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Spanish Olives in the Pits Over U.S.-EU Trade Tensions

olives

Spanish Olives in the Pits Over U.S.-EU Trade Tensions

You’d be hard pressed to find a recipe that doesn’t start with a couple tablespoons of olive oil. Whether you’re roasting pumpkin seeds or dressing a salad, a bottle of EVOO is a must in most kitchen pantries.

Olive oil is a critical ingredient in the Mediterranean diet, known as one of the healthiest diets in history (it’s even been dubbed an “intangible cultural heritage” by UNESCO). Its popularity has been building in the United States since the 1990s and has skyrocketed in recent years. Americans now consume 90 million gallons of “liquid gold” each year. But since we produce just five percent of the amount we consume each year, Americans are dependent on imports from other countries, mainly Spain and Italy, to keep us well stocked.

Ripe olives are a critical ingredient for olive oil. They’ve also been ripe with trade tension over the past two years. Spanish black olives, green olives and olive oil have all been embroiled in two recent trade disputes between the United States and the European Union (EU), resulting in higher tariffs and increased prices of Spanish olives and olive oils for U.S. consumers.

Americans consume 90 million gallons of olive oil annually

The art of olive oil

Autumn marks the start of olive harvesting season across the globe. Olives grow on trees in subtropical climates, turning from green to purple and ultimately black by the end of fall.

To make olive oil, fresh olives are picked or shaken from trees in fields and then rushed to the mill, where they are cleaned and ground into a paste. The paste is stirred with water to release oil droplets, and then spun in a centrifuge which separates the oil from the water, leaving fresh olive oil behind. It takes up to 11 pounds of olives to produce just one liter of olive oil.

The art of olive oil production was perfected by the Romans. Oil from Hispania (modern-day Spain) was the most prized in the Roman Empire. Spain has continued the tradition and is the world’s largest producer of olives and olive oil today. It produces nearly 1.3 million tons of olive oil a year, with 80 percent produced in its southern Andalusia region.

Ground and spun

United States consumption of olive oil has increased 257 percent since the 1990s. In addition to reading about olive oil in your cookbook, you may have also read about it in news headlines recently, due to an ongoing dispute at the World Trade Organization (WTO) involving airplanes.

US consumption of olive oil since 1990

This September the United States won the largest WTO arbitration award ever over illegal EU subsidies to its aircraft industry. The WTO approved the United States to levy up to $7.5 billion a year in retaliatory tariffs on EU products until they remove the subsidies.

Following the WTO ruling, the U.S. Trade Representative (USTR) announced that the U.S. will implement tariffs of 10 percent on civilian aircraft and 25 percent tariffs on a long list of EU products like butter, cheeses and whiskies starting October 18. The list also included green olives and olive oil from France, Germany, Spain and the United Kingdom. Other major European olive oil producers, Italy and Greece, were not included.

This 25 percent tariff is a double whammy for Spanish olive producers, who were hit with U.S. duties on ripe black olive exports last year.

In the pit of the olive dispute

In August 2018, the U.S. Department of Commerce imposed duties of up to 27 percent on Spanish black olive exports as part of an antidumping and countervailing duty case initiated by Californian olive growers.

California growers argued that Spanish black olives were being dumped in the United States market at lower prices than the domestic market in Spain, and that subsidies under the European Common Agriculture Policy (CAP) were allowing Spanish producers to benefit from an unfair advantage. After an investigation, the Department of Commerce and U.S. International Trade Commission agreed with the California growers’ assertions and placed duties on Spanish imports.

In January 2019, the EU took the case to the WTO arguing that the EU’s CAP program is in line with WTO rules and thus the United State may not apply countervailing duties on Spanish olive imports. The EU sees the case as having “far-reaching consequences” since the case effectively challenges the EU’s agricultural model. WTO members have agreed to the EU’s request for a dispute panel to review the U.S. tariffs.

In the meantime, Spanish producers are already feeling the pain. In 2017, before the tariffs were imposed, the United States imported an estimated $67.6 million worth of ripe olives from Spain. In the first two months after the U.S. imposed tariffs, exports fell by 72 percent, according to the Spanish Association of Olive Exporters.

