated, public goods and services are privatized, and social protections are cut, among other things (Hormeku-Ajei et al. 2022). These are the effects of ‘successful’ neoliberal policies, and in particular trade liberalization.

The manifestations of deeply unequal trade and investment governance regimes can be seen in worsening poverty rates and gender inequality; widening gaps between the world’s richest and poorest countries, and the richest and poorest people; and adverse impacts on supposedly inalienable human rights, including access to education, secure housing, food security, and healthcare (Koechlin 2013; Navarro 2007; OHCHR 2015; Western et al. 2016). The severe impacts of trade and investment rules have been increasingly borne by people in developing countries, especially women (Grzanka, Mann, and Elliott 2016; Pearson 2019; UNCTAD 2014; UNCTAD and UN Women 2020).

Contemporary trade intensification, expansion, and privatization in the modern global economy relies on the systematic exploitation of women. Women form the backbone of the economy, in terms of both production and domestic labor: women are systematically underpaid, occupationally segregated, and marginalized, and their domestic labor is invisibilized and devalued. Gender inequality is not a question of happenstance but rather something that is necessary to the current function of the economy, in particular to trade. A critical analysis of trade from a feminist lens proves the urgency of recognizing the crucial role that gender inequality plays in sustaining global and national economies and illuminates key areas that serve as opportunities for policy interventions.

2. Why is Trade Seen as a Tool of Gender Equality?

In recent years, policy experts from leading international finance and trade institutions (namely the World Bank, IMF, and WTO) have begun to give more attention to the gendered impacts of trade. They have promised that trade liberalization will deliver gender equality and women’s empowerment: “trade increases women’s wages and can help reduce economic inequality” (Rocha and Piermartini 2023, 49); “trade and investment can be powerful drivers of gender equality” (World Bank 2019); “trade can dramatically improve women’s lives” (World Bank and WTO 2020).

These dominant international finance and trade institutions engage with the concept of gender equality superficially, and seemingly as a means of aligning their policies with the popular vernacular. There are no changes to their policy playbooks in pursuit of gender equality; rather, gender has simply been inserted into the discussion: they have added gender and ‘stirred’ (Coburn 2019; Hannah, Roberts, and Trommer 2022; Perrons 2005; Rao 2015; True and Parisi 2013). With minor differences between them, the World Bank, IMF, and WTO have effectively ‘pink-washed’ their policy prescriptions: while trade liberalization has long been the centerpiece of their policy menu, it is now women’s empowerment rather than economic benefits that provides a rationale (Hannah, Roberts, and Trommer 2022).

The adverse impacts of trade liberalization on women have been recognized by feminist economists and activists for decades (see for example Coburn 2019; Perrons 2005; Prügl 2017; Williams 2007, 2013). At workshops organized by UNCTAD in Geneva in 1999 and in Cape Town in 2001, participants cited evidence that “women tend to be more vulnerable to the negative effects of trade liberalization and less able to benefit from the positive effects” (Nordås 2003, 4). In response to concerted advocacy efforts of feminist scholars, activists, and development practitioners, a small but growing number of trade agreements have begun to conduct social impact assessments (SIAs) of trade-related activities (Dommen 2021; Elson and Fontana 2018; Noble 2018).

Analysis of gender impacts is typically included in SIAs, but “weaknesses in framing, approach and methodology” have led to strong critiques of the robustness of these assessments (Noble 2018, 15; see also Hannah, Roberts, and Trommer 2021; Joekes, Frohmann, and Fontana 2020). Moreover, existing SIAs are overwhelmingly conducted before a trade agreement has entered into force, and countries in essence wash their hands of gender concerns after an agreement has been finalized (Dommen 2021; Noble 2018). Human rights assessments of trade agreements, meanwhile, have also been strongly criticized for their inadequate analysis of gender (Noble 2018).

Worryingly, gender has been used as a litmus test of trade liberalization. When it comes to ‘proving’ the positive gender impacts of trade liberalization, the most common figure cited is women’s labor force participation rate, which tends to go up following trade liberalization (Bárcia de Mattos et al. 2022; Inter-Agency Network on Gender Equality 2011). But this aggregate figure does not provide a holistic representation of the reality, particularly for women in the Global South. While it is true that trade liberalization leads to more women getting jobs (hence the increase in women’s labor force participation rates), a focus on quantitative rather than qualitative statistics disguises the exploitative nature of the jobs created, most of which are at the bottom of global value chains (Inter-Agency Network on Gender Equality 2011).

