Trade can affect men and women differently so the impacts of trade policies on women as entrepreneurs, workers and consumers needs to be better understood. Trade lowers prices, benefitting low-income households where women are disproportionately found, while trade facilitation particularly benefits women-owned businesses, which tend to be smaller and less well-financed than those owned by men. Assessing the impact of market opening under trade agreements requires an understanding of the sectors in which women work and own businesses. The OECD has developed a new framework to help countries understand the gender impacts of their trade policies and to help guide efforts to promote women’s engagement in trade and trade policy-making.
Inclusive trade
International trade is a major driver of economic growth: exporting firms earn higher profits, pay higher wages, and grow faster than non-exporting firms. Yet these benefits are not evenly distributed. Ensuring that businesses led by women, Indigenous People, and other historically disadvantaged groups are able to benefit from the opportunities provided by international trade will contribute to greater societal equality and higher economic growth.
Key messages
Recent trade agreements have increasingly included comprehensive gender chapters or provisions that reaffirm commitments to international standards for gender equality and commit to implement activities between trading partners that aim to reduce gender inequalities. The Global Trade and Gender Arrangement (GTAGA), a cooperation agreement, sets out many ways in which trade policies can be more inclusive of women. Ensuring trade is more inclusive is also a growing focus in fora such as the G20 and APEC.
Since SMEs tend to trade less due to the fixed costs of entering global markets, they benefit more from trade facilitation reforms. Many OECD countries have come a long way in easing procedures and reducing delays at borders. These benefit women-led firms that tend to be smaller. Moreover, automation of border procedures reduces opportunities for unequal treatment of women exporters in cases where a physical presence is required at border crossings. Automation also expedites customs procedures, which is important for women who generally have less time given their unpaid work responsibilities.
There are up to 500 million Indigenous Peoples worldwide in over 90 countries, of which 39.5 million live in 14 OECD countries. Indigenous people make an important contribution to the culture, heritage, and economic development of these countries, including through their long history of trading. With the right structures, systems, and policies in place, Indigenous trade can benefit Indigenous communities and the countries where they live. Indeed, OECD work on trade and Indigenous Peoples is guided by the aim to ensure trade is inclusive of Indigenous businesses and their communities.
Trade is not the root of many problems, nor can it solve them on its own. An integrated approach is needed to make the trading system work better for more people. This means three things. First, creating the environments where benefits from trade can materialise through domestic policies that encourage opportunity, innovation and competition – such as by cutting unnecessary trade costs and investing in people and digital and physical infrastructure. Second, doing more to bring everyone along, including in lagging regions where trade shocks can be concentrated. Third, making the international system work better, harnessing the full range of international economic cooperation tools to level the international playing field, addressing the gaps in the rules and doing more to ensure that everyone, from companies to countries, plays by the rules.
Context
How can trade policy support gender equality?
Closing gender gaps makes economic sense. Advancing the aim of women’s economic empowerment requires policy action across a wide range of areas, including increasing their participation in international trade. Although trade policies are not de jure discriminatory, they impact women and men differently due to dissimilar initial conditions.
Women business leaders face specific challenges in growing their businesses internationally
Women business leaders identified several key challenges to exporting:
- Finding business partners abroad
- Understanding foreign markets and navigating foreign regulations
- Accessing finance, including export finance, to grow their businesses
Moreover, women more frequently lead services businesses, and services are less traded than goods. Their businesses tend to be smaller and smaller businesses trade less.
