TWN
Info Service on WTO and Trade Issues (May19/10)
17 May 2019
Third World Network
Gender
and Trade Coalition – Third World Network
Issue
Brief
Why Government Procurement Liberalisation is Contradictory to a
Gender-Just Trade Policy in the South (1)
Trade
and investment policies have been growing in depth and coverage worldwide
and are legally bound through an increasing number of agreements such
as the WTO, the Free Trade Agreements (FTAs), various issue specific
plurilateral agreements, and investment agreements. Such trade and
investment policies, and liberalisation thereof, has created enormous
impacts globally, cutting across economic, social, and environmental
spheres. There has also been differential impact across countries,
sectors, and constituencies.
The
adverse impact of trade liberalisation on women, exacerbated by historically
unequal social relations, has long been advanced as an area of concern
by feminists and women’s rights groups. But the recent resurgence
of discussions on the gender impacts of trade at the WTO, with its
overwhelming emphasis on woman entrepreneurs, has focused a lot of
attention on two so called ‘new issues’: liberalisation of e-commerce
and government procurement (GP). This is premised on the argument
that these will be of major benefit to women in general and will provide
a major boost to women who engage in trade. However, given the sensitivity
of most developing countries to these issues, and the fact that liberalisation
of GP was a Singapore Issue (not allowed for negotiations in the WTO
Doha Development Round to protect developing country interests), a
closer examination of whether GP liberalisation under a multilateral
framework such as the WTO will actually be of benefit to women in
developing countries is necessary. This brief summarises a set of
arguments to show GP liberalisation is not of clear and necessary
benefit to women in developing countries; in fact, the opposite may
be true.
Background
Government or public procurement (GP) refers to government contracts
that involve purchases by government department and agencies of goods
and services, including construction and public works. In developing
countries, this market is a substantial and lucrative one at 15-30%
of the total market. Not surprisingly, this has been a target of trade
liberalisation efforts for some time, and chapters on GP are increasingly
included in FTAs, especially North-South FTAs. However, since GP is
a Singapore Issue, the WTO has a plurilateral agreement called the
‘Government Procurement Agreement’ (GPA) which has only 47 members
including the EU Member States.
Many
developing countries use the GP markets as a preferential tool to
address inequity and development concerns by promoting domestic industries,
small and medium sized enterprises (SMEs), cottage industries as well
as economically and socially marginalised constituencies such as women,
indigenous communities, backward castes and so on. Access to domestic
GP markets is clearly a very useful tool for providing market and
economic opportunities for women. Many governments, both developed
and developing, already practice this, even though implementation
levels vary quite a lot across the globe and women still face many
barriers in practice, and transparency issues, which need to be addressed.
This
is the reason most developing countries have been hesitant to join
the GPA or include market access in GP under FTAs (even if they agree
to transparency and information sharing), because it can take away
vital policy space for development, as they need to specifically negotiate
for carve-outs, or else, give full access to companies from other
countries. Preferences may even need to be given at par for trade
partners (to all SMEs, all women and so on). As such, when GP markets
are liberalised, it is much more complex, both because of the opening
of markets to foreign and often more powerful companies, and the constraints
it places on domestic policy space. The potential impacts on vulnerable
constituencies, such as women, is even more significant.
GP
Liberalisation and Gender-Just Policy
The following arguments explain why the liberalisation of GP markets,
as envisaged under the WTO or seen so far under the GPA, cannot benefit
women in developing countries.
- The
current arguments in this discussion tend to assume the same conditions
for domestic and global GP markets whereas in reality, they are
quite different. Countries (and their women entrepreneurs) participating
in the global market are of very different economic strengths, ranging
from LDCs to very rich countries. Women in developing countries
often cannot access their own markets very easily, so accessing
foreign markets is even more difficult and unrealistic, most often
due to high and even irrational standards and technical barriers,
especially in advanced countries.
- All
women producers do not have the same economic power just because
they are women. Triggering competition between a small woman producer
in a developing or least developed country and a women entrepreneur
based in a developed country is unfair and irrational. Even if reservations
were made for women, it can unleash a competition between very unequal
players.
