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Spearheading Gender Equality in the Digital Economy: UNCTAD Welcomes New Advocates

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Spearheading Gender Equality in the Digital Economy: UNCTAD Welcomes New Advocates

The United Nations Conference on Trade and Development (UNCTAD) is ushering in a new era of gender inclusivity in the digital realm with the appointment of four dynamic advocates. This move revitalizes efforts to ensure that women’s voices are at the forefront of shaping policies that drive a digital economy benefiting all.

Read also: Global Trade Magazine Calls for Nominations for Annual Women in Logistics Feature

With the 2024-2025 cohort comprising six distinguished women entrepreneurs, UNCTAD underscores the crucial role of women in fostering innovation, job creation, and economic progress. Originating from diverse regions across Africa, Asia, and Latin America, these entrepreneurs are trailblazers in the tech industry, dedicated to championing women’s empowerment through e-commerce and digital innovation.

Secretary-General Rebeca Grynspan, in her announcement on 6th May in Geneva, emphasized the pivotal role of women digital entrepreneurs in propelling economic growth. This cohort includes four new advocates: Vèna Arielle Ahouansou of Benin, Hilda Moraa of Kenya, Angeline Tham of the Philippines, and Ajaita Shah of India. They join two existing advocates, Yasmine Abdel Karim of Egypt, and Ana Maria Sandoval of Colombia, amplifying the voices advocating for gender inclusivity in the digital economy.

Under the umbrella of the “eTrade for Women” initiative, these advocates will play a pivotal role in shaping policies aimed at promoting gender equality in the digital age. The program, a cornerstone of UNCTAD’s e-commerce and digital economy agenda, receives significant support from leading funding contributors such as Australia, Germany, the Kingdom of the Netherlands, Sweden, and Switzerland.

Let’s meet the new advocates:

– Vèna Arielle Ahouansou, co-founder and CEO of Kea Medicals (Cotonou, Benin), utilizes technology to enhance healthcare services in French-speaking Africa.
– Hilda Moraa, founder and CEO of Pezesha (Nairobi, Kenya), pioneers financial solutions to empower women entrepreneurs across English-speaking Africa.
– Angeline Tham, co-founder and CEO of Angkas (Manila, the Philippines), leverages digital technologies to create a safer and more inclusive transportation sector in Southeast Asia and the Pacific.
– Ajaita Shah, co-founder and CEO of Frontier Markets (Jaipur, India), bridges the digital divide for rural women in South Asia through her e-commerce platform.

The advocates’ mandate is to address the persisting gender gap in the digital economy, crucial for sustainable and inclusive development. Shamika N. Sirimanne, director of technology and logistics at UNCTAD, highlights their role in calling attention to the challenges women face in accessing finance, technology, and markets, shaping policies for gender equality in the digital age.

Women’s leadership in the digital economy takes center stage at the 7th meeting of the Intergovernmental Group of Experts on E-commerce and the Digital Economy in Geneva. Ana Maria Sandoval, advocate for Latin America and the Caribbean, stresses the importance of enabling women in developing countries to fully participate in and benefit from the digital boom.

As these advocates step into their roles, they symbolize a commitment to unlocking the full potential of women entrepreneurs in driving inclusive digital growth. Through their leadership and advocacy, UNCTAD is paving the way for a more equitable and prosperous digital future.

global trade economic development

Navigating Global Investment Challenges: UNCTAD’s Call for Equitable Development Strategies

Amidst evolving global economic landscapes, the United Nations Conference on Trade and Development (UNCTAD) has unveiled a comprehensive report titled “Global economic fracturing and shifting investment patterns.” This report delves into the intricate dynamics of global foreign direct investment (FDI) and underscores the imperative for innovative investment strategies that prioritize inclusivity and sustainability.

The report delineates ten transformative shifts in investment priorities across industries and regions, elucidating how trends in global value chains and geopolitical dynamics have reshaped investment patterns. Moreover, it emphasizes the critical need to integrate sustainability and development goals into investment strategies to foster inclusive and sustainable economic growth.

