Leveraging Trade to Empower Women in the Global Economy

Image By: World Trade Organization

In the evolving tapestry of global economics, trade emerges not only as a conduit for goods and services but as a pivotal force for social transformation. The assertion by Ngozi Okonjo-Iweala, the pioneering first woman and first African to helm the World Trade Organization (WTO), encapsulates a profound truth: "Investing in women is smart economics and investing in girls, catching them upstream, is even smarter economics." This statement underscores the untapped potential of integrating women into the global trading system not only as a moral imperative but as a strategic economic investment. Trade has a multifaceted role which includes dismantling barriers for women in the global economy, advocating for a shift towards gender-inclusive trade policies that can catalyze broader socio-economic empowerment. However, the global economic arena, while full of opportunities, presents great challenges for women. 

A recent World Bank Paper insists that a targeted inclusion of women in the workforce would advance economic growth and trade outcomes by 26 percent of the global GDP by 2025. The transformative power of trade lies in its capacity to open doors to new markets, create job opportunities, and foster a conducive environment for female-led entrepreneurship. As the Director-General of the International Monetary Fund (IMF) declares “The key takeaway is clear: the opportunity costs of gender inequality in the labour market — the economic gains we choose to forego by allowing those inequalities to persist — are immense, they are in the same ballpark as the economic damage from the COVID-19 pandemic”. From entrenched gender biases and limited access to financial resources to systemic barriers in education and workforce participation, women's economic potential is often suppressed. The realm of international trade is no exception, where women entrepreneurs and workers face heightened obstacles, including discriminatory regulations and a lack of access to global markets. These challenges underscore the critical need for a concerted effort to integrate gender perspectives into the fabric of global trade practices.

There are multiple levels to which women face barriers in international trade. For instance, in developing countries, women-owned businesses are often smaller and concentrated in sectors like textiles and handicrafts, which are subject to higher tariffs. This situation, coupled with thinner profit margins, makes tariffs more burdensome for women entrepreneurs. Additionally, women generally have less access to financial resources and information about international trade regulations, complicating their navigation through complex customs procedures. The lack of representation in trade networks and limited access to advocacy means women are less informed about managing restrictions. Moreover, societal constraints, such as greater domestic responsibilities and legal barriers, further restrict women's ability to engage in international trade. These hurdles, including time poverty due to disproportionate caregiving responsibilities, amplify the challenges faced by women in accessing global markets, underscoring the need for targeted support and policy interventions to mitigate these barriers.

Strategies to leverage this potential include enhancing market access for women-owned businesses by simplifying entry into international markets through trade agreements that minimize barriers like tariffs and complex customs procedures. Additionally, developing tailored trade assistance programs aimed at building skills and capacities can prepare women to compete effectively in global markets by improving their digital literacy, financial management, and business skills. Reforming legal and regulatory frameworks to eliminate gender discrimination is also crucial, which involves ensuring women have equal property rights, access to credit, and the removal of legal obstacles to their economic participation. Furthermore, policies to empower women, and change “gender norms” such as contraception and “financial education” can allow them to gain independence and join the labour force or start their own business. In addition, encouraging women's involvement in trade negotiations and decision-making positions can ensure that trade policies are more inclusive and address women's specific needs, leading to more equitable trade agreements.

Real-world instances across the globe exhibit the positive effects of integrating women into the trade ecosystem. Countries that have embraced policies supporting women's access to international markets have witnessed notable enhancements in job creation and overall economic progress. Rwanda serves as a compelling example of the positive impacts that result from integrating women into the trade ecosystem and supporting their access to international markets. Following the 1994 genocide, Rwanda implemented a series of reforms aimed at empowering women and ensuring their active participation in the economy and society at large.

One of the key strategies was to improve women's access to finance and entrepreneurial training. The country has seen a surge in women-led enterprises across various sectors, from agriculture to textiles and handicrafts, which are significant for export. Rwanda's commitment to gender equality is also evident in its legal reforms, which have provided women with equal rights to own property and obtain credit. This legal framework has been crucial in ensuring that women can invest in their businesses and participate more fully in the trade ecosystem. Furthermore, Rwanda's efforts to integrate women into the trade ecosystem have been supported by international partnerships and programs that focus on enhancing women's trade capacities. For example, initiatives like the African Growth and Opportunity Act (AGOA) have provided Rwandan women entrepreneurs with opportunities to access the U.S. market, significantly boosting the country's textile and garment industry. The result of these concerted efforts has been a notable increase in job creation and economic vitality within Rwanda. Women's participation in the workforce and their contributions to the economy have not only elevated the status of women in Rwandan society but have also spurred community-wide benefits, contributing to Rwanda's remarkable economic recovery and growth over the past two decades. Rwanda's experience underscores the transformative potential of policies and initiatives that support women's inclusion in the trade ecosystem, highlighting how such efforts can lead to broader socio-economic benefits for the entire community.

Therefore, echoing the insights of Ngozi Okonjo-Iweala, trade is a formidable lever for ending the marginalization of women in the global economy. The strategic investment in women paves the way for a more inclusive, equitable, and prosperous global society. The onus lies on the international community to recognize and act upon the immense potential of gender-inclusive trade policies in fostering sustainable development and gender parity. By reimagining trade as a vehicle for women's empowerment, we can create a future where economic opportunities are accessible to all, irrespective of gender.