Global Policy Forum

On the Road to Hong Kong: Gender-Fair Trade?


Toward a sustainable, gender-fair, just governance

By Christa Wichterich*

World Economy and Development in brief
November 6, 2005

More and more facts, figures and empirical evidence prove the highly uneven, unequal and unstable effect of trade liberalisation. Growing inequalities among and within countries show that trade liberalisation does not generate equitable development. And a growing body of empirical data indicate the particularly harmful effect on poor women in the global South where free trade does not lead to economic growth but to new forms of poverty and insecurity.

* Impact of Trade Liberalisation on Women

Let me quote four examples from the agricultural, industrial and service sector:

* The frozen chicken parts exported on a large scale from Europe to West African countries is a well documented example how in the agricultural sector the subsidised dumping of products from the North outcompetes small scale and subsistence farmers, the majority being women in those countries. This erodes complex production and trade systems and consistent value chains in the respective countries, destroys the livelihood of small farmers, producers and traders, and worsens the prevailing food insecurity of poor and vulnerable groups in these societies.

* Since women have been called the winners of trade liberalisation and of foreign direct investment because they got jobs and income in the labour intensive export production, the recent conclusion of the multi-fibre agreement showed that these gains are not at all sustainable. The end of the quota system and further liberalisation lead to de-industrialisation, defeminisation of employment and unemployment in many countries. Simultaneously, the growing competition after tariff reduction and the race to the bottom lead to more subcontracting and further informalisation of the production chain resulting in poor working conditions in sweatshops and less income for casual and piece-rated home workers or self-employed workers. This ends up in growing income insecurity and precarisation of employment, and a high risk of becoming a "working poor" or unemployed (see fact sheets on Multi-Fibre Arrangement).

* In countries where markets are opened to foreign retailers, big food chains and supermarkets, a kind of economic cleansing of market places by municipalities and governments is taking place. Women street vendors who struggled many years for space in the local markets are pushed aside and displaced so that costumers have free access to the big business shops and brand name malls.

* Lowering of tariffs reduce governments' income and make for further de-investment in public services and dismantling of public institutions. However, poor women depend e.g. on pubic health care and affordable drugs because they can't afford private service providers and expensive medicine.

This is not to deny that a number of high-skilled women benefit from trade liberalisation. However, at the same time millions of women workers, small-holder farmers and petty traders are loosing access to productive resources, loose space in domestic value chains and markets, and loose livelihoods and entitlements. The terms of trade for the working poor, especially women, are not improved by trade liberalisation as enshrined in the AoA, NAMA and GATS. On the contrary: social and economic rights of women spelled out in the Beijing Platform for Action are ignored or even defined as trade barriers subject to deregulation. At the same time, the space and opportunities of governments to enforce women's rights and to fight poverty in the framework of the MDGs are confined.

*Development Goals and the Trade Liberalisation Strategies of the EU

As a European network, WIDE has an eye from a gender and development point of view on the EU-Trade Commission and its strategies in the WTO. We see the Commission as a driving force behind the expansion of the scope and the mandate of the WTO, as a driving force behind the concept of "deeper liberalisation" and WTO-plus agreements, and presently as the driving force behind the shift to new work methods in the WTO and the shift "from stand off to trade off" as trade commissioner Peter Mandelson called it (London, 21.07.05).

WIDE is alarmed that development objectives are increasingly subordinated to and bypassed by the current pro-active and fast track liberalisation course of the Commission. The EU demands rapid and radical market opening from countries of the South in exchange for its own very limited opening of the agricultural sector. We contest the package-deal and bargaining-chip strategy because of its adverse impact on the promise of development made in Doha. Instead of rebalancing multilateral trading rules to the interests of developing countries as promised in Doha, the very same rules for trade liberalisation and accelerated market access are redefined as "fundamentally important tools in the fight against poverty and achievement of the Millennium Development Goals" as Director-General of the WTO, Pascal Lamy, says (at UNCTAD, 06.10.05). He calls "services opening… an indispensable element of development strategies" (Montreux, 05.10.05).

Despite the empirical fact that in many countries there is no link between trade liberalisation and growth, wealth and poverty reduction, progressive market access is declared a one-size-fits-all model for development. By demanding the introduction of benchmarks into GATS, applying the Swiss type of mathematical formula for tariff cuts and demanding to bind tariffs at a low level, the space for decision making of national governments, for choice of heterodox economic policies and for domestic regulation is dramatically reduced.

Simultaneously, in the name of development and poverty reduction the EU has retabled the Singapore issues in its Economic Partnership Agreements with ACP countries although those were clearly rejected by the ACP countries in Cancun. Appropriating the language of development, the new modalities and the new complimentary approaches are not only to the detriment of the principle of flexibility in GATS and a disrespect for other governments' decision not to accept imposed issues and proposed multilateral rules. They actually turn the promised development agenda into an agenda which distorts development in the South. The question is: whose development is the EU talking about?