Diverging Trends in Global Foreign Investments

UNCTAD identifies three diverging trends in global foreign investments that have emerged over the past two decades:

1. Disjunction Between FDI Growth and Traditional Economic Indicators: While global GDP and trade have experienced consistent growth, FDI growth has stagnated amidst rising protectionism and geopolitical tensions. This disjunction signals a significant shift in the global economic landscape.

economic developemnt global trade
SOURCE: UNCTAD

2. Growing Emphasis on Services Sector: There is a notable shift in investment preferences towards the services sector, with cross-border greenfield projects increasingly favoring services over manufacturing. This trend has implications for global production dynamics and technology adoption.

economic developemnt global trade
SOURCE: UNCTAD

3. China’s Evolving Role in Global FDI: China’s reduced role as a recipient country for FDI has reshaped the geography of global investment. Despite diminished enthusiasm for new investments in China, the country remains a dominant player in global manufacturing and trade.

Transition from Divergence to Fracturing

Recent global conflicts and crises have catalyzed a transition from divergence to fracturing in global investment patterns. Geopolitical factors now exert a greater influence on investment decisions, complicating traditional approaches to investment promotion and hindering FDI-based development.

Sustainability Push and Implications for Developing Nations

While there has been progress towards sustainability, the impacts on developing nations are nuanced. The expansion of FDI into environmental technologies presents new opportunities but exacerbates disparities, particularly for smaller and less developed countries. The narrowing focus of FDI exacerbates economic fragility and underscores the need for equitable development strategies.

Call to Bridge Investment Gaps

UNCTAD advocates for immediate action to bridge investment disparities across sectors and regions. Policy recommendations include revising economic development strategies, promoting investment in Sustainable Development Goals, and fostering collaboration among global stakeholders to create a more open and equitable global investment environment.

In conclusion, UNCTAD’s report underscores the urgency of addressing global investment challenges and calls for concerted efforts to ensure that the benefits of investment are distributed equitably and aligned with sustainable development objectives.

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Charting a Course for Sustainable Global Trade: UNCTAD’s Inaugural Global Supply Chain Forum

Amidst a backdrop of unprecedented global challenges, the inaugural Global Supply Chain Forum (GSCF) 2024 promises to be a pivotal gathering, convening leaders and experts to navigate the evolving landscape of international trade and logistics. Organized by the United Nations Conference on Trade and Development (UNCTAD) in collaboration with the Government of Barbados, this landmark event, scheduled for May 21-24, 2024, aims to shape the future of global trade in a rapidly changing world.

In recent years, the global trade arena has grappled with significant disruptions, ranging from the Covid-19 pandemic to the impacts of climate change and geopolitical tensions. These challenges have not only stress-tested global supply chains but have also underscored the critical need for resilience and sustainability, particularly for developing countries.

At the heart of the forum lies an innovation challenge, designed to inspire solutions that foster greener, more efficient, and resilient global production and distribution networks.

Focus on Resilience and Sustainability

GSCF 2024 will shine a spotlight on the indispensable role of global supply chains in driving economic growth, fostering job creation, and advancing poverty reduction, in alignment with the 2030 Agenda for Sustainable Development.

This forum is part of a broader series of events commemorating 60 years since the establishment of UNCTAD, a stalwart advocate for the Global South. Recognizing the disproportionate impact of supply chain disruptions on vulnerable economies, particularly Small Island Developing States (SIDS) and Landlocked Developing Countries (LLDCs), the forum will delve into strategies for bolstering resilience and sustainability across global supply chains. These strategies encompass everything from trade facilitation reforms to the integration of digital innovations.

Research conducted by UNCTAD reveals that the Covid-induced supply chain crisis led to a 1.5 percent increase in global consumer price levels, primarily driven by elevated maritime transport costs. The impact was even more pronounced in SIDS, where consumer price inflation surged by an additional 7.5 percent.

