Getting Socially Progressive Trade Right
How Canada ought to approach trade and gender with the Pacific Alliance
Earlier this month, Canada and the Pacific Alliance – founded by Chile, Colombia, Mexico and Peru – completed their second round of negotiations for a free trade deal. The ongoing negotiations for the Canada-Pacific Alliance Free Trade Agreement (FTA) are an opportunity for Canada and the Pacific Alliance to set the gold standard for developing gender-sensitive, socially progressive trade. Canada is positioning itself as a global leader in addressing trade and gender. However, global leadership must look beyond best endeavour, voluntary commitments if trade agreements are to have meaningful impacts on people’s lives and bring about social change.
For Canada, the negotiations with the Pacific Alliance are seen as a bright spot amidst an uncertain trade landscape. Trade multilateralism continues to fade further into the background as the era of pursuing grand trade deals comes to a close and the crown jewel of the multilateral trading system – the WTO’s dispute settlement system – is gutted by the United States’ blockage of replacement appointments to the appellate body. For better or worse plurilateralism and preferential trade agreements are the new normal. Canada’s fate in this altered trade landscape remains uncertain amidst Trump’s hawkish stance on trade and the associated challenges of renegotiating the North American Free Trade Agreement (NAFTA). Against this backdrop, an agreement with the Pacific Alliance is seen as an attractive opportunity for Canada to gain a foothold in regional value chains and cement the pillars of its gender-sensitive, socially progressive trade agenda.
Canada’s leadership on gender and trade
Gender-sensitive trade policy is aimed at supporting women’s economic empowerment, closing gaps in welfare distribution and gender inequalities, and minimizing the adverse impacts of trade liberalization on vulnerable women. Canada is emerging on the global stage as a champion of the trade and gender agenda to which its trading partners and major international organizations are looking for leadership. Canada’s federal government and its Minister of Trade, François-Philippe Champagne, are currently featured on every global stage where gender and trade is a topic. Canada was the architect of the WTO joint declaration on trade and women’s economic empowerment, and played a key role in convening the coalition in support of the declaration at the WTO’s ministerial conference in Buenos Aires in December.
The WTO declaration calls for the removal of barriers to women’s participation in trade and the use of gender-disaggregated data to measure the gender impacts of existing and proposed trade policies. The declaration is purely aspirational and non-binding, as are the gender chapters in all existing FTAs, including the newly modernized Canada-Chile FTA. However, many are hopeful that the declaration signifies a political willingness to link human rights and broader social agendas to the regulation of global trade. The Canada-Pacific Alliance FTA is a prime moment for Canada to cement its political leadership on this agenda.
Meaningfully addressing gender and trade
The new gender chapter in the Canada-Chile FTA was an important first step in mainstreaming the idea that gender equality could be addressed through progressive trade policies. Certain elements of the chapter should be applauded, especially the formal dialogue established between women’s networks in Canada and Chile, and enhanced cooperation on issues of immediate relevance to women. However, voluntary, best endeavour commitments are not enough to bring about meaningful social change and close gaps in gender inequality.
In pursuit of these objectives, we propose Canada undertake four measures. First, civil society and marginalized groups must have opportunities for meaningful participation in the FTA negotiations. Over 160 women’s rights and allied organizations denounced the WTO’s declaration on trade and women’s economic empowerment. This widespread rejection was largely due to the perception that it was pinkwashing, “designed to mask the failures of the WTO and its role in deepening inequality and exploitation.” Better consultation with civil society in the Canada-Pacific Alliance FTA negotiations can help avoid a similar reaction.
Second, Canada, in partnership with the Pacific Alliance, must identify and provide support for those negatively impacted by the agreement. This means minimizing the negative and differential impacts of trade liberalization for women in working environments that are precarious or “hyper-precarious,” low paying or unpaid. These environments include the agricultural and the informal sectors, work inside the home, export processing zones, sweatshops, and industries involving forced labour. Canada can take a major step forward by conducting an ex-ante impact assessment of the FTA with gender-disaggregated data. This assessment should assess the impact of the FTA in all sectors covered by the agreement on women’s employment and earnings, consumption, working conditions, and access to resources including public services. Canada can look to the United Nations Conference on Trade and Development (UNCTAD) Trade and Gender Toolbox for guidance. Only once Canada has undertaken such an assessment can strategies be developed to economically empower women, minimize the negative impact of trade agreements on vulnerable women, and compensate or respond to those adversely affected by trade. Actualizing these goals will require the parties to the FTA to set specific milestones and use appropriate monitoring tools.