The overall impact of the tariffs is estimated at 350 and 700 million euros over the next five to 10 years, according to a March 2018 European Parliament report. The tariffs could even “potentially lead to the end of Spanish ripe olive exports,” the report says.

To make matters worse for Spanish olive producers, olive oil prices have dropped significantly over the last two years. Reuters reported that tens of thousands of olive producers from southern Spain marched to Madrid in October in protest of low prices and U.S. tariffs.

Where is the olive branch?

Throughout history olive branches have been used to symbolize peace. However, in recent years olives have become a source of argument between the United States and the European Union, and have also been caught in the crosshairs of other trade disputes.

Olives are just one item on a long list of trade issues between the United States and the European Union. The two shelved Transatlantic Trade and Investment Partnership (TTIP) talks in 2016. They restarted bilateral talks in July 2018, where they agreed to work toward zero tariffs, but have since stalled over U.S. demands to include agriculture in the discussions, which the EU has not agreed.

Unfortunately for Spanish olive producers looking for relief from U.S. tariffs, a deal soon does not look likely. And olive oil, unlike wine, does not get better with age.

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Lauren Kyger

 

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.
sand trade

WAVE OF GLOBAL SAND TRADE MAY BE DEPLETING BEACHES

Not just sand castles

It’s September, which officially marks the end of summer. Kids have headed back to school and the sandcastles are long since washed away from the shore. But you’re never really far from the beach. It’s actually all around you since most of the infrastructure in your homes, schools and offices is made of sand.

Sand is a critical component in many of the products we depend on every day: glass, concrete, asphalt, computer chips, and more. We use up to 50 billion tons of it every year, making it the second-largest resource extracted and traded by volume each year, behind water. Despite our necessity for sand, there are no international conventions that specifically regulate the extraction, use and trade of land-based sand. As demand outpaces supply, shortages have even led to illicit trade in sand in some regions of the world.

The many uses of sand

Sand is made of rocks that have eroded over thousands of years. There are many different types of sand and each has its own purpose. Sand from riverbeds is the most desired for construction materials like cement and asphalt. Silica sand from quartz is used for glass, ceramics and electronics. Marine sand is used for land reclamation. The list goes on.

Sand is also pivotal for oil and gas companies for hydraulic fracking. Oil companies mix silica sand (also called “frac sand”) with water and shoot it into shale rocks to break them apart and access the oil and natural gas inside. Companies recently discovered that using more silica sand makes the fracking process more efficient. This has led to increased U.S. consumption of industrial sand and gravel, up 13 percent to 110 million tons consumed in 2018.

Despite increased consumption of sand, the United States is still the world’s top exporter, responsible for nearly 30 percent of the world’s natural sand exports in 2018. Top destinations for U.S. sand exports include Canada, China, Japan and Mexico.

Sand trade top exporters

As cities grow, so does demand for sand

Demand for sand is expected to increase in the coming years, especially in developing countries faced with increasing populations, urbanization and economic growth. Nearly two-thirds of global cement production happens in China and India, reflecting their rapidly urbanizing populations. China alone produced more cement last year than the rest of the world combined.

In the past, sand trade has stayed mostly regional because it’s heavy to transport. But in the coming years, as demand outpaces supply, international trade in sand is forecasted to grow at 5.5 percent each year, according to the United Nations Environment Program (UNEP). Resource-constrained countries will be particularly dependent on sand imports to meet the needs of their rapidly growing urban areas.

Singapore is the world’s largest sand importer, importing an estimated 517 million tons of sand over the last 20 years. Most of this sand came from its Southeast Asian neighbors including Indonesia, Malaysia, Thailand and Cambodia. Singapore has used this sand to increase its land area by 20 percent over the last 40 years, but Singapore’s thirst for sand has led to tensions in the region.