3. How Has Trade Changed Women’s Role in the Labor Market?

Liberalization of trade has given way to structural changes in production processes. As governments in the Global South have become less and less involved in regulating labor markets (as per conditionalities in trade agreements and loans), labor markets have become increasingly unequal playing fields. The majority of manufacturing industries (dominated by corporations) have concentrated their production in the Global South, where they have a steady supply of cheap labor provided by low- and unskilled workers, mostly women (Inter-Agency Network on Gender Equality 2011, 5). These workers form the bottom rungs of intricate global value chains (GVCs).

In GVCs, different parts of the same product are often produced in several different countries, assembled in another, and sold to an entirely different group of countries. GVCs account for a growing amount of international commerce, global GDP, and employment; the development of GVCs is both a result and a goal of trade liberalization. The headquartering of manufacturing segments of GVCs in developing countries has gone hand in hand with the growth of monopsonistic labor markets, in which employers can keep wages low and conditions subpar because there are virtually no other jobs workers could get instead (see for example Kölling 2023; Manning 2020; Naidu and Posner 2022).

According to the World Bank (2021), GVCs “boost incomes, create better jobs and reduce poverty” (iii). Integration into GVCs is often idolized as a catalyst of development, supposedly bringing with it special benefits to job security and financial independence for women. However, despite most developing countries’ integration into GVCs, if current trends continue, it will take 108 years to achieve gender equality (World Economic Forum 2018).

Jobs for women in GVCs are concentrated into specific sectors (e.g., agricultural, garment) and are typically low wage, meaning that women are forced to seek more and more work while keeping up with their caring responsibilities. Women workers are assigned to jobs with at best questionable working conditions that do not require intensive training, technical abilities, or skills, while training for management positions or higher paying jobs is provided to men (APWLD 2023; Bárcia de Mattos et al. 2022). For rural women, it is particularly difficult to earn enough from wage labor to provide for household food security (APWLD 2023). Debt is commonly accrued by rural women trying to provide for their families’ basic needs; exploitative microfinance schemes often target precisely these women (Kalpana 2008; Mumtaz 2000; Ukanwa, Xiong, and Anderson 2018).

The gendered segregation of labor has been heavily reinforced by provisions within trade agreements such as the establishment of special economic zones, which attract foreign investment by “removing obstacles to business operations” that facilitate the exploitation and labor rights violations of women-dominated workforces (Gebrewolde 2019, 6; see also Fontana 2009; Kennard and Provost 2016; OHCHR 2019). The process of structural changes to the labor market amplifying gender inequalities, such as what occurs under trade liberalization, has been referred to as the feminization of work (Tran 2019; UNCTAD 2014). Trade in its current expression is incompatible with the wellbeing of women in developing countries, let alone gender equality. All of this is enabled and justified by the money corporations make, though most of the profits are routed back to the Global North.

4. How Does Corporate Capture of Trade Impact Women?

Increasing corporate involvement in the global economy has been another central goal of the neoliberal policy agenda. By dismantling barriers to trade, transnational corporations (TNCs) have been able to move in and push local producers out of business. With no competition or regulation, TNCs have monopolized entire sectors, and gained control over public services such as health, water, education, and electricity, eroding national policy priorities and human rights (Hathaway 2020; Holst 2023; van Elteren 2009). The project of consolidating power in the economy is inimitable from trade liberalization.

Trade liberalization in developing countries means that policies which propelled now-developed countries (NDCs) to their current levels of prosperity are impossible (Chang 2002). Corporations are invited in and domestically owned production (let alone participation of small businesses) is made virtually impossible, even though domestic specialization was a core development strategy of all NDCs; tariffs are dismantled in favor of ‘free trade’ even though tariffs accounted for a significant portion of NDCs’ revenue when they were developing; ‘free trade’ is only compatible with export-oriented industrialization, even though import substitution industrialization was used by virtually all NDCs; the list goes on. Trade liberalization therefore means that social concerns take a backseat to financial ones, entrenching structural inequality— especially gender inequality.

In the case of agriculture, for example, trade liberalization allows for the influx of industrially produced (and thus cheaper) agricultural goods into local markets that small farmers are unable to compete with, pushing them out of the market. This creates challenges for all small-scale farmers, but because of structural barriers (e.g., access to land, financing, and technology), small-scale women farmers face greater challenges than their male counterparts in dealing with the concentration and industrialization of agricultural output. Poultry dumping, for example, has been a major rallying point for decades due to its disruption of local markets, and the disproportionate impact on women farmers who are prominent in this sector (Madibana, Fouche, and Manyuela 2024; Narcisse 2010).

