An Analysis of Mercosur

TEACHING MATERIAL ON TRADE AND GENDER VOLUME 1: UNFOLDING THE LINKS MODULE 4C TRADE AND GENDER LINKAGES: AN ANALYSIS OF MERCOSUR

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Teaching Material on TRADE AND GENDER

Volume 1 Unfolding the links

Module 4c Trade and Gender Linkages: An Analysis of MERCOSUR

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ii ACKNOWLEDGEMENTS

This module was prepared by an UNCTAD team including Chiara Piovani (lead author), Maria Masood, and Burak Onemli. Comments and suggestions were provided by Daniela Alfaro, Nursel Aydiner-Avsar, Alma Espino, Valeria Esquivel, Alicia Frohmann, Monica Hernandez, Jacqueline Salguero Huaman, Manuela Tortora and Simonetta Zarrilli. The module was coordinated and supervised by Simonetta Zarrilli, Chief of the Trade, Gender and Development Programme at UNCTAD. David Einhorn was in charge of English editing.

The publication of this module was made possible by the ﬁnancial support of the Government of Finland, which is gratefully acknowledged.

iii TABLE OF CONTENTS

NOTE ii ACKNOWLEDGEMENTS iii LIST OF BOXES v LIST OF FIGURES v LIST OF TABLES vi

Trade and Gender Linkages: An Analysis of MERCOSUR 1

C 2 4 1. Introduction 1.1. The institutional development of MERCOSUR 2 1.2. Socio-economic overview of the member countries of MERCOSUR 4 2. Gender proﬁles of MERCOSUR member countries 8 2.1. Gender-related outputs 9 2.1.1. Overview of gender inequalities in MERCOSUR 9 MODULE 2.1.2. Gender analysis of work and employment in MERCOSUR 12 2.2. Gender-related inputs 17 3. Trade policy and trade ﬂows: A gender analysis 21 3.1. Evolution of trade policy and engendering trade policy 21 3.1.1. Regional trade policy: Evolution of gender considerations 21 3.1.2. National trade policy 22 3.2. Changes in trade structure 23 3.3. Employment effects of trade integration 27 3.3.1. Macroeconomic analysis 27 3.3.2. Microeconomic analysis 28 4. Conclusions and policy suggestions 32 Exercises and questions for discussion 35 Annex 1. Empirical analysis: Methodology 36 A1.1. Macroeconomic analysis 36 A1.2. Microeconomic analysis 37 Annex 2. Case studies 40 A.2.1. Isis Gaddis and Janneke Pieters (2017): “The Gendered Labor Market Impacts of Trade Liberalization – Evidence from Brazil” 40 A.2.2. Maria Inés Terra, Marisa Buchelo, and Carmen Estrades (2008): “Trade Openness and Gender in Uruguay: A CGE Analysis.” 40 REFERENCES 42 ENDNOTES 46

iv LIST OF BOXES

Box 1 Time use in MERCOSUR: A gender-based assessment 16 Box 2 Informal employment 20

LIST OF FIGURES

Figure 1 Selected economic and social indicators, 2016 5 Figure 2 GDP shares of MERCOSUR countries, 2016 (percent) 6 Figure 3 Average growth rate in GDP per capita, 2014–2017 (per cent; constant 2010 U.S. dollars) 6 Figure 4 Sectoral composition of economic activity, 2016 (per cent shares of GDP) 7 Figure 5 Indicators of political participation, 2016 (per cent) 10 Figure 6 Agricultural holders, by sex (per cent) 11 Figure 7 Access to credit, by sex (per cent) 12 Figure 8 Sectoral composition of employment, by sex (per cent) 13 Figure 9 Male and female employment shares in manufacturing (per cent) 14 Figure 10 Composition of male and female employment by work status (per cent) 15 Figure 11 Sectoral composition of MERCOSUR trade with the rest of the world in the post-2000 era (per cent shares in total merchandise exports and imports) 24 Figure 12 Geographic composition of MERCOSUR exports and imports with main trading partners 25 Figure 13 Export and import concentration index in MERCOSUR countries 26 Figure 14 Applied tariff rates for primary and manufactured products in MERCOSUR countries (trade-weighted averages; per cent rate) 26 Figure 15 Impact of an increase in trade openness on the female share of employment across sectors in MERCOSUR countries (percentage points) 28 Figure 16 Share of female workers in exporting ﬁrms in production tasks (per cent) 29 Figure 17 Share of female workers in exporting ﬁrms in non-production tasks (per cent) 30 Figure 18 Estimated impact of a 1 percentage point decrease in import tariffs on female-to-male employment ratios (per cent) 31 Figure 19 Estimated impact of a 1 percentage point decrease in export tariffs on female-to-male employment ratios in production tasks (per cent) 31

v LIST OF TABLES

Table 1 MERCOSUR: Basic economic indicators 5 Table 2 Human development, 2015 8 Table 3 Indicators of gender inequalities, 2015 9 Table 4 Global Gender Gap Index (GGGI) rankings 10 Table 5 Composition of male and female employment in services by sub-sectors (per cent) 14 Table 6 Urban gender wage ratio by years of schooling (per cent) 16 Box table 1.1. Men’s and women’s time spent on domestic work and care as a proportion of total available time (per cent) 16 Table 7 Trade ﬂows (per cent of GDP) 23 Table A1.1. Macroeconomic results: Estimation of the impact of trade openness on female-to-male employment ratios across sectors 36 Table A1.2. Descriptive statistics: Variables of the microeconomic analysis 37 Table A1.3. Microeconomic results: Estimation of the impact of tariff variations on female-to-male employment ratios 38 Table A1.4. Microeconomic results: Estimation of the impact of tariff variations on female-to-male employment ratios with interactive country dummies 39

vi C Module 4C Trade4 and Gender Linkages: An Analysis of MERCOSUR

1 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 2 Trade andDevelopment (UNCTAD). preparedthe UnitedNationsConference by on tradeteaching manual on andgender the 1 of the sixthmodulein is This document Volume 1. Introduction comprised offour countries: Argentina, Brazil, Asian Nations). MERCOSUR iscurrently Agreement, the AssociationofSoutheast and European Union, American Free the North Trade trading bloc(trailingworld’s fourth largest the tradingthe blocand South America’slargest ( Market the countriesthe SouthernCommonto of to 3 griddevelopedanalytical inModules1 The present study, Module4c,the applies (SADC). the SouthernAfricaon Development Community African Community (EAC); andModule4bcentres Africa (COMESA); Module4afocusesthe East on the Common for Market Eastern andSouthern individual worldregions. Module4examines the specificcircumstances andinstitutionsof to examine to 3canbeapplied in Modules1 to illustratethe framework how presented teaching materialdevelopment ofadditional three moduleshaveThese beenfollowedthe by competitivenesstrade and performance. examining how genderinequalities affect export the reverseModule 3discusses relationship by consumers, producers,traders, taxpayers. and their rolestrade womenin asworkers, impacts the transmission channels through which the gender-trade nexus. Module2presents and toolsto measure trade and understand inequality. also provides It basicdefinitions the multipledimensionsofgender to measure gendered structure, andintroduces key indicators the economythe meaningof asa 1 explains trade.relationship betweengenderand Module analysis andanempiricalthe review of to 3in Modules 1 Volume 1provide aconceptual formulate gender-equitable policies. the gendereffectstradetrade of and policyand society organizations,to evaluate andacademics the capacityofpolicymakers,of enhancing civil the intentionmanual hasbeendeveloped with Theeconomy asa • gendered structure Mercado ComúndelSur oue1Mdl oue3Module4 Module3 Module2 Module 1 • Transmission impacts women impacts which trade channels through -MERCOSUR), 1 The teaching The • How gender and micro data. the MERCOSUR countriesin usingbothmacro tradeand liberalization onfemale employment trade of flows the impact empirical estimationof progresstrade inengendering policy)andan tradeand policyinMERCOSUR (with afocus on continues withadescriptivetrade analysis of to mainstreamthe region gender. The module haveand policyefforts that in beenundertaken is complemented the institutional withareview of achievementsterms ofwell-being. in This analysis the economy,in to resources, access and evaluation ofmen’sandwomen’sparticipation the MERCOSUR countries,of whichconsists ofan the genderprofilesmovesto anexamination of the MERCOSURperformance countries. of then It the recentof MERCOSUR socio-economic and the institutionalbrief review developments of Paraguay, andUruguay. witha Module4cstarts able to: this module,the endof At students shouldbe the analysis. the policyimplicationsof discusses establishment ofa customs union. the Treaty ofAsunciónandformalizedthe Ouro Preto onDecember17, 1994, whichupdated tradeThe blocwasthe expandedunder Treaty of Argentina, Brazil, Paraguay, andUruguay. to establish acommon between market aimed the the signingof Treaty ofAsunción, which MERCOSUR was founded onMarch 26, 1991with institutionaldevelopment The of 1.1. 2006 (Coffey, 1998). begin onJanuary1,to becompleted by 1995and to formation ofacommon wasto set market performance and trade competitiveness affect export inequalities • Interpret• andapplyvarious indicatorsof • Interpret the empirical Interpret findingsongender • • Understandthe methodology to evaluate the interactions Identifytrade between and • gender inequalities to MERCOSURgender inequalities and tradeto designgender-equitableand policies. employment trade of integrationthe impact onfemale gendered economic outcomes MERCOSUR 2 concludes and section The last

• 4c: MERCOSUR • 4b: SADC • 4a: EAC • 4: COMESA Trade andgender • linkages in: 4 , 5 3 The Trade and Gender Linkages: An Analysis of MERCOSUR 4c

The creation of MERCOSUR was based on both members and four alternate members from the economic and political considerations. Regional member countries, coordinated by the Ministries

integration, in fact, aimed to signal the belief in of Foreign Affairs (UNCTAD, 2003). MERCOSUR module the importance of both democracy and economic also includes a Parliament (known as PARLASUR), development to promote better living conditions which aims to represent the interest of the for the population. This commitment entailed citizens of the member countries and holds an common initiatives not only for free trade, but advisory role for the decision-making entities. also to support infrastructure, telecommunica- tions, technological development, security, envi- MERCOSUR requires members to maintain free ronmental quality, and human rights. trade of goods and services between member countries. Any change to trade policies requires Venezuela was admitted as a member in 2012, the consensus of the other members, but countries but was suspended on December 1, 2016 due to can ask that certain products be exempted in failure to comply with the group’s standards on order to protect local industries. MERCOSUR trade and human rights.6 Bolivia has been in the countries are also subject to a common external process of becoming a member of MERCOSUR tariff (CET), which indicates the tariff level since 2012.7 Bolivia, Colombia, Ecuador, and Peru members apply to non-member or associate (i.e., the Andean community) and Chile are countries.9 In addition to economic requirements, currently associate members of MERCOSUR. This MERCOSUR requires that its members maintain means that they receive tariff reductions and are democratic institutions. Since 2002, MERCOSUR eligible to participate in free trade agreements also guarantees a “free residence area” that with the other countries of the bloc, but they have allows the citizens of its members (joined by no voting rights and remain outside the bloc’s Bolivia and Chile) to become residents and customs union.8 In July 2013, Guyana and Suriname workers in the participating countries without acquired associate status as well by concluding a visa. MERCOSUR members are also required to framework agreements with MERCOSUR. Mexico comply with a series of agreements that aim to holds the status of an observer state, indicating coordinate macroeconomic and sectoral policies its willingness to follow the developments of among member countries to facilitate commerce MERCOSUR and potentially join in the future. and ensure equal competition.10

MERCOSUR became an effective international After substantial progress in trade liberalization organization in December 1994 with the entry in the 1990s – leading trade within the bloc to grow into force of the Protocol of Ouro Preto, which from about US$4 billion in 1990 to over US$20 established the institutional structure of the billion in 1998 – the expansion of MERCOSUR organization and endowed it with legal status. experienced setbacks due to economic shocks, The Common Market Council (CMC), the Common intra-bloc trade disputes (especially between Market Group (CMG), and the Trade Commission Argentina and Brazil), and political changes. The constitute the main decision-making entities of Brazilian currency devaluation in 1999 and the the organization. Argentine economic crisis in 2001–2002 put a The CMC is the highest decision-making halt to the process of economic integration. The body and is in charge of formulating and impact of these economic crises was aggravated implementing the decisions of MERCOSUR. The by mutual disagreements between Brazil and CMC is composed of the Ministers of Foreign Argentina on trade policy. Trade policy contention Affairs and the Ministers of the Economy (or between the two countries has been a recurrent their equivalents) of the member countries. issue since the formation of MERCOSUR, and was The presidency of the CMC rotates among again an acute issue during and following the its members (in alphabetical order) every six 2008–2009 global ﬁnancial crisis.11 In addition, months. The CMG has executive power and issues between 2000 and 2015 the elected governments and enforces the decisions of the CMC. The CMG of the member countries regularly disagreed on is composed of four permanent members and the speed and beneﬁts of trade liberalization. As four alternate members per country, appointed MERCOSUR’s decision-making is institutionally by their respective governments. Governments based on consensus among its member countries, are required to appoint representatives of any member holds veto power. Internal political the Ministry of Foreign Affairs, Ministry of the disagreements inevitably slowed the expansion Economy (or equivalent authorities), and the of MERCOSUR.12 It is important to add that, as of Central Bank. The Trade Commission, in contrast 2018, major political instability in both Brazil and to the other governing institutions, has more Paraguay constitute important threats not only technical competencies. It is responsible for for the economic development and democracy of advising and implementing the common these countries, but also for the future prospects trade policy. It is composed of four permanent of MERCOSUR.

