Despite the liberalisation of trade in a formalistic sense, the concerns of women continue to remain underrepresented in trade negotiations, and the economic hardships of women have been exacerbated as a result of the COVID-19 pandemic. Therefore, reports that the final India-U.K. agreement will include a chapter dedicated to addressing barriers which disproportionately exist for women in trade, are welcome.
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WITH the culmination of the fifth round of negotiations, the India-United Kingdom Free Trade Agreement ('FTA') is expected to see the light of the day by October this year. The U.K. Government's Negotiating Objectives provide for promoting women's access to the full benefits and opportunities of the agreement as workers, business owners, entrepreneurs and consumers. It is therefore reported that, unlike traditional FTAs, the final India-U.K. agreement will cover a wide range of areas, including a chapter dedicated to addressing barriers which disproportionately exist for women in trade.
Literature on theories of discrimination and gender mainstreaming in trade policy has gained some traction over the last two decades. Scholars have asserted that economic growth affects gender equality in multiple ways, and gender biases further influence macro-economic outcomes including trade, imbalances and inflation. Much like how patriarchy as a social condition is exhibited in the actions of individuals in their personal professional spheres, States and market systems also have an inherent strain of gender inequality that has to be investigated, identified and improved upon.
“Much like how patriarchy as a social condition is exhibited in the actions of individuals in their personal professional spheres, States and market systems also have an inherent strain of gender inequality that has to be investigated, identified and improved upon.
Despite the liberalisation of trade in a formalistic sense, the concerns of women continue to remain underrepresented in trade negotiations, and the economic hardships of women have been exacerbated as a result of the COVID-19 pandemic. The World Trade Organization's Joint Declaration on Trade and Women's Economic Empowerment signed in December 2017 reinforced the need to incorporate a gendered perspective to international trade, and this commitment is likely to fructify with the India-U.K. FTA.
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The concept of economies of trade has been expanded under various theories, including Scottish economist and philosopher Adam Smith's absolute advantage theory, and British political economist David Ricardo's comparative advantage theory. While these theories provide systematic approaches to maximising economic growth of States through trade, they fail to examine what comprises a labour force. For them, labour is a static block – fully utilized, never changing, and uniform in all systems.
German philosopher, economist, historian and journalist Karl Marx, whilst criticising these classical theories, noted that they overlook the dynamics of access to the means of production. By allowing for an assessment of discrimination and its existence in the utilization of labour forces by the activity of trade by a country, the direction of theoretical analysis shifted from a more distribution centric set-up to a set up that allows for examination of trade relations by choosing to look at specific social and class set-ups in the society.
As international trade paves the way for more competitive markets, it raises the costs for discrimination against women as countries which do not allow women to fully participate in the workforce, significantly lag behind in the competitive market economy.
At the surface level, trade policies lack an overt gender bias. However, they have differential effects on the lives of men and women, affecting a multitude of outcomes including wages, welfare, quality and quantity of jobs as well as the overall consumption of goods and services.
A report published by the World Trade Organisation in collaboration with the World Bank recently noted that women hold a substantially high number of jobs in the clothing sector – accounting for 60-80 per cent of the global value chain for apparel. Women incidentally also make the maximum number of clothing purchases, as consumers, on behalf of their family members. Despite this, tariffs on garments remain stubbornly high as compared to tariffs on other manufactured goods.
This has an adverse economic impact on female consumers across the world and further prevents women workers in developing countries from broadening export opportunities or transitioning to better jobs in the apparel sector.
Statistics also indicate that women tend to spend a larger share of their income on goods with high tariffs, such as food. This disparity amounts to a 'pink tariff' which disproportionately affects more women in line with their participation in particular sectors of the economy, and removing such tariffs could help women gain 2.5 per cent more real income than men.
“There is a pressing need to examine the factors that are hampering women from accessing markets, and carve out effective and deliberate tools to improve not only the number of women in the market but also the nature of their presence.
Changing patterns of international trade now indicate that trade in services is the next frontier of expansion of international trade. In low and lower middle income countries, the proportion of women in the services sector rose by 13 per cent between 1991 and 2017. However, OECD recently reported that women make up a larger share of workers in sectors that have been particularly hard hit by the pandemic, such as tourism and hospitality. Therefore, improving women's productivity in these sectors could help women gain back a sizable share of economic gains.
In light of this relationship between international trade policy and gender, there is a pressing need to examine the factors that are hampering women from accessing markets, and carve out effective and deliberate tools to improve not only the number of women in the market but also the nature of their presence. Countries such as Sweden and Canada have been forbearers of this change by adopting a feminist policy specific to trade and including chapters specific to trade in their free trade agreements with other countries. The recent U.K.-New Zealand FTA too contains provides for a commitment to gender equality in trade, which has been encapsulated as a separate chapter.
Incorporating a gendered approach within the U.K.-India FTA will allow India to become self-aware of its trade potential by factoring in the untapped energy of women, who predominantly form a part of the informal economy or unpaid work sector at present. Tailoring trade policies in line with the role of women in global markets, together with enabling access of women to sophisticated digital technology, can significantly transform the lives of Indian women.
While these solutions may not be the panacea to bridge the ever-existing gender divide, this is certainly a positive step in the right direction.