Strengthening the Backbone of Global Trade: Seaports

Seaports serve as vital gateways for trade, facilitating over 80 percent of global merchandise exchange. The forum will explore avenues for enhancing the resilience of seaports, particularly in vulnerable coastal nations. Additionally, digital solutions, including blockchain technology, will be championed to mitigate emerging risks and safeguard the sustainability of global supply chains amidst the rising tide of e-commerce and cyber threats.

Global Collaboration and Bridging Gaps

GSCF 2024 aims to foster collaboration among stakeholders worldwide, bringing together policymakers, industry leaders, and international organizations such as the International Labour Organization (ILO), the International Maritime Organization (IMO), and the UN Industrial Development Organization (UNIDO). With more than 500 participants from approximately 100 countries expected to attend, and over 100 entities already onboard as partner organizations, the forum promises a rich tapestry of perspectives and insights.

Government ministers of transport will converge to deliberate on a joint declaration, which will feed into forthcoming discussions at the UN’s 4th International Conference on Small Island Developing States, scheduled for late May in Antigua and Barbuda.

In Conclusion

The Global Supply Chain Forum 2024 represents a pivotal moment for charting a course towards sustainable and resilient global trade. By fostering collaboration, innovation, and practical solutions, this forum endeavors to pave the way for a future where trade serves as a catalyst for inclusive growth and shared prosperity.

terminal operations global trade shipping trade red sea houthi Hapag-Lloyd shipping leasing

UNCTAD: Global Trade Expected to Rebound in 2024 Amid Geopolitical Uncertainties

The United Nations Conference on Trade and Development (UNCTAD) forecasts a rebound in global trade, expecting it to hover around 3% this year after experiencing a 3% contraction in the previous year. Despite persistent geopolitical uncertainties, this optimistic outlook is attributed to rising demand for container shipping in recent months.

While logistical challenges such as disruptions in key shipping routes like the Red Sea, Black Sea, and Panama Canal remain a concern, the increasing demand for container shipping offers a glimmer of hope. Some East Asian and Latin American economies stand to benefit by integrating into supply chains affected by geopolitical tensions.

The report highlights the shifting landscape of trade policies, driven by domestic priorities and climate commitments. The adoption of trade restrictive measures and inward-looking industrial policies may impact international trade growth.

Looking ahead to 2024, projections are more positive, with moderating global inflation and improving economic growth forecasts indicating a reversal of downward trends. Additionally, the growing demand for environmental goods is expected to stimulate trade. However, uncertainties persist, underscoring the need for caution.

In 2023, most major economies, except Russia, experienced a decline in merchandise trade. Goods trade saw a 5% dip compared to 2022, with Russia particularly affected by a sharp decline in export levels tied to energy markets. However, there are signs of recovery, with China and India witnessing quarter-on-quarter growth in merchandise trade.

India, for instance, saw a 5% year-on-year growth in merchandise exports in the last quarter of 2023. However, on an annual basis, the country experienced a 6% contraction in export growth. These dynamics underscore the complex interplay of factors influencing global trade in the face of evolving geopolitical and economic landscapes.

World Leaders Call for Stronger Multilateral Solutions to Debt Crisis

World Leaders Call for Stronger Multilateral Solutions to Debt Crisis

Amid cascading crisis and inequalities, developing countries face major challenges with a complex creditor base as borrowing burdens increase and risks of debt distress grow.

Stronger multilateral solutions are urgently needed to tackle the debt crisis facing developing countries, UNCTAD Secretary-General Rebeca Grynspan said at the opening of the organization’s 13th Debt Management Conference.

The event, which runs from 5 to 7 December in Geneva and online, takes place as a wave of global crises has led many developing countries to take on more debt to address the needs of their populations.

Government debt levels as a share of GDP increased in over 100 developing countries between 2019 and 2021. Excluding China, this increase is estimated at about $2 trillion.

“This has not happened because of the bad behavior of one country. This has happened because of systemic shocks that have hit many countries at the same time,” Ms. Grynspan said. Read her full statement.