3 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 4 to lead to a tradeto a deal in2018. to lead the 1990sand–asofJanuary2018are expected under way (withmultipleinterruptions) since and Peru), the Pacific Alliance(i.e., Chile, Colombia, Mexico, blocs andcountries, includingJapan, Canada, towardstrade liberalizationtrading withexternal favour ofrevitalizing (orinitiating)negotiations Since 2015,trend MERCOSUR in hasshowna in the figure,in there are remarkable differences 2015). 2010; Carballo Muñoz, delaRiva andEchart interventions inareasto gender(Fernós, related to issuerecommendationsauthority onpolicy countries. Itsmandateisadvisory,the including the member on genderissuesappointed by of government representatives withexpertise Women (RMAAM). The RMAAM iscomposed Ministers andHighest-Level Authoritieson the MERCOSURcreation MeetingofFemale of institutional representationthe in2011with towards gendermainstreaming, whichacquired the early2000s,Since turned MERCOSUR has Commission, 2007). on HumanRights (amongothers) (European Social Institute andMERCOSUR PublicPolicies of newinstitutions,the MERCOSUR suchas of integration,the development to whichled MERCOSUR hasabroaderthat vision indicated formationthe Structural of Convergence Fund small enterprises, housing, andeducation. The infrastructure, sanitationfacilities, incentives for including (asexamples) roads, energy regional development, support that projects disparities. The fundfinancesawiderange of Structural Convergencethese to address Fund approvedthe MERCOSURthe establishment of development,the membercountries in2005 differences important exhibit their level of in the membercountriesBecause ofMERCOSUR and the poverty headcountthe poverty ratio.and commonly usedmeasure(the most ofinequality), population, populationdensity,the Giniindex socio-economic indicators: GDP, GDPper capita, member countries,the following including key Figure 1 presentsthe MERCOSUR amapof Socio-economic overview ofthe member 1.2. focus 2. ofSection MERCOSUR andits membercountriesthe is framework andeconomic outcomes of of MERCOSUR cooperation agreementsthe four with members which currently holdsbilateral and partnership the Europeannegotiations are Union, with the European Union.and advancedThe most (Iceland, Liechtenstein, Norway, andSwitzerland), 16 countries ofMERCOSURcountries A gender analysis of the institutional A genderanalysis of 13 the European Free Trade Association 14 . The negotiationshave been 15 17 Asshown in acountry. regarded asanindicationofsevere inequality Gini coefficient equal orabove 40iswidely the poor.the richand large gapsbetween A All MERCOSUR countries are confronted with GDPpercapita.the lowest the countryGDP andpopulationisalso with countryterms ofboth the regionsmallest in in ofArgentina’s).10 percent Finally, Paraguaythe is ofBrazil’s 2percent (Uruguay’s GDPisabout and ofbothBrazilthat andArgentinathan smaller economy,largest although itseconomy ismuch based onGDPpercapita.third the Uruguayis the region,in countrythe richest Uruguayis ofBrazil.that countrythe smallest Despitebeing and populationlevel are one-fifth bothabout of in MERCOSUR isArgentina, whoseeconomic size population density. economyThe second largest the highest populous countrythe onewith and economy ofMERCOSUR, the most isalso andit member countries. acrossthe variousthe dimensionsbetween in 1990 per cent to 11.3 per cent in2013. to 11.3percent in 1990percent the Caribbean fromAmerica and 28.2percent Poverty dropped (withsomevariations) inLatin income). a share ofGDP)andGDPpercapita(i.e., average as andexports the sumofimports (measured by to populationlevel, economic growth,trade region between1996and2016withregard for showdevelopmentsthe that MERCOSUR in Table 1provides key aggregate economic variables (ECLAC, 2017a). 2) (seeSection onunpaidactivities time spent in disparitiesbetweenmenandwomen the great different forms ofgenderinequalities, especially policies,the address require that public policies itsroots,at aswellmonetaryredistribution Byanyima, 2016). and sustainable development (Bárcena and to economic growth, threat a social stability, income andwealth distribution. This constitutes terms ofboth unequalthe worldin region in since 2008,the most LatinAmericaisinfact of Brazil above 50. improvements Despiteslight Gini coefficient around orabove 40,that with transfers. programmesthe form in ofconditional cash economic growth, also social assistance but levels onlyof in poverty the results are not remains at moderateremains at levels. however,the region’s headcount poverty ratio on regional andinternational comparisons, Paraguay (7and 8percent, respectively). Based 0.5 percent, respectively), higherinBrazil but and and relatively lowinArgentina andUruguay(2.4 a dayin2011purchasing powerparity, orPPP)is headcountpoverty ratio US$3.20 (measured at 23 22 Moving forward, eradicating poverty 18 AllMERCOSUR countries have a 19

Brazil isbyfarthe largest 21 Improvements 20 The Trade and Gender Linkages: An Analysis of MERCOSUR 4c

Figure 1 Selected economic and social indicators, 2016 module

BRAZIL 'W ͗h^ΨϮϮϰϴ͘ϭďŝůůŝŽŶ 'W ͗h^ΨϮϲ͘ϰďŝůůŝŽŶ 'WƉĞƌĐĂƉŝƚĂ ͗h^ΨϭϰϬϮϯ 'WƉĞƌĐĂƉŝƚĂ ͗h^Ψϴϴϳϭ WŽƉƵůĂƚŝŽŶ ͗ϮϬϳ͘ϳŵŝůůŝŽŶ WŽƉƵůĂƚŝŽŶ ͗ϲ͘ϳŵŝůůŝŽŶ WŽƉ͘ĚĞŶƐŝƚǇ͗Ϯϰ͘ϴƉĞŽƉůĞƉĞƌƐƋ͘Ŭŵ WŽƉ͘ĚĞŶƐŝƚǇ͗ϭϲ͘ϵƉĞŽƉůĞƉĞƌƐƋ͘Ŭŵ 'ŝŶŝŝŶĚĞǆ ͗ϱϭ͘ϯ;ϮϬϭϱͿ 'ŝŶŝŝŶĚĞǆ ͗ϰϳ͘ϵ PARAGUAY WŽǀĞƌƚǇ WŽǀĞƌƚǇ ŚĞĂĚĐŽƵŶƚƌĂƚŝŽ͗ϴ͘Ϭ ƉĞƌ ĐĞŶƚ ;ϮϬϭϱͿ ŚĞĂĚĐŽƵŶƚƌĂƚŝŽ͗ϳ͘ϬƉĞƌĐĞŶƚ

URUGUAY

ARGENTINA 'W ͗h^Ψϰϰϱ͘ϮďŝůůŝŽŶ 'W ͗h^Ψϰϴ͘ϮďŝůůŝŽŶ 'WƉĞƌĐĂƉŝƚĂ ͗h^Ψϭϴϰϴϵ 'WƉĞƌĐĂƉŝƚĂ ͗h^ΨϮϬϬϰϳ WŽƉƵůĂƚŝŽŶ ͗ϰϯ͘ϴŵŝůůŝŽŶ WŽƉƵůĂƚŝŽŶ ͗ϯ͘ϰŵŝůůŝŽŶ WŽƉ͘ĚĞŶƐŝƚǇ͗ϭϲ͘ϬƉĞŽƉůĞƉĞƌƐƋ͘Ŭŵ WŽƉ͘ĚĞŶƐŝƚǇ͗ϭϵ͘ϳƉĞŽƉůĞƉĞƌƐƋ͘Ŭŵ 'ŝŶŝŝŶĚĞǆ ͗ϰϮ͘ϰ 'ŝŶŝŝŶĚĞǆ ͗ϯϵ͘ϳ WŽǀĞƌƚǇ WŽǀĞƌƚǇ ŚĞĂĚĐŽƵŶƚƌĂƚŝŽ͗Ϯ͘ϰ ƉĞƌ ĐĞŶƚ ŚĞĂĚĐŽƵŶƚƌĂƚŝŽ͗Ϭ͘ϱƉĞƌĐĞŶƚ

Source: World Bank, World Development Indicators database, available at https://data.worldbank.org/data-catalog/world- development-indicators (accessed on 17 May 2018). Note: GDP is calculated in constant 2010 U.S. dollars; GDP per capita is measured in constant 2011 international U.S. dollars, based on purchasing power parity (PPP); population density is measured as persons per square kilometre of land area; and the poverty ratio refers to the poverty headcount ratio at US$3.20 a day (2011 PPP).

Table 1 MERCOSUR: Basic economic indicators 1996 2001 2006 2011 2016

Total population (millions) 208.5 224.0 237.8 250.0 261.7

Annual GDP growth (percent)a 2.9 0.2 4.7 4.4 -3.2

Trade (percent of GDP)a 18.1 26.7 30.3 27.3 25.8

GDP per capita, purchasing power parity 11,746.6 11,850.4 13,348.5 15,841.7 14,941.1 (constant 2011 international dollars)a

Source: Calculations by the UNCTAD secretariat based on the data from the World Bank’s World Development Indicators database, available at https://data.worldbank.org/data-catalog/world-development-indicators (accessed on 15 November 2017). a The values are weighted by the economic size of MERCOSUR’s member countries, as measured by each country’s GDP share in MERCOSUR’s GDP.

Economic growth in MERCOSUR, as in all of Latin by primary commodities, so export revenue is America and the Caribbean, began to slow steadily highly dependent on global commodity prices in 2010. In 2015 and 2016, Latin America and the (e.g., metals, energy, and agricultural goods). Lower Caribbean experienced two consecutive years of export revenue, in turn, translated into lower economic contraction.24 There are two primary domestic consumption and private investment. factors explaining this recent trend. The ﬁrst The second reason is the decline in external is a downturn in commodity prices, which had demand, particularly from emerging economies boomed between the early 2000s and 2011 and and especially from the People’s Republic of China, then started to decline.25 As discussed in Section due to a deceleration in GDP growth in these 3, the basket of exports in the region is dominated countries (IMF, 2015, 2017; OECD, 2017).

5 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 6 +1.3, and+1.2percent, respectively). rateslimited GDPpercapitagrowth of+0.24, Paraguay, andUruguaymaintained positive but ratecapita growth of-2.8percent. Argentina, 2017 Brazil experiencedadeclineinitsGDPper As illustrated inﬁgure 3, between2014and Pradhan, 2017). of deeperregional integration and (Basnet interdependence ispromising for prospects exchange rates, andinterest rates). Such real output, investment, intra- regionaltrade, and financial macroeconomic variables (i.e., demonstrated byco-movements ofbothreal among MERCOSUR countries isstrong, as (2017),the macroeconomic interdependence andPradhandetermined empirically byBasnet ofaggregateand 1percent GDP, respectively. As Uruguay andParaguay onlycontributeto 2 of MERCOSUR’s GDP, respectively. Incontrast, economies contributeto 78and19percent performance ofBrazil andArgentina, whose of MERCOSURthe dependscritically on As showninfigure 2,the economic performance the region. to promoteAmerica inclusive development in ofraisingthe importance productivity inLatin to al.,(Cadena et 2017). (2016)haspointed The OECD only0.6increasing at peryear ofapercent the early2000s,since perworker withoutput inLatinAmericahasbeenvery weakgrowth Comparedto all otherworldregions, productivity development-indicators (accessedon3July 2018). Source: Figure 3 World Bank, World Development Indicators database, available https://data.worldbank.org/data-catalog/world- at -3.5 -2.5 -1.5 -0.5 0.5 1.5 -3 -2 -1 0 1 Average rate growth inGDPpercapita, 2014–2017(percent; constant 2010U.S. dollars) Argentina Brazil 1% Paraguay development-indicators (accessedon15November 2017). available https://data.worldbank.org/data-catalog/world- at Source: China and the UnitedStates. China and the People’s on highly dependent Republic of by oilseeds, ores, meat, machinery, andfuels) are MERCOSUR countries, (dominated whoseexports trading forthree partner all other the largest the world’sseventh economyis largest andis Based on World Bankdata, asof2018, Brazil and the People’sand Republic ofChina(inorder of to Brazil,soybeans andcorn) the UnitedStates agriculturalprimarily exports products (e.g., America, isabundant innatural resources, and Argentina, economythe second largest inSouth Figure 2 GDP sharesofMERCOSUR countries, 2016(percent) World Bank, World Development Indicatorsdatabase, aauyUruguay Paraguay 78% Brazil 2% Uruguay 26

19% Argentina Trade and Gender Linkages: An Analysis of MERCOSUR 4c export value). In recent years, Argentina has Based on the World Bank’s World Development experienced signiﬁcant economic ﬂuctuations Indicators, the share of manufacturing in 27 (Basnet and Pradhan, 2017). Argentina declined from 24.4 per cent in 1991 to module 16.4 per cent in 2016. Over the same period, the Figure 4 illustrates the sectoral composition manufacturing share in Brazil declined from of the MERCOSUR economies. The agricultural 25.3 to 11.7 per cent. The same process of early share is the smallest in all four countries, de-industrialization over the course of economic although Paraguay stands out for an development has characterized Uruguay and agricultural share that corresponds to one- Paraguay. In Uruguay, the share of manufacturing fifth of the economy. In Argentina, Brazil, and halved between 1991 and 2016 (from 28.3 to Uruguay, agriculture contributes to 7.6, 5.5, 14.4 per cent). In Paraguay, which is the country and 6.8 per cent of the economy, respectively. with the lowest level of development in the Agriculture, however, is a key sector in the region, the manufacturing share contracted from region, as MERCOSUR is one of the most 15 to 11.9 per cent over the same period of time. important regions in the world in terms of exporting agricultural products.28 Considering Over the past two decades, exports from both the major crops on global markets – soybeans, Argentina and Brazil have become increasingly corn, rice, wheat, and sugar – MERCOSUR is the dependent on providing minerals and agricultural world’s third largest producer after the United products to the People’s Republic of China, in States/Canada and the People’s Republic of turn eroding investment in manufacturing China (Martins and Oliveira, 2012). (O’Connor, 2012). Rapid industrial development of the People’s Republic of China, in fact, has Services constitute the largest share of the generated large demand for primary products, economy in all countries, led by Brazil (73.3 per which has induced Latin American countries cent) and followed in order of magnitude by to exploit natural resources, which in turn has Argentina (65.8 per cent), Uruguay (64.4 per been driving a process of de-industrialization cent), and Paraguay (49.7 per cent). The case of in the region since the early 1990s. That process Brazil is quite unusual, as a service share above has been empowered by the availability of 70 per cent is typically shown by countries at cheap manufacturing imports from the a higher level of income and a more advanced People’s Republic of China, which negatively stage of development. This phenomenon impacted local manufacturing development is explained by Brazil’s early process of (Kim and Lee, 2014). As determined empirically de-industrialization. by Greenstein and Anderson (2017), premature

Figure 4 Sectoral composition of economic activity, 2016 (per cent shares of GDP)

Agriculture Industry Services 80 73.3 70 65.8 64.4

49.7 50

30.3 28.8 30 26.7

21.2 20.0 20

10 7.6 5.5 6.8

0 Argentina Brazil Paraguay Uruguay

Source: World Bank, World Development Indicators database, available at https://data.worldbank.org/data-catalog/world- development-indicators (accessed on 15 November 2017).

