DDG Ellard: WTO is taking action to make trade work for women
In her keynote speech to the WTO Chairs Programme webinar “Inclusive Trade: Legal and Economic Perspectives on Gender and Employment” on 17 December, Deputy-Director General Angela Ellard discussed ways in which trade policy can contribute to women’s economic empowerment. She underlined recent developments institutionalizing the issue of gender in the WTO and emphasized the importance of the research on trade and gender conducted under the Chairs Programme. The full text of her speech is below.
Ladies and Gentlemen,
I am delighted to be part of this event launching a very important project of the WTO Chairs Programme, which explores the intersections between trade, employment, and decent work for women.
The global economy is not gender-neutral. Evidence shows that women represent 38% of the global workforce, yet they receive only 77% of what men earn worldwide. Globally, 606 million women provide unpaid care on a full-time basis, compared to only 41 million men.
Trade is not gender-neutral either. Women face higher obstacles than men in accessing the global market and the economic opportunities created by trade. Women entrepreneurs face higher trade costs than men, which prevent them from going international. As a result, only 1 in 5 female-owned small businesses is exporting.
Gender inequalities are rampant, and the COVID-19 pandemic has widened the existing gaps between men and women to a point that, in today’s world, so many women are set back economically and socially. Women lost more than 64 million jobs last year, a 5% loss, compared to 3.9% loss for men. Yet, only 9% of all measures taken to mitigate the COVID-19’s impact target women’s economic security.
Women entrepreneurs have been de facto excluded from many relief packages set up by governments because they condition access to requirements that women entrepreneurs, who often run smaller businesses, cannot meet. The majority of them are self-employed, and many work from home, which makes it impossible for them to access the relief measures, which are often limited to companies above a certain number of employees.
We can change this paradigm through trade. Inclusive trade can open the door to women’s employment, decent work, and economic empowerment. Trade can make a difference by lifting women, and therefore their families, out of poverty.
In fact, firms that trade internationally employ more women.
Worldwide, women represent 33% of the workforce of exporting firms, compared with 24% of non-exporting firms. Moreover, women constitute 36% of the workforce of firms involved in global value chains and 38% of the workforce of foreign-owned firms. This is 11 and 12 percentage points more than the proportion in firms that are not part of global value chains and are domestically-owned firms.
In some countries, such as Morocco, Romania, and Vietnam, women represent 50% or more of the workforce of exporting firms, thus creating jobs for more than 5 million women in these countries. And this is roughly 15% of the female population working in these countries.
Trade can also free women from the informal sector, where women are often concentrated, and the risks associated with it. For example, in Afghanistan, 96% of women-owned businesses are unlicensed. Working in the informal sector leaves women without the protection of labor laws and deprives them of social benefits. Women work for lower wages and in unsafe conditions. Trade offers them the opportunity to work more safely and conduct their businesses in the formal sector. According to our joint study with the World Bank, women are 20% more likely to work informally in sectors with low levels of exports compared with 13% in sectors with high levels of exports.
While this is interesting data, we need to understand what is actually behind these statistics. And what’s behind is global trade rules and trade agreements, including those concluded at the WTO. So, let me now elaborate on how trade fosters employment for women and improves women’s working conditions.
First of all, trade policy can create opportunities for women to enter the workforce.
In the last decades, a majority of WTO members have designed gender-responsive trade policies that promote women’s employment. Such policies are aimed at supporting economic growth and development, or even responding to shortfalls in the workforce in export-oriented sectors by hiring women, thus continuing to drive their economies. Nigeria, for instance, fostered women’s participation in the construction sector, where a labour shortage was identified. Similarly, in Zambia, women were encouraged to work in the male-dominated mining sector.
Many governments include women’s economic empowerment and their integration in the job market as a key priority in their national trade and investment strategies.
They mostly use financial incentives to achieve this target. For example, some trade policies envisage financial support to key export sectors to hire women. Others focus on re-integrating women who are on career breaks or reducing the number of women leaving the workforce because of childbirth. Some trade policies also have made women’s employment a criterion for eligibility for grants.
By supporting women entrepreneurs, WTO members also support women’s employment.
