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Trade and gender connection

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Trade liberalization has been a significant stimulus to economic growth and prosperity around the world, including here in Canada. However, trade affects people differently, based on a wide range of factors, including gender. In this context, the link between trade and gender is an important issue for trade policy-makers to consider as they negotiate free trade agreements (FTAs).

Incorporating gender perspectives into macroeconomic policy, including trade policy, is key to pursuing inclusive and sustainable economic development and to achieving outcomes that are fairer and more beneficial for all. Studies have shown that women-owned businesses contribute $150 billion to the Canadian economy and employ over 1.5 million people. Advancing women’s equality in Canada could add $150 billion to the GDP by 2026. To ensure that the benefits of free trade can be maximized and widely shared, it is important, therefore, for Canada to consider gender-related issues when developing trade policy and negotiating FTAs.

Canada’s approach to trade and gender is also consistent with the Government of Canada’s broader commitment to advancing gender equality and women’s economic empowerment and complements its efforts to advance gender equality both at home and abroad.

Trade and gender and the impact on workers

Trade can impact women and men differently, whether as workers or entrepreneurs or, more generally, as members of society.

For example, in Canada, women are overrepresented in lower-growth and lower-wage industries, such as retail trade, and in non-tradeable services, such as accommodation and food services. In comparison, men dominate high-trade sectors, such as manufacturing and resource extraction.

Women, in contrast, account for a larger share of the workforce in service and knowledge-based sectors, such as financial services, e-commerce and telecommunications, which are expanding and in which Canada has a comparative advantage.

Therefore, trade policies can have different effects on women and men as workers, depending on the sector in which they are employed and whether that sector is likely to expand or contract as a result of an FTA. Because of this, trade policies need to take gender-related factors into account during FTA assessments and negotiations to understand the risks and opportunities on particular demographics in the economy.

Trade and gender and the impact on business owners

Even though women start businesses at a greater rate than men, women-owned businesses account for less than 16% of small and medium-sized enterprises (SMEs) in Canada and only 11% of all exporters. Education and managerial experience are key determinants of whether SMEs export. While women who own SMEs are generally more educated than their male counterparts, they also tend to have less managerial experience. This suggests that there are barriers to exporting other than education for women-owned SMEs.

Research has identified the following likely primary factors explaining female under-participation in exporting:

Increasing the number of women-owned business exporters is important for a variety of reasons. Evidence shows that SMEs that export, compared to those that don’t, have the following important characteristics:

Therefore, increasing the number of women-owned SMEs that export has important socio-economic benefits for both society in general and the businesses themselves.

Trade and gender and the impact beyond workers and businesses

In addition to having effects on women as workers and as business owners, free trade can impact women in other ways, as members of society.

For instance, trade can impact women and men differently as consumers, particularly with regard to changes in the prices of imported goods. As women typically earn less than men, the reduction in the prices of goods could have, in relative terms, a more positive impact on their lives than on the lives of men in equivalent circumstances, by freeing up a higher percentage of their disposable incomes.

Given that FTAs reduce tariffs on imported products, government revenues may be negatively impacted, which could lead to reductions in government-funded services and programs. This is particularly the case in emerging markets, where the share of government revenue that comes from tariffs can be larger than in more open economies and could affect women more than men because, evidence suggests, women benefit more from these services.

At the same time, however, FTAs also increase economic prosperity and GDP through business development and expansion, job creation and increased exports. Therefore, what governments lose in revenue as the result of FTA tariff reductions may be counterbalanced by increases in tax revenue. 

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