7 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 8 Source: Human Development Report 2016 Report Human Development the UnitedNationsDevelopment Programme’sin the region,human development in aspresented Table 2presentsthe level anoverview of of of industrial employment. the America defeminisation– tendsto support de-industrializationthe caseofLatin –asin b human-development-index-ihdi. level ofinequality. iscalculated, Forthe IHDI anexplanationof how seehttp://hdr.undp.org/en/content/inequality-adjusted- a of living. development: education, health, andstandard three key dimensionsofacountry’s human evaluatesthe stateof that measuresummary isa The HumanDevelopment Index(HDI) inequalities (UNDP, 2016a). barriers, andlegal constraints generatethat those socialturn addressing norms, in economic United NationsSustainable Development Goals, callsthe for inclusive policiessupporting UNDP to inequality,in humandevelopment due the five, andUruguayby seven. Tothis loss address drops bysixpositions, Brazil’s by19, Paraguay’s by inequality isconsidered, ranking Argentina’s HDI drops one-fifth. byabout Index (HDI) When inequality,the region’s Human Development the region.development in When adjustedfor – contributeto slowingprogress inhuman health care –also ofgenderinequality asaresult account. Disparitiesinincome, education, and rankingtaken worsenwheninequality is into All MERCOSUR countries, however,their see medium humandevelopment group. the region,human development in fallingthe in development. Paraguay level of the lowest has Uruguay arethe group also ofhighhuman in the region,development in whileBrazil and trails level onlyChilefor ofhuman the highest high levels ofhumandevelopment. Argentina countries range betweenmedium andvery (2016a),the MERCOSURthe UNDP According to development (ranging fromto low). very high are ranked andassignedalevel ofhuman the 188countries iscalculated forthe HDI which In contrast to the HDI, the IHDI discountsthe average the HDI, Incontrastto the IHDI achievement inincome, health,their respect andeducationaccordingto The loss in human development due to inequalitythe differencethe IHDI. ismeasured Thelossinhumandevelopment due based on and the HDI between rga .9 4Hg 115.7% 25.6% 24.3% 61 15.6% 98 115 High 51 High Medium 54 Very high 110 79 45 0.795 0.693 0.754 Uruguay 0.827 Paraguay Brazil Argentina Table 2 Country UNDP (2016). UNDP 29 According to the value Accordingto the index, of Development Index (HDI) Human (UNDP, 2016a). Development Index (rank) Human Human development, 2015 the notionof“gender.” social dominant values also shapereflect that transactionsall economic institutionsand a society. AsexplainedinModule1, however, providethat forthe livelihood ofactivities the sphere ofproductiveto anddistributive term “economy”to referThe iscommonly used Genderprofiles ofMERCOSUR 2. both social andeconomic development. the economy,of womenin turn promoting in the successfulparticipation areto ensure critical equality inasociety andwomen’sempowerment and assets. Targetedto ensure gender policies to skills,biases embeddedinaccess resources, employed andsmall entrepreneursto gender due under-achievers ofcompetitive advantage asself- markets. Alternatively, womenmayremain their competitiveness oninternationalto boost firms wage gapcanbeexploited byexporting competitive advantage.” For instance,the gender competitive advantage” and“under-achievers of in Module3, womencanbeboth“sources of tradethe context of In liberalization, asexplained beunveiledmust andaddressed. taken be intomust account, andgenderbiases both productive andreproductive activities from agenderperspective,that whichmeans the economy examineeconomic analysis must earnings. AsindicatedinModule1, arelevant their lowerbargaining powerbecauseof the economy),sphere of andhave less the corethe reproductivewhich constitute of (i.e.,activities care labour andhousework, and lowerwages, more unpaid carryout the formlabour in market ofjobsegregation to facethetend genderdiscriminationin the household.within For example, women political power, aswelldecision-making terms ofeconomic andto menin respect are found inapositionofdisadvantage with development Level of human member countries (IHDI) ranking (IHDI) adjusted HDI adjusted HDI Inequality- 30 a Typically,women due to inequality development human Loss in 31 b ive Trade and Gender Linkages: An Analysis of MERCOSUR 4c

This section examines the gender profiles of and higher education; and (3) economic activity, MERCOSUR member countries by discussing both measured by the labour market participation rates 34 gender-related outcomes (i.e., an assessment of for women and men. The closer the GII is to zero, module the various dimensions of gender inequalities the higher the degree of gender equality. Based based on gender-disaggregated indicators) and on the GII, the member countries of MERCOSUR gender-related inputs (i.e., an evaluation of gender perform better than the developing countries in mainstreaming efforts in MERCOSUR). Based on South Asia, sub-Saharan Africa, and Arab states. data availability, the emphasis of the discussion is However the average value of the GII in the region on the role of women as workers and producers.32 (0.381) remains well above the average GII among OECD countries (0.194). 2.1. Gender-related outputs Over the course of the regional integration 2.1.1. Overview of gender inequalities in process, the GII has improved in all MERCOSUR MERCOSUR countries; Uruguay has shown the largest improvement (from 0.44 in 1995 to 0.28 in 2015), As stated in UNDP (2016a), the disparities faced followed by Paraguay, Brazil, and Argentina, by women constitute the most serious barrier to respectively.35 progress in human development. As discussed in Module 1, on the basis of the operational The GII ranking is in conflict with the HDI framework introduced by the UN Millennium ranking for two of the four MERCOSUR countries: Project Task Force on Education and Gender Argentina ranks 77th based on the GII (in contrast Equality (UN Millennium Project, 2005), it is to 45th on the HDI), and Brazil ranks 92th on the possible to distinguish three domains of gender GII (compared to 79th on the HDI). Uruguay’s equality: (1) capabilities, which refers to basic ranking is quite consistent (55th on the GII achievements of human development (e.g., compared to 54th on the HDI), whereas Paraguay health and education); (2) access to resources is the only country in the region performing and opportunities, which refers to the ability of slightly better on the GII (104th) than on the HDI individuals to earn an adequate livelihood through (110th). In the case of Paraguay, however, both access to assets, infrastructure, employment, and the HDI and GII are quite low when compared decision-making; and (3) security, which refers to globally. the degree of vulnerability to violence and conflict. Table 3 reports gender-disaggregated indicators As the analysis of this module is centred on the for education, income, and the labour force economic participation of women as employers participation rate. Men and women on average and producers, the assessment of gender complete comparable years of schooling. In inequalities focuses on domains (1) and (2). Uruguay and Brazil, women’s mean years of Table 3 provides indicators of gender inequalities, schooling is even slightly higher than men’s. which are published annually in the UNDP’s Gender disparities in the economy, however, Human Development Report.33 remain pervasive. In MERCOSUR, the role of women in society is still primarily associated The Gender Inequality Index (GII) is a composite with unpaid care work, which leaves women indicator that provides a summary representation with less time to pursue a career or to even of gender disparities in three areas: (1) reproductive enter the labour market.36 Consistently, there health, measured by maternal mortality and is an important gap between the labour force adolescent birth rates; (2) empowerment, participation rate of men and women in the measured by the share of parliamentary seats region. The primary identification of women with held by women and attainment in secondary the sphere of the household helps explain men’s

Table 3 Indicators of gender inequalities, 2015 Estimated gross Labour force Gender Mean years Gender national income per capita participation rate Inequality of schooling Country Inequality (in 2011 PPP dollars) (per cent, ages 15-64) Index Index (ranking) Female Male Female Male Female Male

Argentina 0.362 77 9.7 10.0 12,880 29,363 48.4 74.5

Brazil 0.414 92 8.1 7.5 10,670 17,738 56.3 78.5

Paraguay 0.464 104 8.1 8.2 6,139 10,165 58.1 84.6

Uruguay 0.284 55 8.8 8.3 14,608 24,014 55.4 76.3

Source: UNDP (2016). Note: PPP: purchasing power parity.

9 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 10 (WEF) since2006, the been calculated by World Economic Forum widely knownindicator). This indicator, whichhas the most (whichis the GII to disparities inaddition to consider anotherindicatorofgender important MERCOSURthe world, compare of the rest with is it to understandhowgenderdisparitiesin In order the correspondingthan half income for men. in Argentina,the level ofincome for womenisless ofmen’sincome; 40percent women earnabout than women. InBrazil, Paraguay, andUruguay turn,In mensystematically receive more income higher averageto women’s. income withrespect b a and (4)political empowerment. educational attainment; (3)health andsurvival; andopportunity;(1) economic participation (2) them calculated usingmultipleindicators:of the followingmeasured by four categories, each their progresstowardson genderequality, as (GGGI). The GGGIranks now144countries based fromthe Word Economic Forum’s GGGI(2006and2017). Source: on 17November 2017). Source: Rankings are out of the 115countries Rankings of are examined out by WEF (2006). rga 456 96 90 34 64 66 67 41 Uruguay Paraguay Brazil Argentina Table 4 Rankings are out of the 144countriesRankings of are examined out by WEF (2017). Figure 5 onr GGGIranking Country Compiledthe UNCTAD by basedondata Secretariat World BankGender Statisticsdatabase, available https://datacatalog.worldbank.org/dataset/gender-statistics at (accessed Global GenderGapIndex (GGGI)rankings 40 20 30 10 25 35 15 0 5 37 retn rzlParaguay Brazil Argentina is the Global Gender Gap Index the Global GenderGapIndex is 2006 Proportion of seats held by women in national parliaments (per cent) Proportionof women in ministerial level positionscent) (per a 2017 Indicatorsofpoliticalparticipation, 2016(percent) 38 b

participation, respectively. large shares ofparliamentary andministerial fortheir relativelyand Uruguaystandout parliaments inMERCOSUR countries. Argentina ofseatsheldbywomeninnationalproportion thewomen holdingministerial positionsand respectively. Figure ofthe proportion 5shows to multiplesources ofﬁnancing,and access making, distributionofagricultural holdings, ofwomeninpolitical decision- participation the ofgenderinequalitiesthe extent in individual capability levels, ﬁgures 5–7illustrate To provide anindicationofdisparitiesin in political empowerment). overallto progress gendergap(especially due towards increasea 3percent the closing (equally withPeru): in2017, Uruguayrecorded improvementthe greatest the region in countriesthe region. in Uruguayhasshown gender-equalthe most Argentina isoneof Guatemala). Incontrast,the GGGI, basedon America andCaribbean region (togetherwith performing countrythe entireworst in Latin health andsurvival. Paraguaythe emergesas gender gapineducational and attainment towards genderequality, andBrazilthe closed Argentina andUruguaymadeprogress (table 4). Incontrast,the sameperiod, during gap worsenedinbothBrazil andParaguay Between 2006and2017,the global gender (especially inBrazil andParaguay). decision-making is stillmale-dominated however, asonaveragethe world, in political 39 Within MERCOSUR, Within Uruguay Trade and Gender Linkages: An Analysis of MERCOSUR 4c

According to the Inter-Parliamentary Union,40 economic empowerment. Figure 6 illustrates the which ranks 193 countries based on the sex-disaggregated shares of agricultural holders,

percentage of women in the lower or single deﬁned by FAO as “the civil or juridical person who module House, Uruguay, Paraguay and Brazil are quite makes the major decisions regarding resource use low in the ranking (96th, 134th, and 155th, and exercises.”42 It shows that the distribution respectively). Argentina, however, is among the is strongly biased in favour of men, especially top 20 countries, ranking 16th.41 in the case of Brazil. Male agricultural holdings constitute 84 per cent of total agricultural Asset ownership is an important resource to holdings in Argentina (169,555 men versus support a person’s well-being in case of divorce, 32,768 women), 87 per cent in Brazil (4,519,381 men separation, death of a spouse, or unemployment. versus 656,255 women), and 64 per cent in In turn, it is an important source of women’s Uruguay (28,433 men versus 8,839 women).

Figure 6 Agricultural holders, by sex (per cent)

100

0 Male Female Male Female Male Female Argentina Brazil Uruguay

Source: Food and Agriculture Organization, Gender and Land Rights database, available at http://www.fao.org/gender-landrights- database/en/ (accessed on 30 November, 2017). Note: Data are not available for Paraguay. The data for Argentina refer to 2002; the data for Brazil refer to 2006; and the data for Uruguay refer to 2011.

Access to credit is of fundamental importance men (3.7 versus 3.6 per cent). In Paraguay, women for farm and business owners to initiate or and men show very similar borrowing rates from expand their activities, and more generally to ﬁnancial institutions (12.9 versus 12.8 per cent), support economic advancement. In the case and in Uruguay, women rely on informal lending of MERCOSUR, women typically constitute a more than men (1.1 versus 0.7 per cent). smaller share of borrowers than men, regardless of the source of credit (ﬁgure 7). There are a In the MERCOSUR region, men’s greater access few exceptions, but by small margins. In Brazil, to credit than women’s is consistent with the women borrow from family or friends more than traditional view that women have a secondary men (6.1 versus 5.7 per cent) and women borrow role in the economy, as their primary role tends to from a store or buy on credit to the same extent as be associated with unpaid care responsibilities.