According to the UNEP, sand exports to Singapore were reportedly responsible for the disappearance of 24 Indonesian sand islands. Indonesia formally banned sand exports to Singapore in 2007. In the last two years, Cambodia and Malaysia have also banned sea sand exports citing environmental concerns. Malaysia’s 2018 ban will likely have a big impact on Singapore, since Malaysia was the source for 96 percent of Singapore’s sand imports last year.

Another top importer of sand in the region is the United Arab Emirates, which is surprising given its prime desert location. Desert sand, however, is not useable for construction purposes since desert winds make it too fine and smooth. The UAE is thus dependent on sand imports to continue making roads, buildings and other infrastructure in Dubai. The UAE imported over two million tons of natural sand in 2018, according to the International Trade Centre.

Sand trade top importers

Sand mafias are stealing entire beaches

The growing need for sand has led to illicit sand trade and “sand mafias” in developing and emerging economies across the world. Stories abound of beaches disappearing overnight, rivers drying up and more.

In Morocco, an estimated 10 million cubic meters per year— about half the sand the country uses— is illegally stripped from its coast. The erosion has caused serious issues for the country’s tourism sector, as many buildings are now at risk from beach erosion due to illegal sand mining.

“Sand mafias” are another example of the perils of the illegal sand trade. Due to the increasing price of sand, organized crime surrounding it is also thriving, according to the UNEP. Activists who speak out against these sand mafias that illegally strip river beds and coasts in countries like India have been threatened and even killed, the organization says.

Likes grains in an hourglass

We may take sand for granted, but we’re extracting it far faster than nature can replenish it. Most major rivers across the world have already lost between 50 and 95 percent of their natural sand and gravel, the UNEP says. Matters are made worse by irrigation and hydroelectricity dams, which also reduce the natural amount of sediment flowing in rivers. These factors can cause serious environmental issues, including erosion, pollution, flooding and droughts.

Despite its importance worldwide, sand is one of the least regulated resources today. There are no international conventions regulating the extraction, use or that specifically govern trade in land-based sand. Rules for sand extraction are largely written at the national and regional levels, leading to a variation of standards and different levels of enforcement across the world.

The UNEP is trying to change this by calling on international organizations, national governments, private sector companies, civil society groups and local communities to come together and have a global conversation on sand extraction. As the world’s sand grains continue to slip quickly through the hourglass, the time for that conversation should be sooner rather than later.

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Lauren Kyger

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.

balloons

HELIUM SHORTAGE BURSTING MORE THAN BALLOONS

From birthday parties to baby showers and the Macy’s Thanksgiving Day parade, balloons are a staple when it comes to party decor and celebrations.

Created by British inventor Michael Faraday in 1824, rubber balloons were first manufactured in the United States in 1907. The rubber balloon was followed by the introduction of the twistable balloon animal in the late 1930s and shiny foil balloons in the 1970s.

More recently, air-filled lettered and numbered balloons are making a big splash. While these trendy balloon displays look good on Instagram, there’s another reason party store retailers promote them. They don’t require a critical ingredient the world is running short on: helium.

Helium is far bigger than balloons

We all know helium’s use in balloons. Less well known are helium’s more serious roles in the functioning of an array of products including MRI machines, the processing of semiconductors chips, scuba tanks and even rocket engines. Liquid helium is inert and has the lowest boiling point of all liquid gasses, making it a critical ingredient for scientific experiments. Helium is so important it was listed as one of 35 mineral commodities deemed critical to the economic and national security of the United States.

Heliums many different uses

An elusive gas

Helium is a bit of an enigma. Although it’s the second-most abundant element in the universe, helium is a finite resource on Earth — meaning it is non-renewable and we could run out of it someday. Helium is so light that is rises into space, so we can only recover it when it’s trapped in rocks below the earth’s crust where it mixes with natural gas.

There’s only a tiny amount of helium found concentrated in natural gas fields (anything greater than 0.3 percent is considered good). Helium is extracted as a byproduct during natural gas production where crude helium is separated from natural gas using a cryogenic distillation method and then refined for commercial use. The liquid helium must be transported and shipped around the world in specially-designed International Organization for Standardization (ISO) tankers that are triple-walled and sealed.

