The Monitor | 8 March 2022

How to break the bias in Canada’s gender and trade agenda

by Laura Macdonald

Under the Trudeau government, Canada has taken on a role of global leadership in promoting feminist approaches in all areas of foreign policy, including diplomacy, trade, security, and development. These include Canada’s Feminist International Assistance Policy (FIAP), its Second National Action Plan on Women Peace and Security, the appointment of a Women Peace and Security Ambassador, and elements of a feminist defence policy.

Global Affairs Canada has also advanced an “inclusive approach to trade” that is meant to help more Canadians access the “benefits and opportunities” that are said to flow from free trade and investment deals. This approach has involved procedural and substantive changes to trade policy development.

On the procedure side, groups that have historically been marginalized from trade, including women, small- and medium-sized enterprises (SMEs), and Indigenous peoples, are now regularly consulted on new trade initiatives. Substantively, new trade deals often contain “inclusive trade” elements like full gender chapters, which are primarily meant to increase the numbers of women-owned businesses trading and investing abroad. But these chapters, unlike others, do not have sanctions attached to them.

Feminists have applauded Canada’s efforts to “break the bias”—the theme of this year’s International Women’s Day—working against women in global trade. However, many also wonder if there are deeper biases that need to be addressed before we can call Canada’s trade policy feminist.

Gender-based analysis of Canadian trade deals

The way the Canadian government evaluates and measures the gendered impact of trade and trade agreements has received little attention relative to other aspects of the inclusive trade agenda. As feminist analysts have argued, measurement is not a neutral process. What indicators we choose, what methods we adopt, who is included in consultation processes, and what assumptions we make when undertaking our analyses all affect the outcomes.

Global Affairs Canada now undertakes a gender-based analysis–plus (GBA+) of all new or modernized trade agreements. As in other aspects of Canadian federal policy, this represents a commitment to examine the intended and unintended impacts of new trade policies on diverse groups of people. The “plus” in GBA+ refers to an intersectional analysis of identity characteristics such as Indigenous status, age, socioeconomic status, ethnicity, disability, etc.

This approach, which has been applied to current gender-based analyses of the potential Mercosur, Ukraine, Indonesia and United Kingdom trade agreements, is innovative and represents real progress in thinking about the unequal impacts of trade. However, if we look more carefully at how the GBA+ is conducted, several problems become apparent.

First, GBAs of new trade deals are largely built upon quantitative projections of potential changes to trade and investment flowing from a successful agreement.

Economists use a complex computable general equilibrium (CGE) model to simulate the impact of trade liberalization (e.g., tariff reductions, removal of entry barriers for foreign service providers and foreign investment, harmonization of standards and regulations, etc.) on key economic variables. CGE has been the gold standard for trade policy-making in liberal economies for decades, but the method is hotly criticized, too.

Economist Jim Stanford, among others, points out that CGE modelling is only as good as the assumptions you plug into your equations. When assessing the impact of trade deals, those assumptions typically include the following:

• The presence of full employment in both countries before and after the deal comes into force;

• Incomes that automatically rise with productivity gains;

• Frictionless transfer of investment between industrial sectors; and

• Workers being able to seamlessly find new employment—even outside their area of specialization—in the event they lose their jobs due to the trade deal.

As Stanford puts it: “This approach simply wished away all the problems of unemployment, job loss, inequality and stagnation that are now bedevilling trade policy.” Basing your GBA+ primarily on this quantitative prediction will naturally lead to suspect outcomes.

For example, the GBA+ of Canada’s potential trade deal with the Mercosur bloc (Paraguay, Uruguay, Brazil, and Argentina) suggests that women will benefit from the agreement because they are disproportionately employed in the service sector where the most jobs are expected to be created. But the GBA+ also notes that the main benefits in terms of wages will go to traditional male occupations like machinery operators and manual labourers.

It seems odd to assume a Mercosur deal will be good for women workers when relatively lower-wage service employment is boosted. Why is the availability of jobs and not their quality the primary measure of a gender-forward trade agreement?

Seeing the bigger picture

Global Affairs Canada has to some extent responded to this criticism of CGE models by including labour market modelling in their assessments of new deals that recognizes the unreality of the full employment assumption. Instead, the department now factors in “frictional unemployment” that occurs when workers shift jobs, and other dynamic elements of contemporary labour markets. This new method does not, however, include considerations of women’s work in the care economy.

Such quantitative approaches also use gender-disaggregated data based on gender binaries, failing to take into account the impact on gender-diverse individuals. Global Affairs Canada economists have included data on youth labour force participation in the recent analysis of the Canada–U.S.–Mexico Agreement (CUSMA), but the GBA did not include data on race or ethnicity, disability, or other dimensions of inequality.

Global Affairs Canada’s evaluations of new trade and investment agreements do include some qualitative assessment methods to analyse other trade provisions, like those covering intellectual property (IP) rights. Unfortunately, too often the department’s bias for a preferred negotiating outcome or business model limits the value of the GBA for considering broader welfare impacts on a wide variety of women.

For example, Canada’s GBAs take for granted that the Canadian government should seek the strongest protections for patents and trade secrets in its international agreements. The focus of the GBA then becomes how to encourage more women innovators to benefit from this system rather than whether more balanced IP regimes, or even industrial strategies based on generic production of patented goods, would be better for the sustainable development of Canada’s trading partners.

This brings me to perhaps the most concerning part of Canada’s trade GBAs to date, which is their bias toward Canadian women and a small group of them at that. All the quantitative and qualitative processes involved in assessing trade policies so far focus on the potential benefits to Canadian women, especially women entrepreneurs and businesspeople, and do not take into account any harms that might occur to women, workers, racialized individuals, and other vulnerable people in the countries with whom Canada trades.

Is this really the best model for including trade in Canada’s feminist foreign policy?

Canada continues to make good efforts to normalize gender-based analysis of trade at home and in international settings. Domestically, Global Affairs Canada has established a gender and trade advisory group, which is regularly consulted on Canada’s many trade initiatives. The government consults members of this group on its GBAs of new trade deals, with a view to refining the process.

Canada was also a leader in the establishment of a new Global Trade and Gender Arrangement (GTAGA) that includes New Zealand, Australia and Mexico. This group permits cooperation and standards-setting with trade partners with whom we have not signed free trade agreements.

While the cumulation of international agreements including requirements to cooperate on gender is a step forward, the inclusive trade agenda is limited to what it considers important, i.e., what it measures. Re-examining how trade policy is evaluated through gender-based analysis and moving beyond traditional methods can help us break the bias that persists in the global trading order.

This article draws upon Laura Macdonald’s chapter with Nadia Ibrahim, “Trade Policy and Gender Equality Measurement: The Canadian Government’s Inclusive Trade Strategy and Civil Society Responses,” in the book Critical Perspectives on Gender Equality Measurement in Canada, currently under review with UBC Press.

Laura Macdonald (she/her) is Professor in the Department of Political Science and the Institute of Political Economy at Carleton University and a member of the CCPA’s Trade and Investment Research Project (TIRP).