11 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 12 market participation, market reconcilingthe homewithlabour unpaid workin gender discrimination,the difficultyof including (Elson, 1999). Becauseofdifferent forms of by lowwages andpoorworkingconditions characterizedto jobopportunities turn leading the labour remains market weak,power in in care labour.this case, In women’s bargaining remain primarilyresponsible for housework and isprofitableto enterprisesit and womenmay changes, because discriminationmaypersist source ofempowerment. institutional Without anautomatic an individual choiceandisnot in labour always markets of the result isnot to note, isimportant It however, participation that and genderdisparitiesinMEROCOSUR. integration hasaffected women’semployment 3willevaluateanalysis inSection howregional the economy.the composition of The empirical throughdistributional change sectoral shifts in explained inModule2,tradeto a leads infact andincomeemployment opportunities. As liberalization implicationsonwomen’s hasdirect economic resources andopportunities. Trade to of genderinequalitiesto access inrelation the key areemployment indicators among As explainedinModule1, income and in Genderanalysisofworkandemployment 2.1.2. who borrowto start, operate, orexpandafarm orbusiness, whichrefersto 2011. For Brazil, all datareferto 2011. farm orbusiness. For Argentina, Paraguay, andUruguay, datareferto 2014; the onlyexceptionthe percentage is ofmenandwom Note: (accessed on17November 2017). Source: 59 yearsoldinLatinAmericaare overrepresented Figure 7 Norecent dataare available for Paraguaythe percentage on ofmenandwomenwhoborrowto start, operate, orexpanda 20 10 25 15 World Bank, GenderStatisticsdatabase, available https://datacatalog.worldbank.org/dataset/gender-statistics at 0 5 MERCOSUR Borrowed fromastorebybuyingoncredit aeFml aeFml aeFml aeFemale Male Female Male Female Male Female Male Borrowed fromafinancialinstitution retn rzlParaguay Brazil Argentina 43 womenbetween20and Access tocredit, by sex (percent) 26.7 to 28.1percent) andinParaguay26.7 (fromto 22.6 corresponding male share increased inBrazil (from to 10.8 in1998 percent in2017. percent 9.4 The in Brazilthere increase been a slight has from shrunk inArgentina, Uruguay, andParaguay; only the share ofwomenemployedinindustryhas for women.the course Over ofregional integration, much largersources for ofemployment than men As of2017, both industry andagriculture were in2017). to 59.8percent 1998 onlyin Uruguay (fromobserved in 62.1percent workforce in2017. Asmall contraction hasbeen the male of percent absorbing 65.6 with services change, beensignificant thereArgentina hasnot (to 57.7 in2017, and48percent respectively). In also expandedconsiderably inBrazil andParaguay in2017. percent 84.3 Male inservices employment increased services to from in1998 71.6percent occurred inBrazil, where in women’semployment Argentina in2017. remarkableThe most expansion total female of 92 percent in employment hasincreasedservices inall countries, reaching especially for women. Female in employment source inall ofemployment largest four countries, of regional integration. the is sector tertiary The haschangedoverthe course sectors tertiary and the primary,and womenemployedin secondary, Figure 8illustratesthe distributionofmen how comparedcent to men(ECLAC, 2017a). incomethe poorest to 40per quintilein byup Borrowed fromaprivateinformallender Borrowed fromfamilyorfriends Uruguay en Trade and Gender Linkages: An Analysis of MERCOSUR 4c

26.5 per cent). In Argentina and Uruguay, there has to urban areas to take on service jobs. It needs to been instead a reduction in men’s employment in be considered, however, that the ofﬁcial statistics

industry (from 34.4 to 33.6 per cent and from 32.2 on women’s employment in agriculture may module to 28.5 per cent, respectively). underestimate the actual amount of women’s work, as women often engage in low-wage, With regard to agriculture, women’s employment part-time, and seasonal employment and are has increased only in Uruguay and Argentina, but less likely than men to deﬁne their activities as it remains a very small share (0.1 and 3.8 per cent in work. In addition, women tend to work longer 2017, respectively). In Paraguay, there has essentially hours than men; in turn, even if fewer women been no change, with agriculture accounting for are involved, their work time may even be greater 14.4 of women’s employment in 2017. On the other than men’s (ILO, 2016). hand, Brazil saw a substantial contraction from 19 per cent in 1998 to 4.9 per cent in 2017. Men’s employment in agriculture has declined in all countries except Uruguay, where it doubled In MERCOSUR, as in general in Latin America, (to 11.7 per cent in 2017). Agriculture absorbs a female employment in agriculture is much small share of men’s employment in Argentina smaller than in other developing countries. (0.8 of a per cent in 2017), whereas the respective This is due to relatively high levels of female shares are more considerable in Brazil (14.6 per education and a pattern of women’s migration cent) and Paraguay (25.5 per cent).

Figure 8 Sectoral composition of employment, by sex (per cent)

Agriculture Industry Services 100 90

80 40.1 47.3 48.0 70 57.7 59.8 64.5 65.6 62.1 71.6 60 74.5 77.2 84.3 84.6 87.1 89.2 92.0 50 22.6

40 26.7 26.5

30 28.1 28.5 9.4 20 10.9 32.2 34.4 33.6 8.4 37.3 19.0 26.0 25.5 10 10.8 14.0 9.2 10.6 14.2 14.6 14.4 11.7 7.8 1.1 0.8 4.9 1.4 5.6 0 0.2 0.1 3.8 1998 2017 1998 2017 1998 2017 1998 2017 1998 2017 1998 2017 1998 2017 1998 2017 Female Male Female Male Female Male Female Male Argentina Brazil Paraguay Uruguay

Source: World Bank, World Development Indicators database, available at https://data.worldbank.org/data-catalog/world- development-indicators (accessed on 15 November 2017).

Figure 9 focuses speciﬁcally on how employment slightly. In Paraguay, the female share has declined, in manufacturing – one of the sub-sectors included whereas the male share has remained virtually under industry – has changed between the late unchanged (i.e., the contraction is marginal). 1990s and the most recent years. Manufacturing development has traditionally been considered Figure 9 provides another piece of evidence of a key steppingstone in the process of economic the process of premature de-industrialization development, as it constitutes a major source of that began in Latin America in the 1970s. technological innovation. In addition, employment There is evidence that de-industrialization in in manufacturing tends to offer higher wages and Latin America has been accelerated by trade potentially more stable job opportunities than the integration. Tariff reduction and the dismantling agriculture and low-skilled services sectors. There of other barriers to international trade exposed has been a substantial contraction in the share of the domestic industrial sector to international both men and women employed in manufacturing competitiveness. As the industrial sector was in Argentina and (especially) Uruguay. In Brazil, the not ready to compete internationally, trade share of female employment in manufacturing integration led to the destruction of formal has increased, while the male share has declined employment and an expansion of the informal

13 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 14 has not been included in this table.this beenincluded in has not Note: Source: the MERCOSUR region,to know isimportant it source in ofemployment the largest of GDPand share the largest constitutes sector tertiary the As domesticindustries.to undercut cheap enough price ofAsian(especially Chinese)goodsremains footwear, andsmartphones. Nonetheless,the on many sectors,textiles, includingautomobiles industries. MERCOSURtariffs maintains high remains more protective ofitsdomestic to otherregionalcomparison blocsMERCOSUR to observe,2013). isimportant It however, in that (whichhasspurredsector inequality) (Bogliaccini, Note: Source: oesadrsarns29353441323544620023003.7 0.0 2.3 0.0 2.6 6.2 2.2 4.4 7.6 3.5 8.5 3.2 1.7 4.1 18.5 1.2 20.1 3.4 18.5 8.3 3.5 23.8 7.1 17.5 2.9 2.3 15.4 18.6 2.6 18.4 10.1 compulsory social security 17.7 11.9 Public administration anddefence, 18.3 20.5 and businessactivities Financial intermediation, 21.8 real estate, Transport, storage andcommunications Hotels andrestaurants Wholesaletrade, andretail andrepair dcto . . 471. . . 041. . . 129.8 11.2 11.9 2.2 11.5 2.9 2.1 10.5 3.1 10.4 7.7 2.5 6.5 2.0 1.8 14.3 14.7 1.4 3.2 9.2 2.8 9.7 3.0 3.1 organizations, n.e.c andservices ofprivateActivities households, extraterritorial activities Other community, social, andpersonal service Health andsocial work Education Table 5 Figure 9 The dataavailable for Paraguayto 2007and2008follow are limited adifferent classiﬁcation. Forthis reason, Paraguay The 2010sreferto 2014for Argentina andBrazil,to 2016for and Paraguay andUruguay. 20 10 25 15 ILOStat database, ILOStat available www.ilo.org/ilostat at (accessedon16November 2017). ILOStat database, ILOStat available www.ilo.org/ilostat at (accessedon16November 2017). 0 5 eaeMl eaeMl eaeMl eaeMale Female Male Female Male Female Male Female Composition of male and female employment in services by sub-sectors (percent) Composition ofmaleandfemale by sub-sectors inservices employment retn rzlPrga Uruguay Paraguay Brazil Argentina Male andfemale sharesin manufacturing (percent) employment 0021 0021 0221 0221 0021 002010 2000 2010 2000 2014 2002 2014 2002 2010 2000 2010 2000 031. . 06728658877886868.2 8.6 8.6 7.8 8.7 5.8 8.6 7.2 10.6 8.9 10.6 10.3 ...... 5.2 5.5 4.3 4.7 6.2 5.5 2.7 2.9 6.1 5.8 5.3 6.0 ...... 5.2 5.7 6.6 9.1 5.0 4.2 5.3 5.4 7.6 7.3 8.1 7.9 . . 891. . . 751 . . 018 20 1.2 1.6 14 17.5 1.0 1.3 18.1 18.9 0.9 1.3 aeFml aeFml aeFemale Male Female Male Female Male 1998 retn rzlUruguay Brazil Argentina in the services sector.the services in Wholesaletrade, andretail source for ofemployment than for women men and social workhave remained amuchlarger foremployment women. Education, health care, source of the largest with domesticwork–are essentially n.e.c.services that coincide –all jobs households, extraterritorial organizations, and traditional divisionoflabour, ofprivate activities since 2000.table 5, Asshownin followingthe changedsigniﬁcantly hasnot sector tertiary sector. the The composition in ofemployment forthe in men’sandwomen’semployment jobsaretypes ofservice more relevant what 2010 s Trade and Gender Linkages: An Analysis of MERCOSUR 4c and repair are the most relevant sub-sectors for employment includes “own-account workers” male employment, followed by transport, storage (i.e., self-employed workers without employees)

and communications, and the public sector. and “contributing family members” (i.e., unpaid module family workers). Vulnerability means that these Figure 10 completes the discussion on gender jobs tend to be precarious and offer limited differences in employment by looking at the work access to social protection schemes. Vulnerable status of men and women in MERCOSUR.44 It employment decreased for both men and women shows clearly that women are underrepresented between 2004 and 2016 (the only exception is a among employers; on average, the share of small increase of 0.7 of a percentage point among women employers is about half that of men.45 women in Paraguay). According to the ILO, however, Correspondingly, as of 2016, with the exception the number of people in vulnerable employment is of Paraguay, the female share of employees was expected to increase in the coming years as a result well above the corresponding male share. of the slowdown that started in 2015 (ILO, 2017). Between 2004 and 2016, the proportion of Looking at gender differences under vulnerable employees increased for both women and employment, men in all four countries constitute men in all four countries due to a reduction a larger share of own-account workers, whereas in vulnerable employment. According to the women are overrepresented among contributing International Labour Organization (ILO), vulnerable family members.46

Figure 10 Composition of male and female employment by work status (per cent)

Employees Employers Own-account workers Contributing family members 100

0 2004 2010 2016 2004 2010 2016 2004 2010 2016 2004 2010 2016 2004 2010 2016 2004 2010 2016 2004 2010 2016 2004 2010 2016 Male Female Male Female Male Female Male Female Argentina Brazil Paraguay Uruguay

Source: ILOStat database, available at www.ilo.org/ilostat (last accessed on 16 November 2017).

