Trade and Gender Review of Latin America

In all seven Latin American countries in this Review, women work less in jobs that are both directly and indirectly related to trade than men do, and gender gaps have remained remarkably static over time. Women are up to 40% less likely to be engaged in export-dependent jobs compared with men. They work less in jobs that produce goods and services that are exported (direct employment in trade), and also work less in jobs that produce goods and services that are used as inputs into exports (indirect employment in trade). This is largely due to occupational segregation, where women work more in sectors that are less traded such as health, education, public administration and “other services”— largely face-to-face personal services such as beauty salons and child and elder care. Since trade-related jobs are better paid, more productive, and more likely to be in the formal sector than jobs that produce goods and services for the domestic market, occupational segregation means that women do not benefit from the advantages and better pay that trade-related jobs offer. High-skilled women particularly tend to work in sectors that are less traded.

Engaging in international trade improves firm performance. Women are substantially less likely than men to lead businesses and the businesses they lead are substantially less likely to trade. Ten percent of women-led firms are engaged in international trade in the seven examined Latin American countries, compared to 14% of men-led firms. Both women-led and men-led firms in Latin America export less compared to their counterparts in the OECD. However, the gender export gap in the Latin American countries is smaller than in the OECD, which indicates that lower levels of export do not only plague women-led firms.

Some of the challenges business leaders say they face illustrate the gender export gap. Access to finance is a well-known challenge for women business leaders: in particular, they indicated that securing financing for everyday activities is more of a challenge than their male counterparts. When specifically asked about challenges they face in international trade, women entrepreneurs more often cite issues such as a lack of understanding of foreign markets which may point to a policy opportunity to close an informational gender gap. Women business leaders are also more likely to indicate that access to the internet is a challenge for them, and this is particularly true in the countries where fixed broadband access is more costly relative to income.

Using a proxy for informality devised for this Review, it was found that women-led firms are more likely than men-led ones to be in the informal economy. Moreover, gender disparities persist in this context: men led businesses, whether formal or informal, show a higher inclination towards exporting than those led by women. Since the potential gains from trade could be an incentive for firms to formalise, programmes that encourage formalisation could be combined with efforts to promote exports and assist firms toward export readiness.

Women work and lead businesses in their majority in services sectors. Barriers to services trade can increase the cost of those services, thereby impacting the competitivity of businesses — both women- and men-led — further down the value chain.

Women-led firms tend to be smaller than those led by men and are therefore more negatively impacted by cumbersome, non-transparent and lengthy administrative processes at the border. While their trade facilitation performance remains below the average of OECD economies, Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, and Peru all exceed the average performance of the Latin America and Caribbean region and also perform on par or better than the average for other regions such as Asia-Pacific and Europe and Central Asia. The trade facilitation policy environment has been consistently improving over the past decade in the seven countries. This progress is reflected in increased efficiency in border processes in many of the countries under review, with improvements experienced by the private sector in customs clearance ranging from 3% to 20% since 2017 when the WTO Trade Facilitation Agreement entered into force.

Trade impacts consumers by lowering prices and increasing the variety of goods available. In Latin America as elsewhere, lower income households benefit disproportionately from lower import tariffs; in fact, households at the lowest income decile lose purchasing power twice as much as households at the highest income decile due to tariff-induced price increases. In Costa Rica, the only country with gender-specific data on household expenditure and income, some differences exist in spending patterns of women-led and men-led households on goods such as personal care, car-related items and water supply, but these are minor compared to the overall influence of income.

Latin American countries have led other regions in incorporating gender chapters and gender-related provisions in their trade agreements since 2016 when Chile-Uruguay was the first trade agreement ever to include a gender chapter. Of the 87 trade agreements signed by Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru, 40 contain gender-explicit provisions. All countries included in this Review have joined the Global Trade and Gender Arrangement (GTAGA), a cooperation arrangement which seeks to promote an inclusive approach towards international trade, eliminate barriers women face in accessing trade opportunities, and increase the number of women entrepreneurs in trade. GTAGA is a landmark initiative which is both innovative and comprehensive in its scope, and is strongly geared toward improving women's access to trading opportunities.

The last section of this Review suggests areas for policy reform to better support gender equality in trade. They include making trade agreements more inclusive; market access considerations; support for gender-responsive policymaking; trade facilitation reforms; recommendations for trade promotion agencies and professional networks; and increasing the availability and use of gender-differentiated data. Moreover, domestic policies underpin women’s ability to engage in trade. These include legislation and policies to reduce gender wage gaps, protect workers from sexual harassment, incentivise reporting on gender balance on corporate boards and senior management, ensure access to finance, and reduce costs to access digital networks and services. It also includes ensuring the possibility for work/life balance that is less accessible to women in a context of long working hours and large gender differences in unpaid work. Moreover, tackling the scourge of gender-based violence will be necessary to ensure a context where women can thrive in Latin America and are able to take advantage of economic opportunities, including through trade.