Most helium comes from just three places

The helium supply chain is concentrated primarily in three places. Seventy-five percent of the world’s helium comes from Texas, Wyoming and Qatar.

The United States has been the world’s dominant producer of helium for nearly 100 years, starting with the launch of the Federal Helium Reserve (FHR) in 1925. The FHR is in charge of the conservation and sale of federally owned helium. The Bureau of Land Management manages a helium storage reservoir, an enrichment plant and pipeline system in Amarillo, Texas. The Amarillo plant alone has the capacity to provide 40 percent of U.S. domestic helium demand and 30 percent of global helium demand.

But the U.S. government has been gradually selling off its helium supplies in Texas and will fully deplete its reserves by 2021. This plan started in 1996 with the Helium Privatization Act, which mandated that the U.S. government sell off its helium reserves by 2013 because the FHR had stockpiled over one billion cubic meters of helium and was $1.3 billion in debt.

The original deadline was extended by the Helium Stewardship Act of 2013 which President Obama signed to stop the impending helium shortage and continue selling helium from the FHR until 2021. The HSA created an auction system to gradually auction off the FHR’s helium reserves to private bidders. The fifth and final auction was held last year.

Helium history timeline

Global trade in helium

With the U.S. government exiting the helium business, one nation in particular has stepped in to supply the world’s helium: Qatar. Qatar is the world’s second-largest helium producer behind the United States, producing 28 percent of the world’s helium supply in 2018. Other countries that produce helium include Algeria, Australia, Canada, China, Poland and Russia.
Qatar helium supply chain imports

Qatar is the top source for U.S. helium imports, supplying 80 percent of U.S. helium imports last year. But relying on Qatar for helium imports has its downsides. In 2017, the country was embargoed by four of its neighbors – Saudi Arabia, Egypt, Bahrain and the United Arab Emirates. Its helium plants were temporarily shuttered as a result and the world lost access to one-fourth of its helium supply overnight.

Qatar’s helium plants have since come back online but the ongoing embargo calls into question the reliability of Qatar as a stable source of helium imports.

Helium shortage bursting balloons everywhere

With all of the uncertainty in the helium supply chain and so few sources available, pricing has been volatile and shortages over the last ten years have been common.

Party supply stores have taken a hit. Party City recently announced it was planning to close 45 stores this year and that helium shortages were negatively impacting balloon sales. Things may be looking up for the retailer which said they’ve secured a new helium source that should keep them afloat in the gas for the next 2.5 years. However, they do still recommend switching to air-filled party balloon displays due to the global helium shortage.

While your party balloons may be safe for now, the long-term stability of trade in helium is still up in the air. The United States could soon go from helium exporter to importer as FHR reserves deflate. And prices are likely to increase until more helium sources come online in places like Russia, Canada and possibly even Tanzania to meet global demand.

One thing is for sure, while party balloons may have short lifespan before deflating — MRIs, semiconductors and rockets are here to stay. A stable helium supply chain is the only way to keep the party going for our critical medical, scientific and defense fields.

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Lauren Kyger

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.

U.S.-CHINA FDI GOES COLD WHILE VENTURE CAPITAL HEATS UP

Two-way FDI is plummeting

With trade talks between the United States and China running hot and cold, it’s irresistible to get sucked into daily U.S.-China trade war updates with its unexpected tariff announcements. In the bigger picture, the underlying uncertainty caused by ongoing trade tensions between the United States and China is having a large impact, particularly on two-way foreign direct investment (FDI).

So far this year, combined two-way U.S. and Chinese FDI has totaled just $9.9 billion— its lowest six-month value in five years, according to research firm Rhodium Group. At its peak in 2016, combined FDI totaled over $60 billion a year.

The slow start in 2019 is a continuation of a rough year for FDI in 2018, when flows between the United States and China dropped 60 percent year-over-year. Rhodium Group cites a deteriorating political relationship and regulatory intervention as two big reasons for the sharp decrease in investment.

U.S.-China FDI troubles are part of a bigger trend happening across the world, as global foreign investment flows fell to their lowest levels since the financial crisis in 2018, according to UNCTAD. Global FDI flows totaled $1.2 trillion in 2018 – down 20 percent from 2017.

