Negotiating a fair deal: Are trade agreements with the EU beneficial to women?

Gender issues are conspicuous by their absence from the 'hard' areas of EPA negotiations, such as trade and regional cooperation. In order to estimate the likely impact of future trade agreements on poor women and men, a more systematic approach to trade policy negotiations and to capacity building in ACP countries is required, writes Karin Ulmer.

The Cotonou Partnership Agreement differs significantly from the Lomé Convention, which it succeeded. Although it still contains a commitment to reducing and eliminating poverty, there is a stronger emphasis on integrating the African, Caribbean, and Pacific (ACP) states into the global economy. The economic partnership agreements (EPAs) are designed to speed up this process by reducing or ending preferential treatment of ACP exports to the European Union (EU), and between ACP countries themselves.

The second key aspect of the Cotonou Partnership Agreement is that civil society is to be informed and consulted about decisions on aid, and the economic, social, and institutional reforms that the EU intends to support. It is in this area that APRODEV and other non-state actors can play a vital role in helping to shape policy.

APRODEV’s Zimbabwe case study (Mugabe, Okore and Ulmer 2002) identified the likely effects of EPAs and argued for capacity building of women's organisations and civil society groups more generally, to ensure them a voice in trade policy making. Given the political events in Zimbabwe, advocacy positions since the research have not been further formulated. However, a number of aspects of the Zimbabwe case study are relevant to women in other ACP countries, as well as to policy makers and trade negotiators. The findings of the APRODEV study have also been used to provide input into the EU's sustainability impact assessments and have provided background information for discussions on EPAs and women in West Africa.

What's new about economic partnership agreements?

The current EPA negotiations are not simply about future conditions of access to the EU market, but about extending exclusive trade preferences to the EU. Even though ACP countries have agreed to engage in these talks, they remain uncertain about how far EPAs will benefit their economic transformation, or affect their competitiveness once free trade arrangements are in place. There is some suspicion about how 'free' the trade arrangements will be, given the distorting effects of agricultural subsidies under the EU's Common Agricultural Policy (CAP). There is also a widespread fear that rejection of the EU's proposals may mean that they risk losing all or part of their aid allocations. The EU wants EPA negotiations to go beyond tariffs and trade, to include a wide range of trade-related issues such as tourism, financial services, telecommunications, competition policy, intellectual property rights, labour standards, and consumer policy. The European Commission has explicitly said that it wants discussions to go beyond existing WTO commitments. But virtually all ACP governments lack the capacity to take up this negotiating challenge.

From a one-way to a two-way street

The European Commission strongly favours a radical transformation of ACP–EU trade relations, from a system of non-reciprocal to reciprocal trade preferences. This means that the EU will have preferential access to ACP markets, while goods from ACP countries have preferential access to EU markets. The Commission favours this shift because it wants to ensure that future ACP–EU trade relations are compatible with WTO standards. It claims that under the previous arrangements ACP countries have failed to deliver better industrial or trade outcomes, or to achieve development objectives. It is not entirely accurate, however, to claim that the ACP countries' development objectives were not addressed under preferential arrangements with the EU. For example, between 1980 and 1997, prior to the current economic crisis, Zimbabwe was one of the most successful ACP countries in taking advantage of improved access to the EU market. From 1992 to 1996, Zimbabwean agricultural and horticultural exports rose by 35%. In 1998 the sugar sector alone saw an estimated income transfer to Zimbabwe of more than ?18 million, an amount greater than the annual aid allocation to Zimbabwe under the Lomé Convention (Netherlands Economic Institute Study 2000).

APRODEV has raised concerns over the ability of the new EPAs to contribute to the eradication of poverty. They could instead result in free trade which benefits the EU, but produces very few long-term advantages for the ACP countries. These countries start from a low base: an unhealthy and poorly trained workforce, inadequate transport infrastructure, and weak institutional and policy frameworks. They are vulnerable to agreements with the developed world which are not in the longer-term interest of their people, especially women, who are the backbone of agricultural production. It is vital that existing sub-regional initiatives in Africa continue to be the basis for economic development. As it is not a 'level playing field', ACP states need to develop tough negotiating strategies, and to cooperate much more closely with one another.

