About the author: Nimisha Thomas, Assistant Professor & Assistant Dean (Academic Affairs), Jindal Global Law School; Senior Research Fellow, IIFT, Ministry of Commerce & Industry, G.O.I.
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The United Kingdom (the UK) and India launched negotiations for a free trade agreement (FTA) on January 13, 2022. In parallel, the UK’s Department for International Trade published its strategic approach for the negotiations, listing several policy areas in which negotiations may ensue. One such policy area is “Trade and Gender Equality,” which can also be found in the UK’s most recent FTA, the UK-Australia FTA. The inclusion of gender equality in the policy paper points to the UK’s trade-related ambitions which it could also pursue in its future trade negotiations with its prospective trading partners.
The inclusion of gender equality is not entirely new to the world of international trade agreements; articles on gender equality already exist in FTAs between Canada and Chile, the European Union (the EU) and Mexico, and the Comprehensive Economic and Trade Agreement. Gender equality found a voice in international forums as early as 1995 at the Beijing Platform for Action and later on in platforms such as the Group of Seven, the International Labor Organization, and the World Trade Organization (the WTO). Proponents of gender equality in international trade argue that creating policies based on gender perspective would aid in eliminating gender inequalities and increasing trade.
This article analyzes the gender equality provisions in the UK-Australia FTA and their impact on developing and least developed countries (LDCs). While gender equality provisions are well intended, they can hurt developing countries and LDCs. This analysis can help LDCs identify the possible drawbacks of incorporating such provisions while negotiating with developed countries.
Objective of Gender Equality Chapter under the UK-Australia FTA
Chapter 24 of the UK-Australia FTA aims to integrate gender equality in trade and investment to achieve both economic growth and equitable participation through gender-responsive policies. Under Chapter 24, the parties are required to adopt policies with gender perspective in consideration, meaning policies that give men and women equal opportunities and market access. The implication of this approach is wide-reaching in different aspects of trade and investment under the FTA, such as digital trade, SME, labor, and government procurement. Art. 24.1 (3) furthers this goal by committing parties to “advancing the evidence base on women’s economic empowerment and trade,” as highlighted under the WTO Joint Declaration on Trade and Women’s Economic Empowerment, 2017. Additionally, Art. 24.1(6) persuades the parties to share their experiences in designing, implementing, resourcing, and strengthening policies and other initiatives to advance gender equality. The FTA also requires the parties to address the systemic barriers that prevent women, including workers, business owners, and entrepreneurs, from participating equitably in all aspects of trade.
The gender Chapter broadly focuses on dual elements to achieve gender equality. First, it mandates that members should incorporate gender perspectives in data collection, analysis, and monitoring when sharing such information with each other. Second, gender-responsive policies should be integrated into the domestic regulatory system of the parties. The resultant implication of these two objectives is increased market access and the removal of barriers for such access. The following provisions put forward the means to achieve these objectives.
Gender Equality under the FTA
Article 24.3 of the FTA lays down the following provisions for the pursuit of cooperation activities by the parties:
Cooperation Activities: This provision broadly provides for the facilitation of women’s participation in opportunities created by the implementation of the FTA through the means of information sharing, experiences and evidence. These means apply to activities such as improving the access of women to markets, technology and financing; promoting equal opportunities for women in the workplace, including workplace flexibility; improving the access of women and girls to leadership opportunities and education, including in fields in which they are under-represented, such as STEM, insofar as those activities are related to trade. etc.
Data Collection, Analysis and Monitoring: This provision requires the parties to exchange information based on gender perspectives through means such as the collection of sex-disaggregated data, the use of indicators, monitoring and evaluation methodologies, and the analysis of gender statistics related to trade.
Impact of Gender Equality Related Provisions on developing and least developed countries
The FTA stresses increasing participation of women in trade through cooperation activities with a specific focus on formal sectors such as technology, STEM, digital skills, and businesses. It also incorporates collaboration for equitable participation of women in the global supply chain. Such international commitments will certainly prove advantageous for developed countries where there is significant participation of women in business, education, and STEM. Further, it might not be cumbersome for these countries to collect data through expensive methodologies or integrate policies from the gender perspective. However, sex-disaggregated data and gender-responsive commitments as a focal point could emerge as a potential challenge for developing countries and LDCs for four key reasons.
First, such a data collection process is expensive and time consuming considering the huge population of countries such as India, Bangladesh for example, lack of standard data collection format and illiteracy.
Second, the economic empowerment of women is interlinked with factors such as gender biases and gender roles, due to which women are underrepresented in STEM and business sectors in low-income countries. Instead, sectors in which females dominate are those where low-skilled, low-paid, illiterate workers are employed. In such an existing scenario, focusing only on giving market access to foreign competition in the above-mentioned formal sectors would not only increase competition for domestic participants, but also hinder their economic empowerment.
Third, integrating gender-responsive policies would be another hurdle for developing countries and LDCs if these policies are adopted based on data. Developing countries and LDCs often lack harmonization and recognition of data collection methodologies, making data driven policymaking difficult . It is important that parties agree to minimum standards for the recognition of data and that they reach a consensus on data collection and monitoring methods. Developed countries should be sensitive to the impediments faced by developing countries and LDCs in this regard.
Lastly, gender provisions should not be subjected to dispute settlement mechanisms, as they could result in unfair liability for low-income countries. Currently, these provisions are administered in a non-binding manner through institutional mechanisms with the facilitation of consultations and discussions among the parties in case of inconsistencies with the textual commitments. However, there are cross-cutting references of gender-related provisions throughout the agreement under separate chapters, such as digital trade and services, and some of these chapters are subject to strong dispute settlement mechanisms like arbitration. Ultimately, the effect of incorporating gender-related provisions in investment agreements places de facto onerous obligations on low-income countries due to the reasons mentioned above.
Conclusion
The objective of achieving women’s economic empowerment through the insertion of gender-related provisions in investment treaties is certainly an applaudable approach by the international community in bringing the issue to the fore. However, placing onerous liability on developing countries and LDCs via evidence-based data collection methodologies and seeking market access in these countries by overlooking the impediments of women’s participation in the trade in these countries defies the principle of equity. Further, the insertion of cross-cutting references of these provisions in chapters that consist of binding commitments again impedes the original agenda of women’s economic empowerment as far as low-income countries are concerned. While negotiating such commitments, the developed nations should be sensitive to the socioeconomic conditions of the developing countries and LDCs.
Summing up, this article proposes that firstly, the parties should only engage in persuasive commitments recognizing the importance of gender in trade through non-binding international commitments initially. It would assist in sensitizing the low-income countries about the impact of women in trade and allow them to gradually integrate gender-responsive policies in their regulatory framework. Secondly, incorporating provisions related to funding opportunities for elevating the status of women in low-income countries might change the social approach towards women. Thirdly, incorporating sectors that are also relevant to developing countries and LDCs would progressively enable greater participation of women in trade. Fourthly, providing transition periods for the adoption of gender perspectives in data collection and policymaking would also reap positive results. Lastly, avoiding any cross-cutting references of trade-related chapters would also encourage developing countries and LDCs to advance the cause of women’s economic empowerment without concerns of sanctions. Therefore, there should be a balance of interests of the developing countries and the LDCs on one side and the developed countries on the other for comprehensively advancing the cause of women’s empowerment.
[The opinions expressed in this publication are those of the author and do not purport to reflect the views of the organizations the author is associated with.]