Third, there is a range of policies and instruments the negotiating parties can use to help women better participate in international trade. As a starting point, the Canada-Pacific Alliance FTA should improve economic opportunities for women entrepreneurs, particularly women-owned micro, small and medium enterprises (MSMEs) and those involved in e-commerce. For example, the negotiating parties can create policy space and exemptions that allow and support extra procurement or market access opportunities for women-owned MSMEs. Importantly, Canada should engage in capacity-building and knowledge transfer to reduce barriers to women’s economic empowerment.
Finally, Canada must apply a gender lens to the entire agreement, not just the chapter on trade and gender. One option is the inclusion of a strong labour chapter with clear obligations regarding gender equality and related enforcement mechanisms. Canada must also ensure that investor protections do not curtail governments’ duty to protect women’s rights and promote gender equality. Investor protection rules have the potential to make women in precarious situations even more vulnerable because of the dangers of regulatory chill. This is especially the case for the Pacific Alliance countries with large foreign investments by extractive industries where the effects of mining, environmental destruction, and displacement of people falls most heavily on women. It is important that the parties to the FTA develop safeguards for regulatory and human rights protection in the investment chapter and include explicit carve outs that give governments the policy space necessary to pursue positive discrimination in favour of those who are most vulnerable. If Canada is serious about advancing progressive trade then we must bring all of the pillars of this agreement into line with socially progressive and gender-sensitive commitments and ensure there is coherence across the entire agreement with meaningful implementation mechanisms.
In conclusion, the negotiation of the FTA with the Pacific Alliance is an opportunity for Canada to help set the gold standard for developing gender-sensitive, socially progressive trade policies. Much of the world is looking to our leadership on this agenda, a rare and politically valuable opportunity indeed. Nevertheless, we must underscore that setting the gold standard does not mean Canada should attempt to benchmark other countries’ performance on gender and trade. Indeed, such a strategy would be unwise given that Canada has much work to do at home to achieve gender equality and women’s economic empowerment. Rather we are proposing that Canada work in partnership with members of the Pacific Alliance, countries that are also explicitly committed to the trade and gender agenda, to develop a process through which trade policy can best be leveraged to improve the everyday lives of women, particularly those who have been adversely impacted by trade and investment liberalization.
Canada and the Pacific Alliance have a unique opportunity to demonstrate leadership on the trade and gender agenda.
Voluntary, best endeavour commitments are not enough to bring about meaningful social change and close gaps in gender inequality.
A socially progressive, gender-sensitive FTA requires that marginalized groups participate in negotiations meaningfully.
Measures aimed at women’s economic empowerment should target women-owned MSMEs and e-commerce.
Women’s economic empowerment is only part of a gender-sensitive, socially progressive trade agenda. The negative and differential impacts of trade liberalization on those who are most vulnerable must be assessed and addressed through the use of ex ante gender impact assessment of the FTA.
Canada must apply a gender lens to the entire agreement, not just a stand-alone gender chapter, with particular attention to minimizing the adverse impacts of investment activities on human rights.
 Notably, the availability of data for informal and hyper-precarious work is a concern.
Dr Erin Hannah is a Senior Fellow at the CIC. She is also Department Chair and Associate Professor of Political Science at King’s University College at the University of Western Ontario, Canada. She is an international political economist specializing in global governance, trade, sustainable development, poverty and inequality, global civil society, and European Union trade politics. On February 6, 2018 she testified to the House of Commons Standing Committee on International Trade about the Potential Agreement Between Canada and the Pacific Alliance.
Amy Janzwood is a PhD student in Political Science and Environmental Studies at the University of Toronto. She is also a Research Associate at the Munk School’s Environmental Governance Lab. Her research examines how civil society actors interact with state and non-state actors in key areas of the political economy like energy and trade.