With interest rates rising sharply, the debt crisis is putting enormous strain on public finances, especially in developing countries that need to invest in education, health care, their economies and adapting to climate change.

“Almost all developing countries have been left to face an impossible trade-off in a context marred by a pandemic, geopolitical instability and climate distress,” Ms. Grynspan said.

“Debt cannot and must not become an obstacle for achieving the 2030 Agenda and the climate transition the world desperately needs.”

UNCTAD advocates for the creation of a multilateral legal framework for debt restructuring and relief.

Such a framework is needed to facilitate timely and orderly debt crisis resolution with the involvement of all creditors, building on the debt reduction programme established by the Group of 20 major economies (G20) known as the Common Framework.

Vicious debt circle

“We must support UNCTAD’s call for a reform of international monetary and financial governance,” Bolivian President Luis Acre said in a statement delivered by the country’s finance minister, Marcelo Montenegro.

Mr. Montenegro called for re-examining key aspects of the international financial architecture, including the debt sustainability assessments that serve as a basis for negotiations between debtors and creditors in relation to debt restructuring.

As debt burdens rise, developing country governments end up in a vicious circle, unable to invest in achieving the Sustainable Development Goals (SDGs) and grow their economies, making it even harder to pay their debts.

If a country defaults, the terms of debt restructuring are usually set by groups of creditors competing to get the best terms, rather than giving priority to economic and developmental concerns or the sustainability of debt repayments.

“To resolve these issues equitably, this needs to be done in a manner that maintains the debtor countries’ ability to grow and meet its current and future debt obligations, while also fulfilling its commitments to the SDGs,” Sri Lankan President Ranil Wickremesinghe said in a statement delivered by the country’s permanent representative in Geneva, Ambassador Gothami Silva.

“I believe that the United Nations is best placed to find solutions to this end,” Ms. Silva said.  

Four times the climate change investment needed in developing countries

Estimates show that if the median increase in rated sovereign debts since 2019 were fully reflected in interest payments, governments would pay an additional $1.1 trillion on the global debt stock in 2023.

This amount is almost four times the estimated annual investment of $250 billion required for climate adaptation and mitigation in developing countries, according to an UNCTAD report.

“The anachronistic global financial architecture inhibits timely access to affordable development and climate finance,” Belize’s finance minister, Christopher Coye, said ahead of the conference.

Mr. Coye was speaking at UNCTAD’s sixth session of the intergovernmental group of experts on financing for development, held from 30 November to 2 December.

At UNCTAD’s debt management conference, Barbados’ finance minister, Ryan Staughn, said the world needed to find a solution to the debt crisis “that allows countries to be able to continue to respond to the climate crisis without getting ourselves into trouble.”

“I need not tell you the difference between borrowing to build a school or polyclinic versus borrowing to build an airport or a seaport, which have totally different objectives,” Mr. Staughn said in a statement delivered on behalf of Prime Minister Mia Amor Mottley.

The heavy burden of a strong dollar

Ms. Grynspan also drew attention to the impact of the currency composition of debt on public budgets in the context of an ever-stronger US dollar.

International Monetary Fund estimates show that 70% of all the debt in emerging countries and 85% of the debt in low-income countries is in foreign currency.

Since governments in developing countries spend in local currency and borrow in foreign currency, this structure leaves public budgets highly exposed to large and unexpected currency depreciations.

By the end of November 2022, at least 88 countries had experienced a depreciation against the US dollar this year. In 31 of these countries, the depreciation was greater than 10%.

In most countries in Africa such a depreciation increases debt servicing requirements by the equivalent to public health spending on the continent, Ms. Grynspan said.

“The magnitude of these figures shows the systemic nature of the problem we are facing. And systemic problems demand systemic solutions,” she said.

Promoting multilateral solutions

UNCTAD promotes multilateral solutions in the areas of capacity-building, debt transparency and debt crisis resolution and relief.