U.S.-China FDI flows over last 30 years

Invested in each other

With trade tensions rising to a fever pitch, it may be hard to remember that American and Chinese companies have invested a lot in each other’s success over the last 30 years – over $420 billion, to be exact. U.S. FDI in Chinese industries adds up to over $275 billion since 1990. While Chinese investment in the United States is almost half of that at $148 billion, according to Rhodium Group’s U.S.-China investment tracker.

U.S. China FDI totals 420 billion

Beyond the sheer volume of money invested, foreign companies bring much more intangible value to the table. In his book, “Developing China: The Remarkable Impact of Foreign Direct Investment,” Michael Enright used an economic impact analysis to better understand the full impact of FDI in China. Enright estimates that foreign companies have contributed as much as one-third of China’s GDP and 27 percent of China’s employment through the accumulated impact of their investments, operations and supply chains in China. American companies alone contributed 4.2 percent of China’s GDP and nearly three percent of Chinese employment in 2014, according to Enright’s analysis.

Enright also pointed out that foreign companies have helped China develop by creating suppliers and distributors, introducing modern technologies, improving business practices, modernizing management training, improving sustainability performance, and helping to shape China’s legal and regulatory systems.

Chinese companies operating in the United States also bring benefits. As the second-fastest growing source of FDI in the United States in 2016, Chinese-owned firms supported nearly 80,000 U.S. jobs, invested nearly $600 million in innovative R&D, and expanded U.S. exports by $4.7 billion in 2016, according to Select USA.

Growing regulatory hurdles

The ongoing U.S.-China trade war is not entirely to blame for the recent dive in FDI. Both nations have stepped up regulatory oversight of foreign investment in recent years. Following the 2016 peak of global outbound investment by Chinese firms, the Chinese government tightened its grip on outbound capital flows, drastically slowing outbound investment by Chinese firms.

In the United States, the Committee on Foreign Investment in the United States (CFIUS) has stepped up investment screening of Chinese FDI, especially in sectors related to national security like infrastructure and information and communications technologies. Rhodium Group estimates $2.5 billion was left on the table in 2018, as Chinese investors abandoned deals in the United States due to unresolved CFIUS concerns.

The U.S. investment landscape may get more complicated for Chinese companies to navigate in the near future, as investors await the implementation of the new Foreign Investment Risk Review Modernization Act (FIRRMA) and Export Control Reform Act (ECRA), both expected to increase U.S. regulatory oversight of foreign investments.

Foreign direct investment by American companies in China has also decreased, but not as drastically as for its Chinese counterparts. Yet, concerns about technology leakage have led to a cooling in U.S. FDI in China’s technology sectors.

FDI cooling, venture capital heating up

At the same time FDI is slowing, venture capital investment is becoming an increasingly bigger piece of the U.S.-China investment puzzle.

Chinese VC investment in the United States has increased dramatically since 2014, with Chinese-owned VC funds contributing an estimated $3.6 billion to U.S. companies over the course of 270 different funding rounds in 2018. This is just a fraction of what U.S.-owned VC firms have spent in China, but an important trend. U.S. VC firms invested a record $19 billion in Chinese start-up companies last year, according to Rhodium Group.

US venture capital firms invested $19 billion in Chinese startups

Firms on both sides of the world have utilized VC investment to invest in companies in sectors where FDI has faced growing regulatory scrutiny. Chinese VC firms have invested in semiconductors, for example, while U.S. VC Firms have invested in sectors limited to foreign firms in China like digital payments and internet start-ups.

Confidence is key

In order for foreign investments to work, companies are dependent on the success and stability of the nations where they choose to invest. Both American and Chinese companies have invested a lot in each other, through decades of foreign direct investment and now growing venture capital investment.

As the U.S.-China trade war rages without an end in sight, it’s worth remembering that ongoing tensions cost more than just tariffs on the products in your shopping cart. They are also a roadblock to long-term investments that bring additional capital, exports and jobs to each other’s economies.