Corporate capture of agriculture has also accelerated related environmental degradation and created gendered challenges to food sovereignty. The increasing trend of mono- and cash-cropping has facilitated industrialization of agriculture, which has in turn greatly increased agriculture’s carbon footprint and disproportionately pushed women farmers out of business. Intensive marketing of hybrid seeds and commercialized agricultural inputs across communities negatively impacts farmer autonomy over farming practices, and women in particular since they are more likely to be custodians of local seeds. This is increasingly leading to the criminalization of local seed-banking (Gordon 2023). As local farmers’ rights are undermined and they are gradually put out of business, corporations are able to form monopolies and ‘capture’ the sector. These processes pose a direct challenge to food sovereignty (control over the production of and choice over what food we consume), with knock-on impacts on biodiversity loss and ecological breakdown as large swathes of land are commercialized.

Leading up to and in the immediate aftermath of the 2007-2008 food crisis, foreign companies and governments purchased 227 million hectares of land — half this land was purchased in Africa alone (Hodzi-Sibanda and Makaza-Kanyimo 2017; Yang and He 2021). This kind of ‘land grabbing’ is the second step in corporate capture, usually happening once local producers have already been pushed out of the market, enabled by trade liberalization. As women are disproportionately pushed into the monopsonistic labor market, sometimes into agricultural jobs working for the very corporations that pushed them out of business as farmers, structural inequality is exacerbated.

5. Strategic Policy Proposals

Leading international finance and trade institutions based in the Global North are failing to respond to the problems facing the Global South. While women in the Global South labor in sweatshops, make poverty wages, and risk permanent health impacts, all while performing unpaid care work that enables men’s participation in the economy, they are propping up intricate value chains worth trillions of dollars. Paradoxically, trade liberalization necessitates the exploitation of women as sources of cheap, disposable labor, yet it is promoted as a tool of women’s empowerment. Many official trade forums now discuss social components of trade policy and trade liberalization; however, this debate is taking place with little to no regard for the real needs, interests, and limits of women. To move towards gender-just trade, it is crucial to:

1. Include women’s rights organizations in trade and investment agreement negotiations. Feminist activists and scholars have heralded advances in understanding the specific gender impacts of trade, yet their analysis and consultation is at best tokenized and at worst ignored (as is the case with the WTO).

2. Shift analytical focus to the nature of employment created for women rather than simply on whether or not employment will be created. As we have seen, the assumption that trade liberalization is inherently beneficial to women because it “‘[lifts] all boats’” does not play out in practice (Hannah, Roberts, and Trommer 2022, 4). This shift has long been suggested by progressive international institutions such as UNCTAD (see for example UNCTAD 2013, 2014; UNCTAD and UN Women 2020). Moreover, a broad effort to collect disaggregated, qualitative data will facilitate the closing of the gender data gap, something that has long been on the agenda of feminist scholar-activists.

3. Give active industrial policies their rightful place in developing country policy spaces, for example by subsidizing domestic industries with a particular focus on gender equality. Genuine women’s empowerment is incompatible with trade liberalization and all of its knock-on effects; an improvement in the lives of women will not come without government intervention in employment creation. Targeted industrial policies should increase women’s share and benefits in trade and export opportunities that uphold the right to decent work.

4. Conduct social impact and human rights assessments before, periodically during, and after the implementation of trade and investment agreements. The assessments should be conducted independently by civil society experts in consultation with affected communities and contribute to participatory decision-making processes. Assessment findings should be presented to legislators before any agreements are ratified, and findings should be used to inform trade and investment negotiations and policy, including at the global level, to mitigate against their harmful impacts on women. In cases where periodic assessments identify unexpected adverse human rights and social impacts, institutional mechanisms should be developed to adapt agreements in real time and address the concerns raised by assessments.

5. Restore national ownership over the means of production. The growing challenge of privatization and corporate capture of agriculture, fisheries, public services, and finite natural resources such as water must be confronted by governments, especially in the Global South. This is particularly pressing as structural gender inequality in food security and sovereignty, water and sanitation, energy, care work and social provisioning, and the labor market threatens women’s survival in the face of a polycrisis including the climate emergency.

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Produced by Regions Refocus with Nawi, ILE, and APWLD / April 2024. Read the full article here.