The organization is supporting countries through its Debt Management and Financial Analysis Programme (DMFAS), one of its most successful technical assistance initiatives.

DMFAS offers countries proven solutions for managing debt and producing reliable data for policymaking. Since its establishment over four decades ago, DMFAS has supported 116 institutions – mainly finance ministries and central banks – in 75 countries.

Today, 61 countries, of which nearly three quarters are either low- or lower-middle-income, use the DMFAS software to manage their public debt daily.

One example is Chad, which in January 2022 became the first country to officially request debt restructuring under the  G20’s Common Framework.

On debt transparency, UNCTAD supports the establishment of a publicly accessible registry of debt data for developing countries.

Following the UNCTAD principles on responsible sovereign borrowing and lending, this registry would allow the integration of debt data by both lenders and borrowers at the level of specific transactions.

Transparency would strengthen debt management, reduce the risk of debt distress and improve access to financing.

Q1

Global Trade Hits Record $7.7 Trillion in First Quarter of 2022

But the positive trend for international trade may soon come to an end amid tightening policies and geopolitical frictions.

The value of global trade rose to a record $7.7 trillion in Q1 2022, an increase of about $1 trillion relative to Q1 2021, according to UNCTAD’s Global Trade Update published on 7 July.

The growth, which represents a rise of about $250 million relative to Q4 2021, is fueled by rising commodity prices, as trade volumes have increased to a much lower extent.

Though expected to remain positive, trade growth has continued to slow during Q2 2022.

“The war in Ukraine is starting to influence international trade, largely through increases in prices,” the report says.

It adds that rising interest rates and the winding down of economic stimulus packages will likely have a negative impact on trade volumes for the rest of 2022.

Volatility in commodity prices and geopolitical factors will also continue to make trade developments uncertain.

Trade growth strong for both developed and developing countries

According to the report, trade growth rates in Q1 2022 remained strong across all geographic regions, although somewhat lower in the East Asia and Pacific regions.

Export growth has been generally stronger in commodity-exporting regions, as commodity prices have increased.

Trade in merchandise goods reached about $6.1 trillion, an increase of about 25% relative to Q1 2021, and a jump of about 3.6% relative to Q4 2021.

The value of merchandise exports from developing countries was about 25% higher in Q1 2022 than in Q1 2021. In comparison, this figure is about 14% for developed countries.

Merchandise trade between developing countries also strongly grew during Q1 2022

Trade in services grew to about $1.6 trillion, an increase of about 22% relative to Q1 2021, and a rise of about 1.7% relative to Q4 2021.

Substantial increases across sectors

The report shows that most economic sectors recorded substantial year-over-year increases in the value of their trade in Q1 2022.

High fuel prices are behind the strong increase in the value of trade in the energy sector.

Trade growth was also above average for metals and chemicals.

By contrast, trade in the transportation sector and in communication equipment has remained below the levels of 2021 and 2019.

Slower economic growth, war in Ukraine dim prospects

The report says the evolution of world trade for the remainder of 2022 is likely to be affected by slower-than-expected economic growth due to rising interest rates, inflationary pressures and concerns over debt sustainability in many economies.

The report states that the war in Ukraine is affecting international trade by putting further upward pressure on the international prices of energy and primary commodities.

In the short term, because of the inelastic global demand for food and energy products, rising food and energy prices would likely result in higher trade values, and marginally lower trade volumes.

Other factors expected to influence global trade this year are continuing challenges for global supply chains, regionalization trends and policies supporting the transition towards a greener global economy.

multinational containers activity

Plans For a Minimum Tax On Profits Of Multinationals will Have Major Implications for Investment Policy

Developing countries could lose out on tax revenues due to capacity and legal constraints on the implementation of needed reforms

The proposed introduction of a minimum tax of 15% on the foreign profits of the largest multinational enterprises (MNEs) has major implications for international investment and investment policy, according to the UNCTAD World Investment Report 2022 published on 9 June.

The report entitled International tax reforms and sustainable investment provides a guide for policymakers to navigate the complex new tax rules and to adjust their investment strategies.