For example, some trade policies provide financial incentives in the form of tax credits to encourage small businesses to re-employ women disconnected from employment. While these incentives are provided to both male- and female-owned small businesses, governments can also support women’s employment by targeting women entrepreneurs.
In addition, businesswomen themselves employ a vast number of female workers. Data from WTO regional surveys in South Asia, East Africa, and Latin America show that in companies with fewer than 10 employees, which are vastly owned by women, 57% of workers are female.
Moreover, trade policy can balance the scale in favour of women by reducing gender discrimination and creating more decent work conditions.
Some trade policies have had the result of socially empowering women.
Trade policy can transform unpaid domestic work and care into paid work. For example, Japan opened its services sectors to foreign housekeepers, with a view to promoting women’s participation in society, meeting their need for assistance for housework, encouraging economic growth, and creating jobs for other women.
Trade policy can reduce wage gaps between men and women. For example, Switzerland’s government procurement policy has conditioned the allocation of contracts to companies that have and implement an internal wage equality policy.
Some trade policies, while not primarily targeting women’s economic empowerment, have resulted in better working conditions for female employees and even better social laws base on gender equality. This is the case in the Philippines where the government took measures in support of its business process outsourcing (or back-office services) sector. Initially, these measures were meant to support the sector at large, but more than 55% of the industry’s workers are female. Thus, the measures aimed to boost the sector had a positive effect on gender equality.
In many countries women have been banned from certain professions due to their physically demanding or dangerous nature. This has kept women away from higher-paid work in traditionally male-dominated sectors. But the tide is turning. To give but a few recent examples, in 2018, Ukraine, where the gender pay gap is 20%, abolished the list of 458 jobs from which women were legally barred. Kazakhstan, where women earn on average 32% less than men, did the same a few months ago. Among the more than 200 professions previously denied to women were relatively well-paid jobs in construction, mining, and oil extraction sectors. This is an important step as women earn 3 times more in such male dominated sectors.
My next point is that issues related to women’s employment have been addressed in some trade agreements.
Some regional trade agreements, especially more recent ones, contain gender provisions and even chapters. They recognise women’s contribution to economic growth, sustainable development, and socio-economic transformation.
Some agreements establish gender equality in the workplace as a key objective. Others outline a “toolbox” of measures, such as capacity-building and skills enhancement of women at work; programmes promoting gender equality within enterprises; collecting and using gender disaggregated labour statistics; or ensuring the stability of employment and professional progress for women workers through technologies.
Some trade agreements also address women’s working conditions focussing on childcare, nursing mothers; the prevention of gender-based workplace violence and harassment; and the elimination of gender discrimination in employment.
The WTO is playing its part too.
Since 2017, two thirds of our membership has been exploring how trade can support women’s economic empowerment. Over the past year, these members have crafted the WTO’s first formal Declaration on trade and gender equality — a Declaration supported so far by 121 WTO members, to be adopted at the WTO 12th Ministerial Conference when it takes place.
Through this Declaration, these members are taking action in areas crucial to advance women’s economic empowerment through trade, such as gender-disaggregated data collection, trade policy making, Aid for Trade, and female leadership. This Declaration gives the WTO a strong mandate to work on trade and gender.
Another positive development is an inclusion of a non-discrimination provision into the Services Domestic Regulation plurilateral agreement, which was concluded a few weeks ago among 67 WTO Members. This provision prohibits gender discrimination in the context of authorization procedures for service suppliers. And this is the first gender equality provision in a WTO-negotiated outcome.
These developments further institutionalize the issue of gender in the WTO, transforming the Organization from a gender-blind to a gender-responsive one.
To conclude, I would like to highlight the Treaty of Versailles of 1920, which establishes the principle of universal peace and stipulates that it can be achieved only if it is based on social justice. And it adds that one of the components of social justice is the protection of women.
I am sure you are asking yourselves why am I quoting from this Treaty? What’s the relationship with trade? Well, this Preamble sits on the wall of the main entrance to the WTO building. I believe this message from the past carries a lot of weight, especially today as the COVID-19 pandemic has destroyed the economic security of so many women and as societies struggle to protect them.
I therefore cannot emphasize enough the importance of the research on trade and gender conducted under the auspices of our Chairs Programme. The WTO is acting to make trade work for women, and when women do better, societies do better.