Lauren Kyger

 

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.

SHOULD WOMEN HAVE THEIR OWN PROVISIONS IN FREE TRADE AGREEMENTS?

The topic of women’s participation in international trade has been lightly touched in trade agreements. It shows up in aspirational language in a preamble, through a mention in a chapter on cross-cutting issues like labor, or in a non-binding side agreement accompanying the main text of an agreement. Canada introduced a standalone trade and gender chapter in its updated trade agreement with Chile, and is on a mission to spark a global conversation about whether and how trade and gender issues should be addressed in trade agreements.

As rallying calls of “Trade for All” and economic inclusion reverberate throughout national trade agendas, international forums, and across trade negotiation tables, here’s a closer look at trade and gender issues, how trade agreements of the past have addressed them, and how a new generation of trade and gender chapters aim to change the narrative.

In Developing Countries, Just One In Five Exporting Firms Led by Women

Despite comprising half of the global population, women generate just 37 percent of gross domestic product (GDP) and run only one-third of small and medium-sized enterprises (SMEs). Women participation in the economies of developing countries is typically lower than average, with female business ownership dipping as low as three to six percent in some countries.

Women in developing countries are often concentrated in small and medium-sized enterprises (SMEs) and in export-oriented sectors like apparel, textiles and electronics manufacturing. Women-owned businesses in developing countries are less likely to export than their male counterparts, however. In a 2015 survey of 20 developing countries, the International Trade Centre found that just one in five exporting firms was led by women entrepreneurs.

Exporting is a powerful tool for women to grow their businesses by expanding into new markets. The United States is an example of how exporting can support the success of women-owned businesses. According to the International Trade Centre report, women-owned businesses in the United States that export tend to pay more, are more productive, hire more employees, and record higher than average sales than those who do not export.

U.S. women-owned businesses that export

It’s Not Just a Paperwork Issue

Trading across borders can be challenging for women, especially those who run small-scale firms in developing countries. A recent World Bank article highlights some of the key challenges women traders face – from corruption to harassment, cultural and legal barriers, and even just the amount of time they’re able to dedicate to their businesses while also expected to take care of their families. A female trader in Vietnam said it best, “In Vietnam, women have to do double the work. We manage our business and we take care of our families. We have to arrange time to do cross-border trade.”

Support for empowering women through trade is growing in international forums as of late. In December 2017, 118 members of the World Trade Organization (WTO) endorsed the Buenos Aires Declaration on Trade and Women’s Economic Empowerment. The goal is to increase women’s participation in trade and remove barriers to women’s economic empowerment. Members agreed to investigate ways to better tackle barriers and lack of access to trade financing, as well as collecting better gender-disaggregated economic data.

Member economies of the Asia-Pacific Economic Cooperation Forum have also created an agenda on greater inclusion of women in the regional economy through its Policy Partnership on Women and the Economy, an initiative promoted by the United States during its host year in 2011. The forum is working to address access to capital, access to markets, support for skills development, advance women into leadership roles in business, government, community and political levels, and to ensure that women don’t get left behind in scientific, innovation, and technology sectors. Without addressing these barriers, women would be less apt to take advantage of economic opportunities created by trade agreements.

How Have Trade Agreements Addressed Trade and Gender in the Past?

While the addition of specific chapters on trade and gender in trade agreements is a relatively new approach, the inclusion of gender-related provisions in regional trade agreements is not a recent phenomenon.

According to a 2018 WTO study, the number of gender-related provisions in RTAs has steadily increased since 1957. As of 2018, 74 regional trade agreements contained at least one gender-related provision. These provisions have evolved and changed significantly over the years. The study found that most gender-related provisions were couched in “best endeavor” language and focus on cooperation on gender and gender-related issues, like labor, health and social policy.

RTAs with gender provisions

 

What Do New “Gender Chapters” in Trade Agreements Include?

Chile and Uruguay were the first two countries to introduce a standalone chapter on trade and gender in a bilateral agreement in 2016. This was followed by the trade and gender chapter in the updated Canada-Chile Free Trade Agreement (CCFTA) signed in 2017.

