Presently, FTAs or any other trade policy instruments are gender ignorant

In June 2007 the EU and India entered into negotiations for a bilateral Free Trade Agreement. An Agreement of this magnitude will have a massive impact on the security of substantial nourishment, the livelihood of a great number of people as well as with regard to the field of competences of Indian decision makers. There have been also been investigations undertaken proving that where poverty is higher and developmental achievements are lower women suffer disproportionately more. The entry point of the Heinrich-Böll-Foundation into its Gender and Trade program in India is, therefore, the examination of what impact the ongoing EU-Indo FTA will have on gender.

Two interviews raising questions of gender justice in trade have been conducted to raise public awareness and to provide a small insight into the otherwise quite shut negotiations. The following is the second of the two interviews with Dr Shahid Ahmed, Senior Economist, United Nations Conference on Trade and Development (UNCTAD) – India.

Presently, FTAs or any other trade policy instruments are gender ignorant.

On Gender and Trade and the impact of EU-India Free Trade Agreement on Gender (Views are personal).

Q.1. - What are your views on the gender impact of bilateral trade agreements? How far do you think is the gender aspect currently taken into consideration within the negotiations?

A: Let me say that, in the existing social structure, trade policies are neither gender neutral nor gender blind – they need to be sensitised to enhance gains for women. Trade led growth may not be poverty alleviating until the gender dimension of international trade was not taken duly into account. Women and poor people may cluster in the low-skilled end of employment and in the lower end of the income scale. Presently, FTAs or any other trade policy instruments are gender ignorant. India is currently negotiating a number of FTAs like the Indo-Asian, the Indo-EU, the Indo-US or the Indo-Japan and to my understanding gender dimensions have not been considered separately in any FTA negotiation so far. But this is not just the case with India; this holds basically true for most of the trade agreements also in other countries. So the question arises, how these FTAs affect gender dimensions. Obviously there is no single answer to that. It mainly depends on your partner country or countries (FTA between developed countries or between developing and developed countries) and terms of reference of FTA engagements. As an example, an FTA between the EU and India and the EU and a least developed country in Africa has a different gender dimension. However, it is very difficult to generalise in the context of the whole economy. You cannot say that a particular FTA has a positive or negative impact on the economy, but it is better to discuss on which sector it has somehow a positive or somehow a negative effect.

Q.2. - If you say that the effect of an FTA always depends on the partner, it would be interesting to know, in what way the EU, as India’s partner, has an effect on the gender issue.

A: To the best of my knowledge and understanding there are some discussions held by organisations in the European Union such as the WIDE (Women in development Europe) network and the APRODEV (Association of World Council of Churches Related Development Organisations in Europe) among others. Concerning the India-EU FTA there is no negotiation on the gender dimensions as far as I know. Actually there are two problems: One is that there is a lack of understanding at the level of the policy makers and academicians or particularly those, who are the mainstream economists and specialists doing policy research. They treat trade as gender neutral. If they treat it as gender neutral, then there is no question of considering gender dimensions effectively within trade.. Another problem is the lack of information. There is no or very little gender segregated data, through which you could identify the exact or the possible effects of a particular trade policy instrument. In India, nearly 92% of the people are employed in the informal sector. And if you compare the male-female ratio you will see that about 95% of the women compared to 90% of the men are employed in the informal sector. The problem is that there is no way to get information from secondary sources on the informal sector. We cannot tell how many women are employed in let’s say in the textiles sector, food processing sector, or any other sector. What are their wages? Are there wage differences? Of course, there are some studies based on primary data, some of which were undertaken by the UNCTAD India. In the last two-three years, the Ministry of Commerce and Industry also has instituted some research studies for trade and gender. But so far there is a lack of specific secondary information from which you could identify the effects of trade on gender. The lack of data is not a problem specific to India only, this is a common problem. Even in the developed countries it is very difficult to face this issue, because the gender segregated data is rarely available and unless you don’t have gender segregated information it is very difficult to sensitise people. Moreover, it is not only about the policy makers, we need to make aware and sensitise women who are basically stakeholders. Most of them are not aware and not conscious of the possible outcome of the trade liberalisation and the globalisation process, particularly those who are affected. They are working at the lower end of the production cycle and you also have to sensitise them, you have to work at the ground level.