EU Trade Commissioner Peter Mandelson explained the rationale behind the current free-trade offensive of the Commission: after the rejection of the EU-constitution, the EU should demonstrate political unity with a common commercial policy in order to improve the EU competitiveness vis-í -vis the US and the new emerging markets in Asia and "strengthen the external economic leverage" of the EU. The Commissioner's slogan "Big in Europe, big in the World" doesn't leave any doubt that this strategy is adopted in the interest of the big EU-based corporations and links liberalisation of the EU-internal market to WTO agreements (London, 21.07.05) as it is done in a complementary way with the EU-Service Directive and GATS. The question is: whose gains is the EU talking about in the Doha Development Round?

Recently, the World Bank corrected its earlier projections about the gains from the Doha scenario. Not 60% as projected two years back would go to developing countries, but only 30%. Most of these benefits will be captured by a small number of large developing or middle income countries, and in those countries actually by big business. While the poverty reduction impact is of microscopic dimension, 70% of the gains would go the developed countries (see >>> here). The majority will loose more than they will gain.

WIDE contests the offensive, corporate-oriented liberalisation strategy of the EU-Commission which promotes its self-interests at the expense of development in the South and at the expense of the weaker economic actors, such as women farmers, workers and traders in the global South. In many countries with developing economies, including the ACP and LDC countries, further tariff cuts for agricultural as well as for non-agricultural goods, and the dismantling of protection of domestic markets, means "kicking away the ladder" - as the economist Ha-Joon Chang called it – the ladder to the development of effective domestic markets, to food sovereignty, to protection of weaker sections of the economies, e.g. informal economies, women farmers and traders, small and medium scale enterprises, public goods and better public services.

WIDE contests the definition of coherence between development and trade policies recently forged by the WTO and the Bretton Woods Institutions. The World Bank offers development aid in form of new loans to developing countries for covering adjustment costs alongside with the opening of markets. The World Bank's "Aid for Trade" adjusts development aid to trade liberalisation. WIDE's understanding of coherence is just the opposite presuming that trade has to be adjusted to a development framework of social justice, enforcement of human and women's rights, reduction of inequality and poverty eradication.

* Fair Trade Agreements and Gender

Recently, feminist concerns about gender inequality and trade have been acknowledged not only by UN organisations but by the World Bank and economists likewise. Market access for women is made the key to gender equality just as it is made the panacea in the neoliberal regime of free trade. UNCTAD and others demand "to make liberalisation work for women" by providing them with more jobs in export production, better career, investment and entrepreneurial chances and more credit facilities. However, given our analysis of the WTO agreements and the pressure for progressive liberalisation exerted by the EU, WIDE does not recognize that simply more participation of women in trade liberalisation and more benefits for women would be the solution to unfair distribution, social inequality and new forms of poverty systemically produced by the free trade agenda.

WIDE goes beyond the demand for equal rights and gender equality. We question the export- and free-trade-oriented as one-size-fits-all development model. We challenge trade agreements which violate or involve high risks to human and poor women's rights such as the AoA which endangers the right to food, or the TRIPs and the GATS which endanger the right to health. We contest that the WTO agreements delink trade objectives from social, environmental and sustainability objectives.

Fair multilateral trade agreements can't but include from the very beginning considerations for equitable and sustainable development as well as for social and environmental policies. Fair multilateral trade rules can't but leave space and political options to developing countries to protect domestic markets, local producers and traders, as well as public services and goods. Fair trade rules should include one principle phrased out in development cooperation and in environmental policies: the precautionary principle or "do no harm". To ensure that trade agreements do no harm to the most vulnerable economies and most vulnerable sections in society, sustainability impact assessments (SIAs) should be done before proceeding to a new round of negotiation and further steps of progressive liberalisation.

It's high time for a paradigm shift in EU trade policies. Trade agreements must be bound by the existing international agreements on human rights and women's rights, on ecological sustainability and the right to development and eradication of poverty. Therefore, WIDE asks the EU to immediately stop its pressure and tactics for rapid progressive liberalisation. The new modalities result in shrinking policy space for the majority of countries in the South meaning less options for heterodox policy choices and for poverty eradication, for the protection of domestic markets, the improvement of the public sector and enforcement of social and economic rights of weaker economic actors such as women farmers, workers, traders and service providers.

EU Trade Commissioner Peter Mandelson stated that the EU "will take no lectures from anyone on the needs of developing countries or the development goals of the Doha round" (Geneva, 20.10.05). Under the assumption that the EU Trade Commission is aware of poor women's development needs, WIDE would like to ask some advice and assistance to respond to our friends in the South inquiring what is in there in the WTO agreements for their development:

* What answer does the Commission have for Dalit women in South India who have less access to water due to depletion of the ground water level because of irrigation for export production and appropriation of ground water for bottled water by TNCs ?

* What answer does the Commission have for African women farmers about possible solutions to dumping and box shifting in the AoA?

* What answer does the Commission have for poor women in the global South, in particular the growing number of HIV/AIDS infected women, for whom access to public health care and affordable drugs is a question of life and death?

About the Author: Christa Wichterich is member of WIDE. WIDE, Women in Development Europe, works since 20 years on development and women's rights, and since 1995 particularly on the development-trade-and-gender-nexus. This paper has been presented to a Public Hearing under the patronage of the Intergroup on Globalisation in the European Parliament in Brussels, organised by Friends of the Earth Europe, WIDE and Heinrich Bí¶ll Foundation, 9 November 2005.

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.