The proposed reforms, planned for 2023 or 2024, aim to discourage multinationals from shifting profits to low-tax countries. Key implications are:

  • Increased tax revenues from multinationals for most countries.
  • Higher taxes on foreign profits of multinationals.
  • Potential downward pressure on new investment by multinationals.
  • Reduced effectiveness of low tax rates and fiscal incentives to attract investment.
  • Urgent need for investment promotion agencies (IPAs) and special economic zones (SEZs) to review investment attraction strategies.

“While the tax reforms are going to increase revenue collection for developing countries, from an investment attraction perspective they entail both opportunities and challenges,” said UNCTAD Secretary-General Rebeca Grynspan.

She added: “Developing countries face constraints in their responses to the reforms, because of a lack of technical capacity to deal with the complexity of the tax changes, and because of investment treaty commitments that could hinder effective fiscal policy action. The international community has the obligation to help.”

Impact in countries

Tax rates on the foreign profits of multinationals will increase. Foreign affiliates that pay tax rates below the minimum on profits reported in host countries will be subject to a top-up. Also, multinationals will reduce profit shifting and pay host-country rates on a larger profit base.

The estimated rise in the effective tax rates faced by multinationals is conservatively estimated at 2 percentage points. This corresponds to an increase in tax revenues paid by multinationals to host countries of about 15% – closer to 20% for large firms that are directly affected by the reforms.

Both developed economies and developing economies are expected to benefit substantially from increased revenue collection. Offshore financial centers stand to lose a substantial part of revenues collected from foreign affiliates.

For smaller developing countries – which generally have lower rates – the application of the top-up tax could make a major difference in revenue collection.

However, the flipside of increased tax revenues is the potential downward pressure on the volume of investment that the increase in tax on foreign direct investment activities will exert. UNCTAD estimates that cross-border investment in productive assets could decline by 2%.

Policy implications

The planned reforms will have major implications for national investment policymakers and investment promotion institutions, and for their standard toolkits. Fiscal incentives are widely used for investment promotion, including as part of the value proposition of most special economic zones.

International investment policymakers and negotiators of international investment agreements (IIAs) need to consider the potential constraints that IIA commitments may place on the implementation of key provisions of the reforms.

If (often developing) host countries are prevented by IIAs provisions from applying top-up taxes or removing incentives, the tax increase to the minimum will accrue to (mostly developed) home countries. Host countries would lose out on tax revenues without providing any benefit to investors.

“The tax revenue implications for developing countries of constraints posed by international investment agreements are a major cause for concern,” the report notes, adding that the international community, in parallel with or as part of the negotiations of the tax reforms, should alleviate the constraints that are placing developing countries at a disadvantage.

“We need to vastly scale up technical assistance to support implementation of the reforms, and we need a multilateral solution to remove implementation constraints posed by IIAs. As a stop-gap measure, we need a mechanism to return top-up revenues raised by developed home countries that should have accrued to developing host countries,” the report says.

Meanwhile, the report shows that global foreign direct investment recovered to pre-pandemic levels in 2021 but uncertainty looms in 2022.

About UNCTAD

The United Nations Conference on Trade and Development (UNCTAD) is the UN’s leading institution dealing with trade and development. It is a permanent intergovernmental body established by the United Nations General Assembly in 1964.

UNCTAD is part of the UN Secretariat and has a membership of 195 countries, one of the largest in the UN system.

UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively. We provide economic and trade analysis, facilitates consensus-building and offer technical assistance to help developing countries use trade, investment, finance and technology for inclusive and sustainable development.

effects in vulnerable economies such as small island developing states, landlocked developing states and least developed countries”.

Ukraine War’s Impact on Trade and Development

UNCTAD’s Rapid Assessment of the War’s Impact beyond the humanitarian crisis in Ukraine shows a rapidly worsening outlook for the world economy, with the situation especially alarming for least developed countries.