Table 6 presents the urban gender wage ratio, in gender pay differentials between men which is a relative measure of gender inequality and women for all education levels, with the in earnings.47 As discussed in the core teaching exception of six to nine years of education. In manual (Volume 1, box 1), the gender wage gap Uruguay, the gender wage ratio improved only for is measured by the difference between male and higher education (as indicated by over 10 years of female average wages, expressed as a percentage education). of male average wages. In the case of MERCOSUR, the ofﬁcial data provide the urban gender wage Two key observations emerge from table 6. First, in ratio, measured by the ratio of average male some cases education seems to help close gender earnings to average female earnings in urban pay differentials for urban employees. Second, areas. Between 1990 and 2014, a substantial despite the general improvements in gender pay reduction in gender wage inequalities was differentials, substantial gender inequalities persist. observed in all countries. In Brazil and Paraguay, These gender inequalities in the labour market are the gender wage ratio improved at all levels of largely the result of gender discrimination and schooling. In Argentina, there was a reduction occupational segregation, which require speciﬁc

15 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 16 are wagethe denominator). earners(in ismultipliedby100.The result the averageby dividing salary ofurbanwomenwhoare wagethe numerator)the average earners(in and salary ofurbanmenwho the samecharacteristics.the salary ofmenwith and 49working35ormore hoursperweekagainst The variable iscalculate Note: Source: countries worldwide – is in fact the traditionalcountriesthe worldwide–isin fact inMERCOSURmarket countries –asinmost A key driverthelabour ofgenderinequalities in traditional issuesand market genderstereotypes. bothspeciﬁclabour target policy interventionsthat Table 6 shopping, installation, andrepair andservicing ofpersonal andhouseholdgoods,tasks. among other members, food preparation, dishwashing, cleaning andupkeep ofadwelling, laundry, ironing, gardening, caring for pets, forof services ownconsumption. Domesticandcare work includeschildcare,the sick, care of elderly, ordisabled household Note: Source: engage inthepaidsphereofeconomy. countries,in most womenhandlethelion’sshareofunpaidresponsibilities, whichleavesthemwithlesstimeto bymenandwomenonunpaiddomesticcarework.of timespent withthetypicalpatternobserved Consistent In thecaseofMERCOSUR, time-usesurveysareavailable forallfourmembercountries. Table 1.1reportsthe percentage gender-equitable way. widelyavailable,Time-use surveysarestillnot aregrowinginnumber. but through conventionalsurveysbasedonformalactivitiesonly, ina inordertoinducepublicbudgets tobespent compensated. Inturn, available isnot time-usesurveysaimtoprovideadditionalinformationpolicymakersthat iscriticalforhouseholdandcommunitywelfarework that issociallyundervalued monetarily but isnot becauseit characteristics (e.g., gender, levelofincome, location, etc.). Time- usesurveysaimtohelpassignvalue tounpaid theirsocio-economic count bytheindividualsinasociety,care work)versuspaidworkcarriedout takingintoac onunpaidwork(i.e., oftimespent informationontheamount Time-use surveysservetocollect houseworkand Box 1 Uruguay Paraguay Brazil Argentina rga 038419.9 15.0 13.2 23.4 8.4 4.4 3.0 9.3 2013 2016 2012 Uruguay 2013 Paraguay Brazil Argentina

Table 1.1. Men’s andwomen’s timespenton domesticwork andcareasa The gender wage ratiothe average measures salary ofurbanwomenwhoare wagethe agesof20 earnerswhoare between CEPALSTAT database, available estadisticas.cepal.org/ (accessedon5December2017). at onunpaiddomesticandcareTime spent the average workrefersto time women and menspendonhouseholdprovision CEPALSTAT database, available estadisticas.cepal.org/ (accessedon25June2018) at Year Urban gender wage ratio by years ofschooling(percent) Time useinMERCOSUR: Agender-based assessment 3yasadoe 0780.2 72.2 70.7 69.6 60.1 13 yearsandover 83.4 57.5 13 yearsandover 72.1 13 yearsandover 13 yearsandover 0t 2yas6. 71.7 77.3 67.9 69.8 72.5 to 12years 10 82.1 56.9 to 12years 10 68.6 to 12years 10 to 12years 10 o9yas6. 65.8 69.1 67.8 72.2 52.1 to 9years 6 73.4 55.6 to 9years 6 77.8 to 9years 6 to 9years 6 o5yas6. 63.2 60.0 64.0 76.0 48.4 to 5years 0 88.7 53.7 to 5years 0 77.7 to 5years 0 to 5years 0 oa 3283.6 78.9 73.2 81.9 63.4 92.4 Total 67.0 Total 82.6 Total Total Proportion of time spent ondomesticandcare work of Proportion Men Women of women to informalof women (box employment 2). the labour andconﬁnes market alargenumber in constraint forto accessjobopportunities women care economy (box 1). This constitutes amajor unpaid work, especiallythe withregardto gender divisionoflabour betweenpaidand proportion oftotalavailableproportion time(percent) 902014 1990 d Trade and Gender Linkages: An Analysis of MERCOSUR 4c

2.2. Gender-related inputs the ILO’s 34 conventions, which were considered essential to minimize asymmetries in national A country’s gender-based inputs specify the legal legislation and to provide minimum standards module and institutional framework for gender equality for national laws. The Southern Cone Union and women’s empowerment. These inputs form Head Offices Coordinating Agency (Coordinadora the underlying legal and institutional gender de Centrales Sindicales del Cono Sur, CCSCS), setting for the observed gender-related outputs established in 1986 to bring together the main concerning education and access to resources and union head offices from Argentina, Brazil, Bolivia, opportunities. They also influence other aspects Chile, Paraguay, and Uruguay, began at this of gender outputs, such as women’s health in the point to participate in the integration process capabilities domain and gender-based violence (Bianculli and Hoffman, 2016). and sexual harassment in the security domain. However, in this module, the focus is on women’s In 1997, the CCSCS-MERCOSUR Women’s participation in economic life, as the focus of Commission was founded with the objectives this module is on the gender and trade nexus. of encouraging the active participation of This section presents the relevant policies and female workers in MERCOSUR, ensuring unions institutions or, in other words, gender inputs of and women’s departments and secretariats the MERCOSUR members. receive up-to-date information, disseminating the content of relevant legislation nationally The international, regional, and national legal and regionally, formulating affirmative action and institutional framework on gender equality policies for women in the region along the lines has direct implications for transforming the of commitment with the 1995 Beijing Action gender-based structure of the economy and Platform (an agenda for women’s empowerment), reducing gender inequalities. For this reason, to conduct a gender analysis of trade policy, it is adopting the necessary measures to eliminate necessary to assess the gender policy framework all forms of discrimination against women, and in a country or a region. ratifying the ILO agreements. As noted by Espino (2008), the lack of The Convention on the Elimination of All Forms institutional consideration has spurred civil of Discrimination against Women (CEDAW), society engagement, specifically by unions adopted in 1979 by the UN General Assembly, is and nongovernmental organizations (NGOs) often referred to as an international bill of rights influenced by women’s social movements for women. All the MERCOSUR members ratified and feminist groups. One of the major 48 the CEDAW. Argentina and Brazil ratified the accomplishments (from a gender perspective) convention with a reservation though; they resulting from the participation of unionized declared that they did not consider themselves women in the MERCOSUR integration process bound by article 29, paragraph 1, which involves was the Social and Labour Declaration signed in 49 arbitration. For their part, both Paraguay and 1998. The declaration provided the framework to Uruguay ratified the convention without any guarantee equal rights and working conditions reservations. The MERCOSUR countries also for all workers freely circulating in the member signed and ratified the Optional Protocol to states. It established a minimum set of workers’ CEDAW, which includes the communications rights in the economic integration context, and procedure and the inquiry procedure.50,52 was a significant step in securing equal rights At the intra-regional level, both the 1991 Asunción and access to employment regardless of race, Treaty and the 1994 Ouro Preto Protocol, which nationality, colour, gender, sexual orientation, is considered to be MERCOSUR’s constitution, age, religion, economic- and union-related prioritized the economic provisions associated opinion, economic situation, or any other social with the integration process. They did not include circumstance. Therefore, according to the Social a social agenda, and gender mainstreaming was and Employment Declaration, member states are excluded as well. responsible for guaranteeing non-discrimination in legislation and in practice (Espino, 2008). In 1991, the Common Market Group set up a new working subgroup (in addition to the Another major achievement deriving from the others already set up to evaluate the state of pressure of the women’s movement in the region the member countries in the areas of energy, was the creation of the Specialized Meeting trade, technology, agriculture, transportation, of Women (Reunion Especializada de la Mujer, and policy coordination). The title of the working REM) in 1998. The REM’s mission was to analyse subgroup was Labour Relations, Employment the situation of women in light of national and Social Security, and one of its key objectives legislative regimes in the member states on was to ensure that all member countries ratified equality of opportunities, with the objective

17 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 18 and gender-based violence (Hoffman, 2014). participation, domesticwork, rural education, includespolitical that a broader perspective a limitedfocusto embrace onemployment Gender equality policieshave evolved from ofgenderequality.support number ofrecommendations andregulations in Since 2006,the CMChasapproved agrowing deﬁnes gendermainstreaming inMERCOSUR. equitable policies. Resolutiontherefore, 84 ofensuringgenderequalityobjective andgender the with inalla genderperspective itsactivities Resolution 84requiresto adopt memberstates the situationofwomen;of indicatorson and to ensurethe use consistencymember states in demands methodological harmonization across approve laws ondomesticviolence; Resolution 83 women; Resolution 79requiresto memberstates the MERCOSUR on regionin withanimpact ofprojects andprograms compile alist the REM Platform for Action. Resolution that 37requests the CMCin2000,by the Beijing inlinewith gender were four mandatoryresolutions issued the 2000s. MERCOSURto normsrelatedThe ﬁrst the late1990sandespecially since agenda since become morethe MERCOSUR prominent on regional integration process, genderissueshave the ofgenderin the initial neglect Despite equality (Espino, 2016). recommendationsto movetowards gender states. Itsroles includeproposing policy fromthe membercountries both andassociated of government representatives for genderaffairs Authorities (RMAAM). The RMAAM isconstituted the Women’s MeetingofMinistersandHigh (Espino, 2008). In2011, wasthe REM replaced by the MERCOSURthe composition Parliaments of arena byrecommending male/female parityin the political in women’sparticipation support thematic areato was especially important activities.to expandREM proposed The latter Participation inPublicDecision-Making” –were areas –“GenderandEconomics” and“Women’s scope ofaction.broadenthe REM’s Twothematic to Brazilianthe need delegationindicated In 2005,the during Meeting,Thirteenth the ofcivilsociety.the participation public policiesfor women, also included it but government representatives responsible for member states(Duina, 2007). included The REM cultural development oflocal communities in the social,of contributingto economic, and MERCOSUR to becomeMERCOSUR aproactive institution consideredthe intention indicative of by agreementsthird parties. with This canbe to includeall MERCOSURgender mainstreaming In 2012, aCMCrecommendation also extended 52

equal civil, political, social, and cultural rights for the principleof discrimination andenshrines The 1992constitution ofParaguay prohibits acquired after marriage. management, andadministration ofproperty providing forthe acquisition, genderequality in brought improvements inwomen’srights by considerations. Moreover,the 2002CivilCode be protected regardless ofage, sex, orother allequal employees workandprovidesthat Brazilian Labour Code requires equal payfor haveto socialthe samerights security. The women have equal rights andobligations In Brazil, menand that the constitution states inArgentina. persist the economic lifebetween ofmenandwomen gaps 2.1–important – asindicatedinSection Court. However,these commitments despite the OfficeofDomestic up the Supreme Violence in against the “Victims Violence Program,” andset familyprotection against violence, inplace put treaties,under humanrights passedalawon Argentina, incompliance withitscommitments candidates for legislative elections. Additionally, the listsof femaleof 30percent on participation national politics, withaminimumrequirement ofwomenin the participation to ensure system country aquota to implement the regionfirst in 75(23)).(section Moreover,the Argentina became others, womenandpeoplewithdisabilities treatment for, and same opportunities among grounds 16), ofcompetence only(section the and 14),dismissal (section the on employment 14),jobs (section arbitrary protection against constitution guarantees equal payfor equal the recognitionin ofwomen’srights. The reform avital breakthrough of1994portended the national level, At Argentina’s constitutional agenda (Espino, 2008; Hoffman, 2014). gender equality iscentralthe development to contributed significantly tothe recognition that institutions; andsecond, conferences UN that the networks ofwomenbothinsideandoutside mobilizationthe active andlobbyingofregional two maindrivers: of the result MERCOSUR is first, The institutionalization ofgenderequality in (MERCOSUR,actions 2014; Frohmann, 2017). the designofobjectives, policies, regulations, and and womenbyexplicitlyconsidering genderin regionalthat integration equally benefits men which mandatesregionalto ensure agencies delMERCOSUR Política deIgualdadGénero Guidelines for GenderEquality ( the CMCapprovedIn 2014, the MERCOSUR Policy (Hoffman, 2014). the promotion ofgenderequalityworldwide in Directrices dela 53

), Trade and Gender Linkages: An Analysis of MERCOSUR 4c women and men. It includes provisions on equal de Cuidados), on the basis of which all children, pay for equal work, assistance to women who persons with disabilities, and the elderly have the

head households, and the promotion of women’s right to receive care. In addition, the government module access to public functions. commits to quality of care services through training and regulations (UN Women, 2017).54 Among MERCOSUR countries, Uruguay has made This is a key step to ensure that women are freed the most solid changes in its legal framework to from unpaid responsibilities and can assume guarantee gender equality. The 2004 Uruguay paid work. constitution institutionalized the principle of equal rights to power, authority, and privileges All MERCOSUR countries with the exception of for women and men. In 2007, Law 18.104 on the Paraguay have established National Women Promotion of Equality of Rights and Opportunities Machineries, which are government institutions mandated the inclusion of a gender perspective aimed at promoting the recognition of women’s in the design and implementation of all public rights and mainstreaming gender equality in policies in the country. Following Law 18.104, all areas of public policies. In Brazil, it consists the 2007–2011 First National Plan for Equal of a ministry (Special Secretariat for Policies on Opportunities and Rights was introduced. The Women); in Argentina, it is an institution that plan is meant to tackle gender inequalities in reports directly to the Office of the President employment and in opportunities and treatment (National Women’s Council, NWC); and in in the workplace; sexual harassment; vertical and Uruguay, it is a specialized agency under the horizontal labour market segregation; transition Ministry of Education and Culture (National from informality to formality; and opportunities Institute for Women and the Family). These for enhancing productive capacity in urban and three countries have also introduced gender- rural areas and at the household level (UNCTAD, responsive-budget initiatives as instruments to 2015). support the implementation of international and national commitments on gender equality. Uruguay has also taken the lead internationally These initiatives have been accompanied by in ensuring and protecting the rights of participatory budgeting to take into account domestic workers, who are mostly women and citizens’ needs (including needs specific to form a distinct and highly vulnerable category women) in budget design, especially at the local of workers. Law No. 18.065 (2006) guarantees and municipal level (McBride and Mazur, 2011; domestic workers the same core legal protection Barba and Coello, 2017; Oropeza, 2013).55 as other workers (including a minimum wage and limits on working hours). Rural workers According to the World Bank (2018), in all (many of whom are women) are also protected MERCOSUR countries women and men have under the Uruguayan Rural Workers Act (2008), the same legal rights to own land; however, in which limits their working time (8 hour a day, Argentina and Paraguay discriminatory practices 48 hours a week, and overtime at double pay). de facto restrict these rights for women (OECD In Uruguay, legal provisions for gender equality Development Centre, 2014). Equal inheritance also cover gender-based violence. Since 1995 rights are granted to both sons and daughters domestic violence has been incorporated in the in all MERCOSUR countries, but in practice Penal Code and is considered a crime. In 2002, discrimination still occurs in Brazil, Uruguay, Uruguay passed Law 17.514 on the Prevention and Paraguay (OECD Development Centre, 2014). and Eradication of Domestic Violence, which Similarly, discrimination based on gender in has the merit of broadly defining violence as access to credit is not prohibited in Argentina, “physical, psychological or emotional, sexual Brazil, and Uruguay. In addition, all MERCOSUR and inheritance-related” (UNODC/UN Women countries allow discrimination based on marital 2011). In addition, human trafficking has been status in access to credit (World Bank, 2018). classified as an offense in Uruguay since the adoption of the Migration Act (known as the Paid maternity leave is an important Sexual Rights Initiative) by Parliament in 2008. To protection for the continuity of women’s career support Uruguayan and foreign women victims development and in their equal participation of trafficking, Uruguay included provisions to in the rising sectors under trade liberalization guarantee legal and psychological support, reforms. National laws mandate paid maternity temporary accommodation, repatriation, and leaves in all four countries: 90 days in Argentina, health care (UNCTAD, 2015). 120 days in Brazil, and 98 days in Paraguay and Uruguay, according to the World Bank (2018) and In 2015, Uruguay introduced a Law for the the World Bank’s Enterprise Surveys and World creation of the National Integrated Care System Development Indicators databases (World Bank, (Ley de creación del Sistema Nacional Integrado 2017a, 2017b). In Brazil, an additional 60 days