Q.3. - On the one hand, you say that the South is likely to benefit from trade expansion, on the other hand, you mention that the casualisation of work has increased – what impact do these two developments have on women and their working conditions?

A: Existing research indicates that the employment effects of trade have been most favourable to women in countries that specialise in the production of labour-intensive manufactures. The South is expected to be positively affected as the South is mainly specialised in labour intensive products, in which a large chunk of women is employed. Within the South, trade liberalisation also has different impacts on different economies and on different groups within economies. What is meant by this is that trade liberalisation expands some activities and contracts others. Gains and costs to groups depend to a large extent on what their economic activities are based upon. However, not all regions of the South have been affected in the same way, but generally working conditions are poor. One thing is that the quality of employment, which the trade liberalisation has generated, is not of high quality for many women. Generally, employment is of casual nature. However, in counterfactual sense, any increase in women employment in developing countries is going to benefit women as their marginal cost is low in the economic sense. If they earn something at the cost of nothing, I call it a beneficial employment, even if it is an employment of casual nature. So both processes are going on: casualisation as well as more employment. Another problem is the low wages, which are caused by “Over Crowding” in the economies of the South. A large number of women are competing for a particular type of work, thus, there will be low wages. UNCTAD India has undertaken studies for ten sectors in India like tea, coffee, plantation, the textile sector, the marine sectors, etc. These studies indicate a wage gap of around 30% between male and female workers because most of the women are specialised in and clustered around only a few activities, which we call traditional women oriented activities.

Q.4. - When the negotiators pronounce that livelihoods are always taken into account, what do they mean with that? How are they taken into account exactly?

A: Obviously each country considers, while negotiating, segments, which have a possibly more negative effect on the poor people in a country, both on men and women They try to identify sectors, which are expected to be more negatively affected due to a trade policy outcome, but that is not gender specific, it is in general. Actually, there is a little information available on gender aspects. There is a need to take conscious efforts on the part of the government to change this scenario. As I told you earlier, this is not specific to India; it is the case in most countries. At least as I am aware of, in South Asia like Pakistan, Nepal, India, Bangladesh, and even in developed countries, the required information is missing. The point is that if you think that all trade policy is gender neutral then you don’t need gender segregated data, if you think that, yes, there are gender dimensions of any trade policy or any other economic policies then you need actually the gender segregated data. Unless you have gender segregated information you cannot say that you are considering gender focused livelihood concerns in any FTA.

Q.5. - If you say that it is important to provide specific support to women-oriented sectors in trade agreements, what kind of support do you mean in particular?

A: First of all, it would be necessary to have a common definition of gender sensitive products, which is mutually agreed by comity of nations. If you have an agreed method/definition you can identify appropriate sectors or some policy space needs to be given for an individual nation to identify its gender sensitive products. For instance, you can say that the textile or the plantation sector is gender sensitive in India. Why do we conclude so? Either it should be identified at the WTO level or each country must identify gender sensitive sector individually, but there must be some common agreed way. The next, “supportive” step would be that developed countries could extend or deepen its concessions under the GSP (Generalized System of Preferences) to a particular product, which is identified as a gender sensitive product, and it should be exempted from the WTO MFNrule. For instance, the United States apply 6% applied duty on imports of carpets and other textile floor coverings from India, Japan and other WTO members. Those 6% applied duty will be common to all WTO member countries as a MFN rule, so that you cannot discriminate any other exporting country. Thus, a big support to women-oriented sectors would be to exempt the ‘Gender Sensitive Products’ from MFN rule in case developed countries grant special concessions to gender sensitive products. Suppose the US gives a special concession – say a zero duty rate- to India’s carpets and other textile floor coverings to promote women’s employment, under MFN rule the US should give that to everybody. But if it is agreed that under the GSP it will be exempted from MFN, the US or the EU could do this for India, Bangladesh, and other developing countries. Those who are working in that field- different NGOs, multilateral organisations like UNCTAD, are demanding this “system”, but till today there is nothing like that in the WTO. Necessary policy space could be provided to developing countries in trade agreements to provide specific support to women-oriented sectors. Gender criteria should be introduced in international trade agreements allowing and promoting positive measures under Aid for Trade, development support and/or mitigating and accompanying stipulations that are designed in a way that explicitly addresses gender-specific measures. These include, for example, provisions that promote women entrepreneurs, regulations that encourage supply capacity-building, and control over productive resources. Another problem in India is that of the “middle-man”, something that needs to be changed at the domestic policy front. It is desirable that the government promotes direct links between the exporter and the actual manufacturers. But, in practice, orders are put through a so-called middle-man. The middle-man will deal with this order and in the end the actual workers are getting a very minimum rate of return and the middle-man is gaining a lot. So there is work to be done on the ground level. Women should create either self-help groups or women associations and a network between them and the exporters, to get rid of the middle-man that they can get the maximum benefit out of export gains. The effect could be much more positive if there would be a direct link between the women associations or NGOs and the exporter.