Under the Southern African Development Community (SADC) agreement, for example, Zimbabwean food producers have free access to the large South African market. It will be difficult for Zimbabwean food exporters to compete with EU products once the EU also has free access to the Southern African markets in 2010, as stipulated in the EU–South Africa Trade Agreement. This is a strong incentive for Zimbabwe's food-processing industry to become competitive with the EU over the next few years. However, it remains to be seen whether or not this can be achieved.

What's in it for women? The case of Zimbabwe

If official negotiators on both the EU and ACP sides focus only on the macro-economic and political implications of trade, they could fail to address the implications for different social and economic groups. As has happened in the past, the burden of EPA reforms could fall heavily on women. In Zimbabwe, the 1990s Economic and Structural Adjustment Programme (ESAP) resulted in some negative trends for women. Women's employment in the formal sector declined by 9.5% in the first year, and only 6% of jobs created under employment schemes went to women, with only 11% of loans going to small and medium-sized enterprises (SMEs) (ZWRCN 1998). SMEs have proved to be an important area for the economic and social empowerment of women worldwide, but greater liberalisation under EPAs may reduce their capacity to compete with foreign goods and services. Women are seriously disadvantaged by restricted access to productive resources and gaps in training and technology transfer.

In Zimbabwe, most households are headed by women, and 74% of these are poor, whereas 54% of households headed by men are regarded as poor (Ministry of Public Service 1995). Eighty per cent of the rural population depends on agriculture, and women farmers are doubly disadvantaged. Women are allocated the worst and smallest pieces of land, and only 11.8% of all land is controlled by women. Women access only 19.8% of available oxen and 23.3% of available credit to purchase seeds and fertilisers (ZWRCN 1994). In general, past experiences of ACP–EU co-operation show that gender inequality has not been addressed. A 1997 review of 24 EU-funded development projects in ACP countries found that 21 in no way addressed gender inequalities (European Commission 1997). A 2002 Review of EU Country Strategy Papers and aid allocations concluded that gender mainstreaming was hardly taken up in country analysis or strategies in vital sectors such as transport, food security, and rural development (European Commission 2002).

The example of value-added food processing

In Zimbabwe, agriculture is not only essential to individual survival but also the backbone of the economy. It provides 45% of the country's exports, 60% of all raw materials used by its industry, and employment for 70% of the population. Seventy-one per cent of the total female population gains employment from the farming of communal areas. Women comprise 70% of smallholder grain farmers, and maize is an important source of household cash income for them, as well as being a basic crop for household food security (Central Statistical Office 2001).

The 'value-added' food industry in Zimbabwe is an important part of the industrial sector and an important market for locally produced agricultural products. A wide range of food products is produced, including breakfast cereals, biscuits, milk and sugar-based products, canned fruit and vegetables, and a wide variety of processed meat products. These industries absorb a significant proportion of the locally produced agricultural products from both communal and commercial farmers. Communal farmers (largely women) supply the local food-processing industry with maize, cotton, peanuts, sunflowers, and paprika, while commercial farmers supply sugar, soya beans, wheat, and pigs.

The EU's Common Agricultural Policy reform in the cereal sector has reduced EU cereal prices by 45–50% since 1992. It has also led to an 18% expansion of EU cereals production and cereal-based exports from 1991 to 2000 (European Commission 1992–2000). The CAP reform process will affect the market conditions facing ACP producers of competing products, and this in turn will affect their incomes at different stages of agricultural production, processing, and marketing. The impact is likely to be felt most heavily by women. Any trade arrangements which allow the import of cheap subsidised maize or other cereal at prices which undermine local prices are likely to depress rural household incomes. Free trade in maize, cereals, and related products needs to be carefully structured to maximise income opportunities for women in rural areas. Cereals and cereal-based products would need to be subject to special trading arrangements, safeguard mechanisms and special protocols, as with the SADC Free Trade Area. Free trade with the EU is hugely distorted by subsidies to EU farmers. In the case of Zimbabwe, as with other ACP countries, there is a real danger that the deals on offer will damage regional food-processing industries, and women will bear a disproportionate cost.