19 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 20 in place in those countriesin place (UNDP, 2016b). programsequality seal certification are also Uruguay, andBrazil, andvoluntary gender collective bargainingagreements inArgentina, limited. the labour are market discrimination in stillvery to address informal orgender employment to promoteenterprises employment. Efforts and programsto providing statesupport programs, vocationaltraining, skillcertification, throughtraininghas beenaddressed mainly In MERCOSUR, genderinequality inemployment Finance Corporation, 2017). their femalechildren of workers (International orprovide child-care forthe support services legislationrequiringenacted to enterprises responsibilities withemployment, Brazil has addition,to helpwomencoordinate family the babytime basisuntil issixmonths old. In law also allows bothparentsto workonapart- with valid medical certification.the InUruguay maternity leaveto 24weeks canbeextendedup funds fromthe federal government. InParaguay, of paidmaternityleave canbegranted using labour segregation. Inaddition, subcontractor overcoming genderdiscriminationand help raise of awarenessthe importance about the supplychainaswell. These programs can could generate positive spillover effects along programsgender equality seal certification advocated by UNCTAD (2015), of the impact Source: women. forthepoorest tothelabourmarket cesspoint only ac from thesocialsecuritysystemconstitutesamajorsourceofvulnerability, remainsthe informalemployment but still characterized byahighdegreeofinformality, asreflected inlow-quality jobsandalackofregulation. Exclusion the domesticservicesector(i.e., proportionofthefemaleworkforce)is theservicesub-sectorabsorbinglargest proportionofinformaljobs,– showsthelargest ascomparedtotheagricultural andindustrialsectors. Forexample, medium andhighsocio-economiclevels). decades inrecent hasgrownthemost The servicesector–thethat curredat declined(contraryinformality amongwomeninlowsocio-economiccategorieshasnot hasoc towhat tendstoprevailInformal employment amonglow-income womenwithsmallchildren. 20years, Overthelast (e.g.,more flexible home), workcanoftenbedoneat withhomeresponsibilities. compatible iseasiertomakeit soit terms ofeducationlevels, legalcriteria, andavailability ofcapital. Inaddition, workinmicroenterprisestendstobe in microenterprises(definedasbusinesseswithuptofiveemployees) matchrequirementsin becausetheydonot Informality involvesprecariousjobsinbothformalandinformalenterprises. Women havehighrates ofparticipation MERCOSUR was registeredwiththesocialsecurity system. not cesstosocialprotection. Asof2009, oftheemployedpopulation in 30to50percent about workers) lackac that productivity jobs(i.e., employersandemployeesinmicroenterprises, domesticworkers, orunskilledindependent (2008)encompassesbothlow-quality inLatinAmericaasdefinedbyECLAC Informal employment andlow- Box 2 Espino (2016). 56 Genderclauseshave beenincludedin Informal employment Informal 57 As still lacking(Espino, 2016). effectivenessthe genderpoliciesinplaceare of addition, procedures assessment to evaluatethe towards genderequality remain limited. In mainstreaming andeffective policycommitment towards addressing genderissues, gender Overall,there hasbeenprogressthough even 2017). these firmsare ownedbywomen(Frohmann,of their process ofinternationalization,in andmany agency, UruguayXXI, enterprises hassupported Internacional ( andbusinessintelligence activities opportunities other actions,the program providestraining or expandaninternational business. Among and medium-sized enterprises whowantto start womenproducers inmicro,to support aims small, as Women Exporters ( Exportersas Women In 2017, Argentina launchedanewprogram known (Frohmann, sector the export in 2017).participation Uruguay havetakento increase women’s steps internationaltrade onlyindirectly. Argentina and throughpolicies address women’sempowerment the country level. MERCOSUR’s gender equality internationaltrade are at mostlyundertaken to foster in Initiatives women’sparticipation to beeligiblefor inorder opportunities acontract. requiredto comply withequal genderrights and providers andexternal service parties canbe Agencia Argentina de Inversiones y Comercio Agencia ArgentinadeInversionesyComercio , 2017).trade Uruguay’s promotion Mujeres Exportadoras ) that ) that Trade and Gender Linkages: An Analysis of MERCOSUR 4c 3. Trade policy and trade flows: the lead in including a specific gender chapter in A gender analysis trade agreements.60 module As previously mentioned, neither the Treaty of Gender mainstreaming in trade policy is key to Asunción nor the Treaty of Ouro Preto include any ensure that trade benefits both men and women. reference to gender issues. MERCOSUR has signed As discussed in Module 1, mainstreaming gender FTAs with multiple partners: Bolivia (1996), Chile in trade policy implies that the impact of trade (1996), Colombia (2017), Egypt (2010), Israel (2007), on women is assessed at every stage of the and Peru (2005). Additionally, MERCOSUR entered trade policy process, including design, decision- into Framework Agreements with Mexico (2002) making, and implementation. Section 3.1 presents and Morocco (2004).61 Finally, MERCOSUR signed an overview of the evolution of trade policy and Preferential Trade Agreements (PTAs) with India engendering trade policy in the MERCOSUR (2004), Mexico (auto sector agreement, 2002), countries. Section 3.2 continues with a descriptive the Southern Africa Custom Union (SACU) (2008), analysis of the evolution of trade in MERCOSUR, and Colombia, Ecuador, and Venezuela (2004).62, 63 and Section 3.3 provides an empirical analysis of Gender issues, however, did not seem to be under the employment effects of trade, examined from specific consideration in those trade agreements. a gender perspective. As indicated in Section 1, MERCOSUR and the 3.1. Evolution of trade policy and European Union have been negotiating an engendering trade policy FTA since April 2000.64 Since 1995, MERCOSUR- European Union overall relations have been carried 3.1.1. Regional trade policy: Evolution of gender out within the European Union-MERCOSUR considerations58 Framework Cooperation Agreement, signed in One way to make trade policy gender-sensitive December 1995 and in force since July 1999. The is to include gender considerations in the text of European Union-MERCOSUR FTA has the potential trade measures, including trade agreements. In to be an agreement that mainstreams gender the past, reference to gender equality was usually considerations. Gender equality is one of the included in the preambles of the agreements or founding values of the European Union since its mentioned among the cross-cutting matters.59 establishment. In 2017, the European Union Trade However, gender issues are increasingly Commissioner announced that a trade deal with Chile – which is in the process of being negotiated incorporated into trade agreements through – will include a chapter on gender equality. This specific trade and gender chapters, therefore aims to generate a pioneer model that can be increasing the visibility and relevance of the replicated in other trade negotiations.65 issue. The Chile-Uruguay Free Trade Agreement (FTA), signed in October 2016, and the Canada- Since 2009, the European Union’s Directorate- Chile FTA, signed in June 2017 to amend the pre- General for Trade has used Sustainability existing 1997 agreement, are examples of the “last Impact Assessments (SIAs) to assess the generation” agreements that incorporate gender “potential economic, social, human rights, issues more directly (UNCTAD, 2017). Chapter and environmental impact of ongoing trade 14 of the Chile-Uruguay FTA and Appendix II - negotiations” in order to evaluate the European Chapter N bis-Trade and Gender of the Canada- Union-MERCOSUR trade agreement.66 The Chile FTA acknowledge the importance of gender European Union sees these assessments as mainstreaming and gender equality policies for an opportunity for stakeholders in both the sustainable economic development. Accordingly, European Union and in the partner countries the parties to these agreements reaffirmed their to share views on the possible impact of the gender commitments taken within multilateral agreement under negotiations. However, covenants. The parties in both FTAs committed the gender component of the assessment is to carry out cooperation activities to improve minimal, and there is limited evidence that women’s capacity in order for them to benefit gender considerations are actually used in trade entirely from the opportunities arising under negotiations (Viilup, 2015). In order for gender trade integration. They also agreed to establish issues to be adequately addressed, it is important a Trade and Gender Committee to monitor to go beyond an exclusive focus on employment. In implementation of the trade and gender chapter addition, women’s group and other stakeholders (UNCTAD, 2017; Global Affairs Canada, 2017). More need to be included in trade consultations. recently, in November 2017, Chile and Argentina Government officials and trade negotiators signed an FTA that includes a specific chapter should be required to receive adequate training on gender issues as well. It is noteworthy that on gender and trade, and gender experts need it is this new generation FTAs – which includes to be included in the research team carrying out countries from the Global South – that is taking the assessment (Fontana, 2016).

21 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 22 statement onapossiblecomprehensivestatement FTA. their intention to negotiateajoint announced 2017,In October MERCOSUR andCanada agreement was in2009. carriedout The SIAforthe European Union-MERCOSUR concentration in employment. effects industrieswithhighfemale onparticular neutral,”there although besomeadverse might to berelatively“overall isexpected genderimpact the that manufacturing andconcluded sector the the agreement onwomenin of impact assets. The SIAalsothe possible examined to andcontrol over landandotherproductive andlimitedaccess opportunities employment in all MERCOSUR countriesto unequal due vulnerable groupsthe rural among population the SIA,accordingto the most womenare oneof process.that be possiblelosersfrom Moreover, small-scale femalethat anticipated farmers will competition for newarable land. Accordingly, is it couldland conﬂicts ofincreased ariseasaresult new that Gender IssuesinMERCOSUR” notes “Rural Livelihoods, Decent Work Conditions and the assessment.chapters of on The section gender issuesare insteadaddressed inseveral aseparatethere isnot chapterongender; typical approachthe ofsuchassessments,with gender. tradeto includeastand-alone chapteron and apioneeringFTAfact one the ﬁrst is because it FTA betweenUruguayandChile, whichisin the 2016 this direction is evidencein Supporting MERCOSUR countries having similarintentions. gender-responsive. mayalso beexplainedby It tradehavingto maketheir committed policies the Europeanto bothCanada Union and due ofview.point besimply This outcome maynot to bemoreCanada promising seem fromthis texts,the newFTAs the European with Unionand to mainstreamattempt them into the legal to genderequality considerations anddidnot makesigned byMERCOSUR did not reference In sum,tradethe previous while agreements representation across professions. training,education and andproportional gender issues includingpayequity,to equal access MERCOSURtrade region aswell andgender and humanrightsthe bothinCanada andin the FTA promotes equality, non-discrimination, the note,Accordingto Canadathat shouldensure including humanrights andgenderequality. to address anumberofissues, included arequest forthe Canada-MERCOSUR FTA. The notealso Association issuedanotestatingitssupport Followingthe announcement, the Canadian Bar takes onboard genderequality considerations. to negotiate opportunity a trade agreement that This possiblenewagreement offers another 68