A UNCTAD rapid assessment of the war in Ukraine’s impact on trade and development confirms a rapidly worsening outlook for the world economy, underpinned by rising food, fuel and fertilizer prices.

The report published on 16 March also shows heightened financial volatility, sustainable development divestment, complex global supply chain reconfigurations and mounting trade costs.

“The war in Ukraine has a huge cost in human suffering and is sending shocks through the world economy,” UNCTAD Secretary-General Rebeca Grynspan said in a statement.

“All these shocks threaten the gains made towards recovery from the COVID-19 pandemic and block the path towards sustainable development.”

The two fundamental ‘Fs’

Concern abounds over the two fundamental “Fs” of commodity markets – food and fuels.

Ukraine and Russia are global players in agri-food markets, representing 53% of global trade of sunflower oil and seeds and 27% of global trade of wheat.

This rapidly evolving situation is especially alarming for developing nations. As many as 26 African countries, including some least developed countries, import more than one third of their wheat from the two countries at war. For 17, the share is over half.

“Soaring food and fuel prices will affect the most vulnerable in developing countries, putting pressure on the poorest households which spend the highest share of their income on food, resulting in hardship and hunger,” Ms. Grynspan said.

According to UNCTAD calculations, on average, more than 5% of the poorest countries’ import basket is composed of the products that are likely to face a price hike due to the war. The share is below 1% for richer countries.

Risk of civil unrest

The risk of civil unrest, food shortages and inflation-induced recessions cannot be discounted, the report says, particularly given the fragile state of the global economy and the developing world due to the COVID-19 pandemic.

“Long-standing effects of rising food prices are hard to predict,” the report says, “but an UNCTAD analysis of historical data sheds light on some troubling possible trends.”

Agri-food commodity cycles, for example, have coincided with major political events, such as the 2007-2008 food riots and the 2011 Arab Spring.

Freight rate hikes

Restrictive measures on airspace, contractor uncertainty and security concerns are complicating all trade routes going through Russia and Ukraine. The two countries are a key geographical component of the Eurasian Land Bridge.

In 2021, 1.5 million containers of cargo were shipped by rail west from China to Europe. If the volumes currently going by container rail were added to the Asia-Europe ocean freight demand, this would mean a 5% to 8% increase in an already congested trade route.

“Due to higher fuel costs, rerouting efforts and zero capacity in maritime logistics, the impact of the war in Ukraine can be expected to lead to even higher freight rates,” the report says. Such increases would have a significant impact on economies and households.

In 2021, UNCTAD simulated that the freight rate increase during the pandemic raised global consumer prices by 1.5%, “with particularly oversized effects in vulnerable economies such as small island developing states, landlocked developing states and least developed countries”.

online shopping

UNCTAD SAYS COVID-19 HAS CHANGED ONLINE SHOPPING FOREVER

“COVID-19 and E-commerce,” a United Nations Conference on Trade and Development (UNCTAD) report, finds that the novel coronavirus “has changed online shopping forever.”

Netcomm Suisse eCommerce Association partnered with UNCTAD, in collaboration with the Brazilian Network Information Center and Inveon, to create the “COVID-19 and E-commerce” report. Based on a survey of about 3,700 consumers in Brazil, China, Germany, Italy, the Republic of Korea, Russian Federation, South Africa, Switzerland and Turkey, the report concludes that the pandemic has forever changed online shopping behaviors, greatly accelerating the shift to a more digital world

The greatest shift in this regard, the survey shows, is among consumers in emerging economies. 

“The COVID-19 pandemic has accelerated the shift toward a more digital world,” Secretary-General Mukhisa Kituyi says in an UNCTAD statement. “The changes we make now will have lasting effects as the world economy begins to recover.”

Kituyi added that the acceleration of online shopping globally underscores the urgency of ensuring all countries can seize the opportunities offered by digitalization as the world moves from pandemic response to recovery.

Mixed messages 

The survey shows that online purchases have increased by 6 to 10 percentage points across most product categories, with the biggest gainers being the ICT/electronics, gardening/do-it-yourself, pharmaceuticals, education, furniture/household products and cosmetics/personal care categories.

