Trade Preferences and Women’s Economic Empowerment

At the request of UKaid, International Economics Ltd prepared a report highlighting how trade preferences impact gender equality and women’s economic empowerment within developing countries and, within the context of future UK’s Generalised System of Preferences (GSP), provided recommendations of approaches that could lead to transformational positive impacts. Overall, EU’s GSP regulation—the standard GSP, EU GSP+ and Everything but Arms (EBA)— has contributed to the economic to positive economic and social development of its beneficiaries, leading to export diversification.

While export growth creates job opportunities and increased pay for women, increased exports may also lead to exporting firms resorting to cheap female labour as a source of competitive advantage, thereby segregating women and trapping them in low-skilled sectors and low-paying jobs, leading to a deterioration in both wages and working condition. Moreover, while the EU GSP scheme is credited for linking trade preferences to gender dimension which has contributed to the ratification of certain human rights conventions, research shows that the ratified conventions have not always ben applied by the GSP beneficiary countries. Other barriers that hinder women from trading include non-tariff measure (NTMs), Technical Barriers to Trade (TBTs) and Sanitary and Phyto-sanitary (SPS) measures, lack of information and transparency around customs procedures.

For the future UK GSP scheme to effectively promote women’s economic empowerment in its beneficiary countries, the scope of coverage should be expanded to cover agriculture, textile and services sectors, sectors with greater female participation and higher benefits.

Regarding monitoring systems, indicators such as gender gap in unemployment, women in positions of senior management, gender wage gaps or ratio, export revenue increase by percentage for firms owned by women could be tracked to ensure that the GSP beneficiary countries reflect improvements in women economic empowerment. Withdrawal of preferences should be accompanied by effective trade sanctions and additional incentives to help non-compliant beneficiary effectively implement the agreements.

The future UK GSP should also facilitate and ease the burden that rule of origin (RoOs) requirements imply for women, either through easier RoOs or by putting in place training systems, awareness raising, and technical support targeted at women in the beneficiary countries.

Finally, it would be crucial for the UK to merge tariff preferences with access to export training, trade finance and trade support services, targeting women exporters and or sectors with high levels of female participation.

The Report can be downloaded directly from the Foreign, Commonwealth & Development Office – GOV.UK website.


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