67 Consistent 69

Enterprises stipulates that at least 25 per cent of 25percent least at that Enterprises stipulates inMicro,Project Small andMediumSized Paraguay’s Entrepreneurship Development ininternationaltrade.women’s participation anational programmecarry out to strengthen the International from support Trade Centreto international markets. Paraguay hasrequested to compete inregionalto women and guidance chains anddomesticmarkets, andproviding strategiesto give rural womenaplaceinvalue forto credit businessundertakings, driving the privateand sector, includefacilitating access leading officials fromthe central government the Ministryforby Women, with inconjunction production chains.this respect, In led the actions the economic inclusionofwomenintoand acrossto promote anumberofareas fairness implementing gender-aware publicpolicies the economic ofwomenby empowerment Trade,” Paraguay presents itseffortsto increase to gender.the headingof“Women Under and The 2017 TPR for Paraguay devotes asub-section on financial education. income adults, includingwomen, inprogrammes governmentto includeawiderrange oflow- thereTPR was referenceto effortsthe federal by involved inagri-industry. Second,the 2017 in small-scale producers,to women especially but programmeto provideto isdesigned credit to Strengthen HouseholdAgriculture. This federal government referencedthe Programme programmescredit madeavailablethe by (TPR),the discussionofagricultural where wasthe 2013 The first in Trade Policy Review twice).issues (genderhasonlybeenmentioned haveto dateincludedlimitedreference to gender Similarly, Brazil’strade national policydocuments resources. and encouragethe sustainable useofnatural the vulnerabilitythe poorrural of population, to promote genderequality,the objective lessen referenceto arural having development project Industrial Planforthe 2010–2020period, andwith the Strategicdiscussion on Agri-Food andAgro- from agenderperspective. trade policiesofMERCOSUR membercountries Mechanism (TPRM) to evaluate the national Trade Organization (WTO) Trade Policy Review the government associatedwith reports World willbecarriedout. partners the uses This section with bilateral, regional, andmultilateraltrading tradetradewhich definehow and negotiations specific declarationstrade, andguidelineson tradeNational policyrefersto governments’ Nationaltrade policy 3.1.2. 2013, review forthe last In Argentina, in conducted

gender wasthe onlymentioned within 70

Trade and Gender Linkages: An Analysis of MERCOSUR 4c the beneﬁciaries of the project must be women. With respect to international trade, reductions The Project to Strengthen and Develop Micro- in CETs were much more gradual. By 2006,

businesspeople, an innovative project to produce average CETs ranged between 12 and 20 per cent module goods and services, also has a strong gender (depending on the goods considered) (Borraz, focus. Rossi, and Ferres, 2011). As of 2018, CETs varied between 0 and 35 per cent. Finally, the 2018 TPR for Uruguay does not include any reference to either gender or women. The Table 7 presents merchandise and services exports previous TPR, dating 2012, referred to the need and imports as percentages of GDP for MERCOSUR to invest in activities that generate quality jobs member countries in the post-2000 era. The especially for groups experiencing the most analysis compares 2000–2006 with 2007–2013, severe employment problems, including young as the legislation of MERCOSUR indicated that a people and women. common market would be realized by 2006. The table shows that merchandise exports as a share 3.2. Changes in trade structure of GDP increased notably between the two periods in Paraguay and, to a lesser extent, in Uruguay, This section examines the changes in trade while slowly declining in Argentina and Brazil. structure concerning product groups and trading The decline in merchandise exports in the largest partners over the course of trade liberalization economies of the region was largely driven by the and regional integration. This analysis provides global ﬁnancial crisis of 2008–2009. a context to better appreciate the gender implications of MERCOSUR’s development, which With the exception of Brazil, in all MERCOSUR are discussed in Section 3.3. After its creation in members, and more notably in Paraguay and 1991, MERCOSUR gradually eliminated tariff and Uruguay, merchandise imports as a share of GDP non-tariff restrictions in intra-MERCOSUR trade. increased substantially between 2000–2006 By 1996, intra-regional trade was substantially and 2007–2013, exceeding the average for South liberalized.71 Despite trade liberalization within America. On the other hand, services exports the bloc, however, intra-MERCOSUR exports did as a share of GDP showed a small expansion in not pick up. Intra-MERCOSUR exports declined Argentina and Uruguay, while slightly declining from 19 per cent of total trade in 1995 to 11 per in Brazil and decreasing considerably in Paraguay. cent in 2002 and then increased again to 14 per Similarly, except for a decline in Paraguay, cent by 2007. This is explained by the economic services imports as a share of GDP did not change crises in Brazil and Argentina. As of 2016, intra- signiﬁcantly in other member countries as well regional trade was 13 per cent.72 as in MERCOSUR as a whole.

Table 7 Trade ﬂows (per cent of GDP) Merchandise exports Merchandise imports Services exports Services imports

2000–2006 2007–2013 2000–2006 2007–2013 2000–2006 2007–2013 2000–2006 2007–2013

Argentina 17.55 16.25 10.23 12.73 2.78 3.02 3.69 3.45

Brazil 11.97 10.14 8.89 8.89 1.76 1.61 2.73 2.97

Paraguay 34.25 46.96 39.95 45.06 8.22 4.14 4.84 3.53

Uruguay 17.28 20.26 18.31 23.19 6.54 6.99 4.81 4.59

MERCOSUR 15.52 13.38 10.31 10.80 1.99 1.82 3.12 3.25

Source: UNCTADStat database, available at http://unctadstat.unctad.org/EN/ (accessed in November 2017).

Figure 11 presents the changes in the composition in the period from 2001–2015. Similarly, the of MERCOSUR merchandise exports and imports export shares of resource-based manufacturing by product group based on the Lall classiﬁcation products increased as well during this period, for the post-2000 era.73 Primary products, even if to a lesser extent. On the other hand, the resource-based manufacturing, and medium- export shares of low-, medium-, and high-tech tech manufacturing constitute the largest manufacturing in total merchandise exports portion of MERCOSUR merchandise exports, declined. Among those, the percentage of low- while the shares of low-tech and high-tech technology manufacturing, whose share in total manufacturing are relatively small. Furthermore, merchandise exports was 8.5 per cent on average, the percentage of primary product exports in showed an almost 50 per cent decrease in 2011– total merchandise exports signiﬁcantly rose 2015 compared to 2001–2005.

23 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 24 products steady. remained somewhat increase. ofothermanufacturingThe imports –showed aslightthe region’sshare imports of manufacturingthe largest –whichconstitutes share ofmedium-tech2015,the import while slightly declinedbetween2001andimports imports,product high-techmanufacturing the composition of manufacturingterms of In their exports. the value-added Caribbean –boost content of – andmore generallythe LatinAmericaand (2017b),by ECLAC MERCOSURthat isurgent it concentrated incommodities; asindicated vulnerability. MERCOSUR’s exports, infact, are arable land)andisassociatedwitheconomic to deforestation(especially due to expand environmentalto important led consequences Asian countries. This development modelhas the People’sfrom Republic ofChinaandother the region isespecially driven byhighdemand agricultural andagro-industrial from exports ofcorn andmeat.exporters inThe growth of soybeans, respectively,they also are and key producersthird-largest the world’ssecond- and inMERCOSUR.imports Brazil andArgentina are total merchandise of portions significant based manufacturingthe most constituted high-tech manufacturing, andresource- time,of medium-techmanufacturing, the otherhand,On overthe sameperiod products andresource-based manufacturing. to primaryhigh-technology manufacturing shiftedexports from low-, medium-, and Overall, between2001and2015MERCOSUR Source: Figure 11 40 20 50 30 45 25 10 35 15 0 5 UNCTADStat database, available (accessedinDecember2017). http://unctadstat.unctad.org/EN/ at

40.2 Primary Sectoral composition ofMERCOSUR trade withtherestofworld inthepost-2000era products 42.5 45.3 Resource-based 24.7 manufacturing 26.5 26.8 Low-tech 8.5 andimports) (per centsharesintotalmerchandiseexports manufacturing 5.8

XOT IMPORTS EXPORTS 4.3 Medium-tech manufacturing 18.4 17.8 2001-2005 16.9 High-tech manufacturing 5.5 4.4 3.2 Unclassified 2.7

3.1 2006-2010 Primary 3.5 products calculations based on the UNCTADStatcalculations basedon MERCOSUR trade. According to UNCTAD’s technological upgradingindicative of inintra- and medium-technologyproducts, whichis based manufactures were replaced bylow- intra-MERCOSUR trade over time. Resource- the composition in ofmerchandise exports integration processto have seems changed trade calls for attention. tradeThe MERCOSUR However,the limitedrole ofintra-MERCOSUR line withgeneraltrends aroundthe world. People’s Republic ofChinaandIndia, isin Asian developing countries,the particularly NAFTAthe European and Union. The riseof those from aswell MERCOSUR imports from otherregions shrank, includingintra- shares2001 and2015,the import while developingthan doubledbetween Asiamore Similarly, from merchandise imports the worldhave of the rest variedto overtime. ofMERCOSURthe exports figure) that shows theto otherworldmarkets (“Other”in exports Moreover,the behaviourthe shares of of Agreement (NAFTA) between 2001and2015. AmericanFree the North members of Trade marketstraditional ofdominance of export ones) increased significantly,the replacing Republicthe largest ofChinaandIndiabeing developing economies inAsia(thePeople’s and 2015.to MERCOSUR merchandise exports 2010,then decreased slightly between2011 increased fromto 2006– exports 2001–2005 intra-MERCOSURthat shows It merchandise trading between2001and2015.main partners compositiontrade ofMERCOSUR withits Figure 12illustratesthe geographic 14.4 14.3 Resource-based 14.4 manufacturing 17.7 Low-tech 16.8 manufacturing 17.9 2011-2015 8.6 Medium-tech 10.0 manufacturing 10.0 37.5 High-tech 38.0 manufacturing 38.7 20.3 Unclassified 19.0 17.9 1.4 1.8 1.1 Trade and Gender Linkages: An Analysis of MERCOSUR 4c

Figure 12 Geographic composition of MERCOSUR exports and imports with main trading partners module 2001-2005 2006-2010 2011-2015

35 32.3 32.4

30 28.2 24.4 24.2 23.6

25 23.4 22.5 22.2 21.1 20.8 20.1 20.0 20.0 19.3 19.0 19.6 18.8 18.7 18.6 18.3

20 18.0 17.7 15.7 14.8 13.9 13.9 15 13.5 12.8 12.3

0 Other Other NAFTA NAFTA Developing Developing MERCOSUR MERCOSUR economies: Asia economies: Asia European Union European Union

EXPORTS IMPORTS

Source: UNCTADStat database, available at http://unctadstat.unctad.org/EN/ (accessed in December 2017). Note: NAFTA: North American Free Trade Agreement. database, the shares of primary products concentration of merchandise exports, followed and resource-based manufacturing in intra- by Uruguay. According to available data as of MERCOSUR merchandise exports on average 2015, exports from Paraguay are dominated by decreased from 46 per cent in the early 2000s commodities such as soybeans, food products, to 36 per cent over 2010–2015. On the other and electricity, while meat products, rice, hand, over the same period of time the shares and other food products constitute most of of low- and medium-technology manufactures Uruguay’s exports.75 Argentina and Brazil have increased from 45 to 57 per cent. lower export concentration indexes, but since the beginning of the 21th century there has been Primary products and resource-based an increase in export specialization (especially manufactures continue to dominate in Brazil). According to the Observatory of MERCOSUR exports to global markets. In 2015, Economic Complexity, soybeans and soybean- 58, 75, and 80 per cent of MERCOSUR exports related products, corn, and delivery trucks make to NAFTA, the European Union, and developing up most of Argentina’s exports, while soybeans, Asia, respectively, were composed of primary iron ore, raw sugar, crude and reﬁned petroleum, products and resource-based manufactures vehicle parts, and telephones constitute the top according to UNCTAD’s calculations based on primary exports of Brazil.76 the UNCTADStat database. Conversely, 67, 61, and 63 per cent of MERCOSUR imports from Paraguay and Uruguay have shown the NAFTA, the European Union, and developing highest degree of concentration in their Asia, respectively, were medium- and high- merchandise imports in the post-2000 period technology manufactures. This trade pattern is as well. In MERCOSUR, however, imports are indicative of limited industrial competitiveness on average less concentrated than exports. achieved by MERCOSUR countries. With the exception of Paraguay, the import concentration index has increased, though To evaluate the degree of transformation in a minimally, from 2000–2004 to 2010–2014 for country’s trade structure, it is useful to use the all MERCOSUR countries. This indicates that 74 concentration index. Figure 13 presents the merchandise imports have tended to specialize concentration index for MERCOSUR exports and during this time. imports between 2000–2004 and 2010–2014, which helps evaluate whether in recent years Tariff policy is a key trade policy, and in this there have been changes in the concentration regard it is useful to track the changes in of exports and imports since the beginning of the applied tariff rate (trade-weighted) for the 2000s. Paraguay has the highest degree of MERCOSUR countries over time.77 As shown

25 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 26 development-indicators (accessedinDecember 2017). Source: Source: in MERCOSUR countries. The increase isclose rates for manufacturing products increased time,of except for Paraguay, averagetariff 2015.the otherhand, On overthe sameperiod remained relatively steadybetween2005 and the MERCOSURprimary products members in in figurethe average 14, tariff applied rate for Figure 14 Figure 13 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 10 12 0 2 4 6 8 World Bank, World Development Indicators database, available https://data.worldbank.org/data-catalog/world- at UNCTADStat database, available (accessedin December 2017). http://unctadstat.unctad.org/EN/ at retn rzlPrga rga retn rzlPrga Uruguay Paraguay Brazil Argentina Uruguay Paraguay Brazil Argentina 1.7 Applied tariff rates for andmanufactured primary products inMERCOSUR countries . 1.4 1.4 Argentina 1.5 . 1.5 1.5

Brazil concentration andimport Export index inMERCOSUR countries 2.0 XOT IMPORTS EXPORTS rmr Manufacturing Primary

Paraguay (trade-weighted averages; percentrate) 1.1 2000-2004 1.4 Uruguay 1.2 2005 1.4

1.6 MERCOSUR 2010 5.7 the microeconomicthis module. analysis in the interpretationthe resultswill guide of of tariffThe direction of changeinapplied rates the global economic crisis.the worldduring protection of fromthe rest increased import inArgentina.cent to indicateThis seems inUruguayandexceedsto 30percent 50per