Q.6. - Your suggestion is to define Gender Sensitive Products like textiles, agricultural products etc. How should they be treated in FTAs? Is the “Sensitive List”, which every FTA contains, covering these products?

A: To define ‘gender sensitive products’, the criteria to define may be the share of womens employment, nature of women employment and skill assessment of workers for alternative employment to begin with. As far as the sensitive list for the FTA or the WTO negotiations is concerned, each government prepares “Sensitive Lists of Products” from their perspective and needs while negotiating. However, it is difficult to say that sensitive list products also include gender sensitive items. Of course, there might be some products on the list, which are gender sensitive, but before you can put specifically “Gender Sensitive Products” on that list, you need to define the criteria and you need to have gender segregated data, which are, as I said before, not available. As far as disclosing the content of the sensitive list, the method of identifying sensitive products and the organisations involved in the identification process of a sensitive list, I will not comment. . It is the Ministry of Commerce and Industry, and other Ministries who represent India’s interest, so what they think is appropriate from their perspective they put on that list. If they seek inputs from the UNCTAD India office, we also provide our inputs, depending on what they are asking for. We give our opinion, but accepting or rejecting that opinion is again their choice.

Q.7. - There will be a position paper issued by the Government of India regarding Gender and Trade. Do you know anything about it?

A: To the best of my knowledge and understanding there is no position paper so far. But this is again a question, which the Government could answer better than me. It is again up to them to have any paper or not, the right person to respond is somebody from the Ministry.

Q.8. - I read in one of you presentations that the end objective of trade agreements should not be trade but rather development. Could you elaborate on that in relation to the EU-Indo FTA?

A: The issue is that most of the FTAs and WTO negotiations focus on increasing trade flows among countries, without considering its development aspects in detail. There is nothing sacrosanct that increasing trade has always a positive effect in all circumstances, particularly people, who are in the lower end of the production process. In the WTO there is a trade policy review mechanism for each country depending on their trade share in the overall world trade. But this review is about whether the country’s domestic trade policy is consistent with the WTO rules or not. What I am referring to is the detailed impact assessment of FTAs and WTO negotiation outcomes on poor people, including gender specific dimensions. Comprehensive assessments should be part of the trade policy review mechanism. The problem is that you cannot capture the end effect of trade, so what you would have to do is to analyse all FTAs and WTO negotiations for the last 15 years and to assess what the possible gender effect was and will be. In UNCTAD India sponsored studies, which I coordinated, reveal that each sector has a different gender specific effect. For example, in the tea plantation, the decline in women’s employment is more than in men’s employment, but if you look at the tufted carpet (textile sector) we can see that there is a bigger gain in women’s employment compared to men. So there are different impacts and to assess the end effect of trade you have to look sector wise and respond accordingly. Policy makers have to make a long-term strategy for the future. They have to generate a database and undertake ground level research. Presently, the focus is on trade flows and not on development. It is equally applicable to all FTAs and probably the FTA between India and the EU may not be an exception to that.

Dr. Shahid Ahmed, Senior Economist, United Nations Conference on Trade and Development (UNCTAD) - India