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Gender and Trade: impacts and implications for financial resources for gender equality

Mariama Williams

Draft Paper for Plenary: Tracking the Money for Gender Equality

Financing Gender Equality for Development and Democracy
8th Women’s Affairs Ministers Meeting (8WAMM)
Kampala, Uganda, 12 June, 2007

SARPN acknowledges the International Gender and Trade Network as the source of this document:
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Executive summary

The financing of gender equality interventions, that is the provision of goods, services and infrastructure, that improve outcomes for women and girls, must be come from three sources: 1) individual household contribution (through payment for services such as health care and education), 2) government direct and sectoral allocations—domestically mobilized resources and 3) externally resources obtained primarily through development cooperation (Grown 2006 and UNDP 2004). These sources of financing are all dependent on national economic performance as well as international and global dynamics in finance and trade.

Achieving gender equality requires that public resources are allocated for programs and projects that directly reduces gender inequality and empower women (‘gender equality interventions’) as well as those projects and programs that are directed at improving social development but which have spillover effect on gender equality (non targeted gender equality interventions’, UN Millennium Task Force and Grown et al 2006). Examples of the former include MDG3 specific programs dedicated to improving educational outcomes for girls and women and gender mainstreaming activities such as gender training and gender focal points in sector ministries. Example of non-targeted gender equality interventions are the construction of feeder and rural roads, health clinics and water servicesi.

Traditionally, the multilateral trading system focused primarily on measures affecting the international trade of goods. Today, however, WTO trade agreements extend to trade in services. They also cover issues which are seen as trade-related, such as intellectual property rights. WTO trade agreements increasingly have implications for many domestic policies, such as environmental regulations, patent protection, and government procurement, so called “behind the border” issues.

The pressure of trade agreements, negotiated bilaterally, regionally and multilaterally has been to erode trade protection in favour of import liberalization on as wide a scope as possible. This has tended to mean the reduction and elimination of trade taxes (tariffs), quotas and licensing fees. But it is also accompanied by measures to expedite the flow of goods and service across border including through custom reform and other aspects of trade facilitation. In terms of export expansion, the mechanisms here are threefold: fiscal incentives (such as tax exemptions, tax holidays), export financing support and trade promotion support. Both import liberalization and export promotion measures have direct and indirect aspects at the meso and micro levels of the economy with implications for poverty reduction as well as targeted and non targeted gender equality interventions.

The direct impacts of trade on financial resources for gender equality operate through the effect of trade on employment, income and prices in the economy. Trade expansion may increase the employment of men and women, yielding increased income to households and more foreign exchange reserves to the government. The removal of tariffs and other trade barriers will directly impact prices of goods and service available in the domestic market. Indirect impacts are those that work their way through to the informal and household sectors through a long chain of causes and effects. For example, when government revenue decrease as a result of declining trade tax receipt, the government may attempt to make up for the shortfall by cutting social spending and or by raising consumption and other excise taxes. These will impact household budgets, access to health care and education.

Trade agreements such as the Agreement on agriculture, the general agreement on trade in services and the Trade related intellectual property agreement also impacts on the availability of food, health care and access to education to individuals and households. Thus these agreements have serious implications for enabling women’s and girls’ capability, functioning and overall sense of personal security. These agreements also have the potential to generate changes in the economy that may either increase or decrease women’s access to economic and social resources such as land, technology and credit.

Ultimately, the challenges of the MTS to gender equality may be in terms of the extent to which trade and trade related measures and mechanisms offset or mitigate leakages of funds from the household, government and foreign aid resources available to finance gender equality interventions, both targeted and non targeted. It would also be important to ascertain the extent to which leakages are countered by injection or inflow of funds into these same financing sources.

This points to further work on specifying the specific channels and pathways through which the MTS influences and impact the financing of gender equality programs. It also should draw greater attention to instituting processes for engendering the various capacity building and aid for trade initiatives so as to stimulate new program areas that will promote gender equality as wells as complement the financing of gender equality interventions.

Specific recommendations therefore are:

  • Each country to develop a framework for engendering its trade related capacity building and Aid for trade programs.

  • Ensure that trade diagnostic studies focusing on promoting trade readiness and market entry include gender analysis and pay specific attention to the needs of women owned SMEs as well as to the sectors in the economy most likely to be adversely impact by changing trade policy.

  • Trade negotiations mandates proactively include gender sensitive framework for each of the sectoral areas under negotiations.

  • Gender sensitive flanking measures to deal with the negative outcomes of trade reform underlying the implementation of trade agreements.

  1. MDG sectors include: education, health, rural development, slum upgrading, water, sanitation and energy. Projects and programs in these areas will work for the achievement of the MDGs as a whole and while not directly aimed at gender equality will synergistic promote gender equality and MDG3. There should also be gender mainstreaming interventions within and across sectors.

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