However, average online monthly spending per shopper has dropped markedly. Consumers in both emerging and developed economies have postponed larger expenditures, with those in emerging economies focusing more on essential products.

No surprise: Tourism and travel sectors have suffered the strongest decline, with average spending per online shopper dropping by 75 percent.

“During the pandemic, online consumption habits in Brazil have changed significantly, with a greater proportion of internet users buying essential products, such as food and beverages, cosmetics and medicines,” said Alexandre Barbosa, manager of the Regional Center of Studies on the Development of Information Society at the Brazilian Network Information Center.

Increases in online shopping during COVID-19 differ between countries, with the strongest rise noted in China and Turkey and the weakest in Switzerland and Germany, where more people were already engaging in e-commerce.

The survey found that women and people with tertiary education increased their online purchases more than others. People aged 25 to 44 reported a stronger increase compared with younger ones. In the case of Brazil, the increase was highest among the most vulnerable population and women.

Also, according to survey responses, small merchants in China were most equipped to sell their products online and those in South Africa were least prepared.

“Companies that put e-commerce at the heart of their business strategies are prepared for the post-COVID-19 era,” said Yomi Kastro, founder and CEO of Inveon. “There is an enormous opportunity for industries that are still more used to physical shopping, such as fast-moving consumer goods and pharmaceuticals.”

“In the post-COVID-19 world, the unparalleled growth of e-commerce will disrupt national and international retail frameworks,” said Carlo Terreni, president, NetComm Suisse eCommerce Association.

“This is why policymakers should adopt concrete measures to facilitate e-commerce adoption among small and medium enterprises, create specialized talent pools and attract international e-commerce investors.”

The survey results suggest that changes in online activities are likely to outlast the COVID-19 pandemic. Most respondents, especially those in China and Turkey, said they’d continue shopping online and focusing on essential products in the future.

China’s speedy recovery gets noticed

“Global Trade Update,” a separate UNCTAD report, highlights China’s notable trade recovery. The country’s exports, after falling in the early months of the pandemic, stabilized in Q2 2020 and rebounded strongly in Q3, with year-over-year growth rates of almost 10 percent. Contrary to other major economies, Chinese imports stabilized in July and August and grew by 13 percent in September.

Other key trade trends include the following:

-Exports from developing countries have fared better than those of developed nations. Year-on-year growth of developing economies’ exports improved from -18 percent in Q2 to -6 percent in July, while those from developed nations increased from -22 percent to -14 percent.

-No region was spared from the fall in international trade in the second quarter of 2020, but the sharpest decline was for the West and South Asia regions, where imports dropped by 35 percent and exports by 41 percent. As of July 2020, the fall in trade remains significant in most regions except for East Asia.

-The value of international trade in the energy and automotive sectors remains substantially below its levels of 2019. On the other hand, increases in demand for home office equipment and personal protective gear has resulted in strong growth rates for trade in the sectors of communication equipment, office machinery, and textiles and apparel.

COVID-19 and Medical Supplies

The report gives special attention to COVID-19 medical supplies (personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment). Key findings include the following: 

-Trade in COVID-19 medical supplies has grown by an average of more than 50 percent since April 2020, but the increase in such trade has primarily benefited residents of wealthier nations.

-Since the outset of the pandemic, each resident of high-income countries has benefited on average from an additional $10 per month of imports of COVID-19 related products, compared with just $1 for people living in middle-income countries and a mere $0.10 for those in low-income countries.

-Overall, per capita imports of medical goods essential to mitigate the pandemic have been about 100 times higher for high-income countries than for low-income nations.

UNCTAD highlights that the difference in access to a potential COVID-19 vaccine for residents in wealthy and poor countries could be even more drastic than for medical supplies. While some low-income countries have the capacity to locally manufacture some protective equipment, this may not be the case for vaccines, which require stronger manufacturing and logistics capacities.  

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.