The trade and gender chapter in the CCFTA contains four key components:

Acknowledgement of the importance of incorporating a gender perspective into economic and trade issues to ensure that economic growth is inclusive.

Reaffirmation of commitments to implement UN conventions against gender discrimination.

Cooperative activities and capacity building such as the promotion of access to financing and female entrepreneurship, the development of women’s networks, and greater participation by women in decision-making positions in the public and private sectors.

Establishment of a committee to oversee cooperation activities, review operations of the trade and gender chapter, report on the implementation of activities, and monitor other chapters for their effects on gender.

What Impact Might These Provisions Have?

The modernized CCFTA only recently went into force in February 2019, so it’s too soon to assess what impact the new trade and gender chapter will have for women in both countries. In a policy paper, UNCTAD called the CCFTA trade and gender chapter a “welcome step” but also said it remained a “light component” considering milestones and specific goals were not included, dispute-settlement mechanisms did not apply to the chapter, and harmonization of gender-related legislation between parties was not mandated.

Despite these perceived shortcomings, UNCTAD suggested the trend to include trade and gender chapters in trade agreements was positive: Raising the profile of trade and gender issues in the trade arena would encourage both civil society and the private sector to participate more broadly in the implementation of agreements, enhance cooperation on gender issues between parties to the agreements, and strengthen capacity-building between nations on barriers to women participating in the economy through trade.

Canada’s “Progressive” Push in CPTPP

Canada succeeded in adding trade and gender chapters to some of its recent bilateral agreements, but has faced resistance at the regional level. Although the actual words “comprehensive” and “progressive” were added in front of the TPP title, the CPTPP does not contain a trade and gender chapter. Instead, it contains non-binding language in the preamble reaffirming the importance of gender equality for all CPTPP members. It also includes provisions in the development chapter related to women and economic growth (Article 23.4). While not directly referencing women, chapters related to SMEs and cross-border digital trade should also benefit women by expanding trade in these areas.

Adding a new trade and gender chapter was included among Canada’s core negotiating objectives at the onset of NAFTA renegotiations with the United States and Mexico. This new chapter ultimately did not make the cut in the new United States-Mexico-Canada agreement (USMCA). The new USMCA agreement does contain provisions related to gender, however, including in the labor chapter and the SMEs chapter. This is an improvement over the original NAFTA agreement, which addressed gender and trade in a side accord rather than in the main text of the agreement.

Part of the argument against gender-specific provisions is that any benefits of a trade agreement should be theoretically gender-neutral. For example, provisions that help facilitate trade by small- and medium-sized enterprises should help female business owners the same. But just as there are few gender disaggregated trade data, there’s still much to be learned about how trade reforms benefit women.

More Pieces of the Puzzle

While there’s been considerable buzz around the inclusion of new trade and gender chapters in FTAs, UNCTAD experts say they are really just one piece of the puzzle. In order to yield the best results, trade and gender chapters need to be partnered with gender-related assessments of trade measures prior to the agreement to be most effective later on.

UNCTAD developed a Trade and Gender Toolbox as a framework to help countries evaluate the impact of trade reforms on women and gender inequalities before implementing them. These assessments can help countries rethink planned trade reforms or identify the need for accompanying measures to offset negative impacts on at-risk groups, like women. APEC has taken a pragmatic approach, training women to advance in traditionally male-dominated industries like energy and mining, studying successful women entrepreneurs in the ICT sector, sharing information on investing in women entrepreneurs, and even taking on specific individual goals for increasing women in private and public leadership roles. APEC is also working in critical areas such as education, sexual harassment, health, and social expectations for women as caregivers – areas a trade agreement would not be expected to address.

As more countries take up the mantle of “Trade for All”– not just Canada, but also the European Union, Chile, New Zealand and others — we will continue to see trade and gender chapters in new RTAs evolve and more initiatives to share and implement best policy practices. Yet, it remains to be seen if this “next generation language” in FTAs will make a tangible difference for the hard-working women trading around the world.

Lauren Kyger

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Used with permission.