- In
fact, liberalisation of GP can threaten the preferential access
to domestic markets currently offered by many developing countries
for constituencies such as women, indigenous peoples and so on.
This is because such preferences have to be separately negotiated
for each trade agreement. Even then, this may create an unequal
playing field (see point above).
- In
sum, women producers in developing countries may actually end up
losing market access even in their domestic GP markets and not gain
anything in foreign markets, especially in developed countries.
They, therefore, face the risk of being net losers, even with preferential
treatment for women.
- Developing
countries have been rejecting GP liberalisation as they are adversely
placed in such a competition, and their producers –especially SMEs,
where most of their women entrepreneurs are likely to be– are even
worse off. SMEs cannot meet the standards and other logistical and
non-tariff barriers that global GP markets, especially in developed
countries, pose. The same problems will be valid to an even greater
extent for women producers in these countries.
- Importantly,
the GP markets in most developed countries are blocked off by a
host of non-tariff barriers, due for example to language, laws,
citizenship etc. Even GPA members can hardly access each other’s
markets. For example, of the 2088 billion Euro GP market in the
EU, only 309 billion or 3.5-4.2% (2007) is accessible to non-EU
suppliers, of which the US claims the largest chunk, leaving very
little for all non-US non-EU countries, even GPA members. Similarly,
only 5% of Japan’s GP market is catered by foreign countries. Given
this reality, the idea that small women entrepreneurs in developing
countries could access GP markets in rich countries, even with preferences,
is a myth.
- The
economic empowerment of women in developing and LDCs cannot be achieved
if it is disconnected from their broader national development context.
The WTO is attempting to replace special and differential treatment
for developing countries with horizontal preferences for groups
such as women and SMEs. Women cannot benefit or get empowered by
trade policy if their countries cannot pursue development objectives
related to food security or public health, for example, due to trade
liberalisation commitments under the FTAs or WTO. The current approach
in the WTO first needs to be examined in terms of being able to
benefit women’s general economic and social conditions. Women’s
empowerment needs to go hand in hand with the broad economic and
social development objectives of their countries and not get usurped
into replacing these objectives. Moreover, this cannot be achieved
through artificially constructed gender chapters or carve-outs.
- Most
of the ideas circulating in the WTO, though so far not very concrete,
talk about increasing access for women in global GP markets by promoting
GP liberalisation, possibly through a multilateral agreement under
the WTO on GP or by promoting the GPA in addition to GP liberalisation
through the FTAs. However, the GPA does not yet provide special
access for women. But some of these ideas seem to hint towards special
treatment for women to be protected or given a waiver from the provisions.
If they need a waiver or protection from the agreement, then the
rationale to broaden such agreements in the name of women is not
plausible.
- New
instruments like GP liberalisation are clearly constraining the
policy space in much deeper ways than traditional liberalisation.
They have direct impacts on developing country governments’ ability
to pursue domestically suited development policy objectives to,
for example, conserve natural resources, protect public health objectives,
and pursue necessary regulations including to protect women’s welfare.
While much remains to be done in developing countries towards achieving
women’s economic empowerment and rights, liberalisation of government
procurement poses new regulatory and economic challenges to their
women and men, especially small scale, producers.
In
sum, a gender argument is being used to push presumably for a multilateral
liberalisation of GP markets, which is a ‘new issue’ and is not mandated
for negotiations at the WTO. However, the arguments for women’s access
to domestic markets do not automatically extend to a global GP market
and therefore does not rationalise the case for GP liberalisation.
When even the benefit for other players in developing and least developed
countries is not established, it is unlikely this liberalisation will
work for women who suffer from unequal access to economic, social,
and political resources. Even with preferential treatment, the reality
does not favour women players in poorer countries and may even make
them worse off.
As
such, while preferences for women in domestic GP market is a clear
and desirable development policy objective, the same is not true of
liberalisation of GP markets, so a clear analytical distinction must
be made between the two. Obscuring this distinction will work against
women, especially in the developing south. At the same time, governments
in developing countries need to engage more with women’s groups to
analyse and implement policy reforms to secure more access for women
in domestic GP markets
(1)
Prepared by Ranja Sengupta, Third World Network, member of the Gender
and Trade Coalition.