Ethical trade makes sound commercial sense

The Zimbabwe case study also looked at the expansion of the cut flower sector under current preferential access to EU markets. In this sector, 83% of the permanent workforce and 90% of the seasonal workforce are female (Okore 2001). These women have been the principal beneficiaries of improvements to wages and working conditions resulting from preferential market access to the EU. Cut-flower producers and exporters got together to ensure compliance with quality standards and created a body to uphold the principles of the Agricultural Ethics Assurance Association of Zimbabwe, which covers about 31% of the workers of this sector. This ethical trade initiative has supported improved labour conditions for women working on farms. With premium prices being paid in the EU for 'ethically produced' flowers, the growers have found improved labour conditions beneficial to production efficiency and financial returns. This case demonstrates that fairer labour practices have the potential to bring social and economic gains at the household level, while making sound commercial sense. The research found that any loss of preferential access to the EU market in the cut-flowers sector would adversely affect women. Future trade arrangements should secure and maintain favourable conditions of access to the EU market.

Threat to new regional export opportunities

Under the current SADC protocol, Zimbabwe's sugar industry can exploit the protected and high-priced refined sugar market, with positive spin-offs in terms of female employment. Women are predominantly employed in the packing operations for refined sugar. Zimbabwe is potentially a competitive exporter to the Eastern and Southern African (ESA) market for value-added sugar products. Should free trade with the EU be introduced in the sugar sector, this could pose a real threat to the expansion of Zimbabwe's refined sugar exports to the Southern and Eastern African region. Under current CAP reform, European producers in these sectors receive direct aid, which results in lower prices for their sugar and beef. European agro-business and exporters will be most likely to benefit from low prices and increased exports to ACP markets. In the face of this competition, Zimbabwe may not be able to take advantage of opportunities to export sugar and beef to regional markets, and women will lose opportunities for employment in value-added products in the beef sector.

The need for informed, gender-aware policy

The ACP–EU trade agreements need to incorporate an understanding of the constraints faced by women that make it difficult for them to benefit from trade arrangements. These include low levels of technical capacity and funds, as well as infrastructure and market standards which currently limit or inhibit women's capacity to engage with trade opportunities. The implications of trade distortion resulting from EU agricultural subsidies also need to be recognised, and sensitivity to existing local and regional markets needs to be reflected in agreements. To take the Zimbabwean example, future trade agreements relating to maize could ensure that income opportunities for women in rural areas are maximised, not lost. As a signatory to the Millennium Development Goals, the EU has committed itself to halving the number of people living in extreme poverty in developing countries by 2015. Future trade regimes will have to be measured against this objective. Improved access to the EU markets is of benefit to the huge female workforce in ACP countries, especially in agriculture. It is therefore essential that the progressive opening up of international markets takes into consideration the impacts on women. If future ACP–EU trade arrangements do not improve the position of women, then they do not materially improve the situation of the poorest people.

* Karin Ulmer is the policy and gender officer at APRODEV, where she has worked since 2000. In that time she has worked on the gender/social impact of the EU–ACP trade negotiations (EPAs) and EU gender mainstreaming policies and practices. ([email protected]) This article first appeared in Gender and Development, Volume 12 Number 3 November 2004.

Notes 1 Association of World Council of Churches related development organisations in Europe, a network of 17 major development organisations in Europe.

References

Central Statistical Office (2001) Statistical Bulletin Harare: Central Statistical Office.

European Commission (EC), Directorate General for Agriculture (1992–2000) 'Agricultural situation in the European Union', successive annual reports 1992–2000, Brussels: EC

European Commission (1997) 'Integrating gender issues in development cooperation: progress report 1997', Brussels: SEC (97) 2067

European Commission (2002) 'Assessment of country strategy papers with reference to gender', Brussels: EC

Ministry of Public Service, Labour and Social Welfare (1995) 'Survey', Harare: Central Statistical Office

Mugabe N, Okore M, and Ulmer K (2002) 'EPAs – What's in it for women? Women in Zimbabwe: issues in future trade negotiations with the EU', Brussels: APRODEV.

Netherlands Economic Institute Study (2000) 'Evaluation of the common organisation of the markets in the sugar sector', Annex A3, Rotterdam: CEC

Okore, M (2001) 'Survey: aggregated data based on individual farm report sheets from the Agricultural Ethics Assurance Association of Zimbabwe' (unpublished), Harare

ZWRCN (Zimbabwe Women's Resource Centre and Network) and the Southern African Research and Documentation Centre (1994) 'The gender dimension of access and land use rights in Zimbabwe', Harare

ZWRCN (1998) 'Beyond inequalities: women in Zimbabwe', Harare