6.8 Argentina 2010-2014 8.6 2015 9.4 Brazil 10.0 10.3

5.8 Paraguay 4.7 5.4 Uruguay 4.8 5.6

6.2 MERCOSUR Trade and Gender Linkages: An Analysis of MERCOSUR 4c

3.3. Employment effects of trade integration a study undertaken by Juhn, Ujhelyi, and Villegas- Sanchez (2014) found that NAFTA had a positive As described in Volume 1 (UNCTAD, 2014a), impact on female blue-collar workers in Mexico module there are multiple transmission channels that as a result of technology upgrading. explain the nexus between trade openness and gender inequalities. Liberalization can be a Building on these recent developments powerful instrument to generate new economic in the empirical economic literature, this opportunities for women, but in certain cases it section provides an empirical assessment may also exacerbate existing gender biases and of the relationship between trade and discrimination. gender in MERCOSUR countries using both a macroeconomic and a microeconomic analysis. Module 2 presents the predictions of trade The macroeconomic analysis investigates theory on labour market outcomes. From how trade openness has affected the sectoral a theoretical viewpoint, trade reforms may distribution of female employment at the affect employment through a change in the country level over the past 25 years in the production structure of the economy, as some MERCOSUR countries. The microeconomic sectors tend to expand due to the development analysis consists of an empirical investigation of new export opportunities and others may at the firm level of the impact of tariff changes shrink due to stiffened import competition. on the female-to-male employment ratio in Depending on the gender distribution of the MERCOSUR firms in the manufacturing sector. workforce across the different sectors of the economy, trade liberalization can significantly 3.3.1. Macroeconomic analysis affect gender inequalities in the workplace. If the shrinking sectors are female-intensive, then the A macroeconomic analysis investigates how trade reforms are likely to have negative effects women in the workplace have been affected by on gender inequalities. Conversely, if women are trade liberalization in the MERCOSUR countries. preponderantly found in the expanding sectors For that purpose, this analysis replicates the following the reforms, trade liberalization may study undertaken by Bussmann (2009), with reduce gender inequalities. updated data specific to MERCOSUR countries.78 In his study, Bussmann tested and empirically An additional way that trade openness may confirmed two hypotheses that are of interest affect gender inequalities in the workplace for the present analysis. The first hypothesis is through competitive pressure induced by refers to the presence of absolute welfare gains trade reforms that may render discrimination for women; the second hypothesis focuses on too costly for employers and therefore reduce changes in the gender gap following trade discrimination against women. Another liberalization. With regard to the first hypothesis, transmission channel between trade and following the Heckscher-Ohlin model,79 trade is gender occurs through technological upgrading expected to be relatively more beneficial to the stimulated by hardened competition with factors of production that are abundant in a foreign firms. The pro-competitive effects of country. In the case of developing countries, trade trade liberalization can incentivize firms to should thus favour female employment, under upgrade their technology, thereby reducing the assumptions that developing countries are the need for physically demanding skills and in relatively more endowed with low-skilled labour turn improving employment opportunities for and that women constitute an important share women relative to men. of the low-skilled workforce. Based on the second In light of these multiple transmission channels, hypothesis, in developing countries the shares of the relationship between trade reforms and women working in the industrial and agricultural gender employment inequalities is context- sectors should increase with trade integration specific and cannot be generalized. In order and in a disproportionate way compared to men. to determine whether trade liberalization is This hypothesis relies on the fact that developing beneficial or detrimental to gender equality, it countries have a comparative advantage in is necessary to proceed with empirical analyses. labour-intensive goods and that women, as Based on a sample of 134 countries, Bussman unskilled workers, should see a disproportionate (2009) uncovered that on average trade increase in their employment opportunities in openness has been correlated with an increase in the industrial sector as a result of the attempt by the number of women employed in the services firms to keep costs low. The expectation that trade sector in developed countries, while in developing integration should be correlated with an increase countries it has been correlated with an increase in the share of female workers in the agricultural in the number of women working in industrial sector is based on the observation that developing and agricultural jobs. At the microeconomic level, countries tend to have a comparative advantage

27 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 28 panel dataset spanningfromto 2016,panel dataset 2000 this across sectors. Buildingonacomprehensive number ofemployedworkers, overallthen and total the of the share ofemployedwomenout the femaleon share, employment definedas tradetrade openness(asameasure of integration) of the impact This empirical analysis estimates market. the formalto jobsin the subsistencelevel labour and inducesashift from informal fieldworkat trade liberalizationthat expected boostsexports ofagricultural products.the export in turn, In is it turn to out be to a threat local employment, may increased imports that could beexpected it in MERCOSUR. With regardto imports, although of jobsfor womeninbothindustryandservices haveimports contributedthe shareto increasing and bothexports that These results imply andimports.services) isdriven bybothexports (industryand two sectors tradethe opennessin A1.1 inAnnex1,the effect of that the results show GDP andimport-to-GDP ratios,table asshownin tradeIf opennessisdecomposed into export-to- the share of womenemployed. correlated witha1.8percentage increase point in sector,trade increase a10percent in opennessis total employment. women in the services In a 1.2percentagethe share increase point of in tradeincrease in opennessisassociated with agricultural sector. Inindustry, a10percent and services, isfoundthe on noimpact but tradeof opennessispositive for industry the individual sectors, Looking at the impact confidence interval level.the 10percent at tradethe increasea 10percent the ratio openness index(measuredtrade in by of to GDP). flows The dashedlinesrepresentthe Note: World Bank’s World Development Indicators(https://data.worldbank.org/data-catalog/world-development-indicators). Source: Figure 15 The diamondsrepresentthe increase inpercentage the female points in share correlated ineachsector ofemployment with 0.0 0.5 1.0 1.5 2.0 2.5 3.0 UNCTAD calculations database basedonILOStat (available www.ilo.org/ilostat, at accessedon2February 2018),the andon Impact of an increase intrade ofanincrease Impact opennessonthefemale across sectors shareofemployment vrl giutrlIdsr Services Industry Agricultural Overall 0.5 in MERCOSUR (percentage countries points) 0.0 total onaverage employment inall sectors. a percentagethe female increase point in share of tradethe opennessindexiscorrelated witha0.5 of isrelativelyall sectors low: increase a10percent in figure 15. The averagetrade of opennesson impact the estimationareThe results summarized of in presented inmore detailinAnnex1. trade integration process. The methodologyis labourthe forceto beingattributable without have might thefemalethat factors impacted takevariablesto into account otherpotential analysis also incorporates anumberofcontrol share offemale employment. inGDPispositively correlatedthe imports with the increasingThis canexplainwhy share of are female-intensive.that jobs thereby support openness could increase local production and intermediate goods) resulting fromtrade greater ofinputs(rawcheaper imports materials and/or the World BankEnterprise (World Surveys Bank, the economy. Basedonpaneldataprovided by of menandwomenacross different of sectors tradeof liberalizationthe distribution dependon discussed inModule2, effectsthe employment inequalities inMERCOSUR countries. As tariffof liberalization ongenderemployment microeconomic to evaluate analysis the impact COMESA (UNCTAD, 2017), presentsthis section a tradeto devoted and genderlinkages in teaching material the (2014) andModule4of Following Juhn, Ujhelyi, and Villegas-Sanchez 3.3.2. Microeconomic analysis 1.2 1.8

Trade and Gender Linkages: An Analysis of MERCOSUR 4c

2017b), this analysis tracks the changes over speciﬁcally, sectoral tariff variables are calculated for time in the female-to-male employment ratio the main regional groups (Latin American countries,

within manufacturing firms attributable to tariff North America, European Union, and the world) module changes in the manufacturing sector.80 to test whether the impact of tariff liberalization differs across markets due to differences in traded This empirical analysis introduces a distinction products or specialization patterns. between export and import tariffs to refine the analysis of the impact of trade liberalization on Because multiple factors could influence the gender inequalities in the workplace. Changes evolution of female-to-male employment ratios in tariffs, in fact, can have different implications over time, this empirical analysis takes into depending on whether import or export flows account a set of firm-level characteristics (such are affected. For instance, a decrease in export as the status of foreign ownership, the level of tariffs prompts more productive firms to enter sales, the presence of women among the owners the export market and induces firms to upgrade of the firm, or the use of foreign technology), in their technology to become more competitive.81 addition to country- and industry-specific effects, As a result, technological progress may lower the to take into account characteristics at the firm need for physically demanding skills and modify level that might affect gender labour outcomes. the distribution of employment across gender at The estimation procedure is presented in detail in the expense of male blue-collar workers, but to Annex 1. Descriptive statistics are presented in A1.2. the benefit of female blue-collar workers. On the other hand, a decrease in import tariffs induces Figures 16 and 17 illustrate the evolution of the more competition for domestic firms, which share of female workers in each MERCOSUR may either lead to the adoption of innovative country. The figures show that between 2006 and technological processes or the withdrawal of 2010 in all countries – with the exception of Brazil the least productive firms from the market, with – there was a decrease in the share of women adverse effects on the most vulnerable workers. employed in exporting manufacturing firms over time in production and non-production Two further distinctions are made in the course tasks. The figures also show that in all MERCOSUR of this empirical analysis. First, female-to-male countries, the share of female workers in non- employment ratios are computed distinctively for production tasks changed by a greater amount production and non-production tasks to provide than in production tasks. Over the period some insights into the possible influence of considered, non-production tasks were also technological upgrading.82 Second, the impact of more relevant for women’s employment. In 2010, tariff changes is first evaluated considering the on average women accounted for 31 per cent world as a partner, and in a second step the different of production workers and 41 per cent of non- trade partners are considered separately. More production workers in MERCOSUR countries.

Figure 16 Share of female workers in exporting ﬁrms in production tasks (per cent) 2006 2010 45

0 Argentina Brazil Paraguay Uruguay

Source: UNCTAD calculations based on the World Bank’s Enterprise Surveys, available at http://www.enterprisesurveys.org/. Note: For Brazil, the initial year is 2003 and the ﬁnal year is 2009.

29 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 30 changes in import tariffs, changes inimport whilefigure 19presents of Figure 18illustratesthe estimatedimpact are summarized infigures 18and19.table A1.4) The corresponding results (presented inAnnex1, the effecttariffassess of changesacross countries. each country isintroducedto the estimation into variablethe previous decomposing coefficient for to checkforIn orderthis possibility, aninteractive marginal effects cancelout. opposite direction, whenaveraged,that so the in onedirection andothersare affectedthe in somecountriesthe groupthat are in affected tasks. Yet,this absence ofeffect mayalso imply ratios inbothproduction andnon-production tariffs the female-to-male on export employment tasks,in non-production andofareduction in tariffsthe female-to-male on ratios employment effectbe nosignificant ofareduction inimport countries isconsidered asawhole,to there seems the otherhand,On the group when ofMERCOSUR American countries. to goodsoriginatingfrom otherLatin applied tariff reductions the effectdriven by ofimport the results,Based on to beessentiallythis seems ratiotasks, inproduction all elsebeingequal. the female-to-male in 17 percent employment products iscorrelated withadecrease ofaround tariffthe decreasepoint imposedonforeign in in MERCOSUR. Onaverage, a1 percentage male ratio employment tasks inproduction tariffs hadanegative effectthe female-to- on liberalization through areduction inimport onaverageA1.3 inAnnex1)revealthat trade table The estimationresults in (reported Note: Source: Figure 17 For Brazil,the final yearis2009. the initial yearis2003and 20 25 30 35 40 45 10 15 0 5 UNCTADthe calculations basedon World Bank’sEnterprise Surveys, available http://www.enterprisesurveys.org/. at retn rzlPrga Uruguay Paraguay Brazil Argentina Share offemale workers innon-production tasks (percent) firms inexporting 2006 hurt women in non-production tasks. womeninnon-production hurt liberalization onaverage hasdisproportionately the stiffened competition induced byimport to 40percent.is close that These results suggest Argentina;the corresponding figure for Paraguay female-to-male ratiotasks in innon-production correlatedthe withadecrease in of21percent the worldis of the rest from goods imported the average decreasepoint in tariff imposedon countries). a1percentagethat The results suggest relationship is foundthe otherMERCOSUR in for Argentina andParaguay (nosignificant tariff liberalizationappears withimport tasks,in non-production anegative correlation Regardingthe female-to-male ratio employment in Paraguay. tasks isassociated withover increase 40percent female-to-male ratio employment inproduction the averagetariff, decreasepoint in import the in Uruguay. Incontrast, following a1percentage reduced inBrazil by15percent and25percent to-male ratio employment tasks is inproduction the averagetariff,decrease in import the femaleof magnitude, following a1percentage point effectsignificant isfound inArgentina.terms In relationship isreversed inParaguay, andno tariff liberalization inBrazil andUruguay,the tasks is negatively correlated withimport to-male ratio employment inproduction As showninfigure 18,the female- although and types of tasks. the effectstariff ofa variation across countries tariffs. The figuresthe heterogeneity confirm of ofchangesinexport the estimatedimpact 2010 Trade and Gender Linkages: An Analysis of MERCOSUR 4c

Figure 18 Estimated impact of a 1 percentage point decrease in import tariffs on female-to-male

employment ratios (per cent) module

Production tasks Non production tasks

0 Brazil Paraguay Uruguay Argentina Paraguay

-20

-40

-60

Source: UNCTAD calculations based on the World Bank’s Enterprise Surveys (http://www.enterprisesurveys.org/) and World Integrated Trade Solution (http://wits.worldbank.org) databases. Note: The diamond represents the average impact of a 1 percentage point decrease in the average import tariff imposed on goods originating from the rest of the world on the female-to-male employment ratio. The dashed line represents the confidence interval for the coefficient (at the 10 per cent level). Only the statistically significant coefficients are reported.

Figure 19 Estimated impact of a 1 percentage point decrease in export tariffs on female-to-male employment ratios in production tasks (per cent)

0 Argentina Brazil Paraguay Uruguay

-20

-40

-60

-80

-100

-120

Source: UNCTAD calculations based on the World Bank’s Enterprise Surveys (http://www.enterprisesurveys.org/) and World Integrated Trade Solution (http://wits.worldbank.org) databases. Note: The diamond represents the average impact of a 1 percentage point decrease in the average export tariff imposed on goods originating from the rest of the world on the female-to-male employment ratio. The dashed line represents the confidence interval for the coefficient (at the 10 per cent significance level). Only the statistically significant coefficients are reported; as the coefficients for non-production tasks were not significant, they are not reported here.

31 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 32 in the workplace inMERCOSUR countries.in countries significantly affect genderinequalities tradingthe environment withneighbouring Overall, changesin that these results suggest the mechanismsinvolved.understand go beyondthis speculative hypothesis and researchFurther to shouldbeundertaken leading to defeminisation of the workforce. relativelyattract more male workers, potentially attractivetherefore workingconditions and the biggest, or efficient most providethey might Americancountriesto North the are exporting Manythis effect. factors canexplain Iffirms the female-to-malewith ratio. employment American countries isnegatively correlated tariffsthe faced byMERCOSUR firmsinNorth ratio. adecreaseThe results in that also show the female-to-maledecrease) in employment correlated increase witha25percent (26percent tariffs faced in(by)LatinAmericancountries is 1 percentage the average in (import) point export the opposite. are and exports Adecrease of ratio,employment the effects but onimports effectthe female-to-malehad asignificant on liberalization withneighbouringcountries trade that The estimationresults indicate 4a (UNCTAD, 2018) Eastern African Community, asshowninModule for MERCOSUR arethe also foundthe caseof in similar tothose of the microeconomic analysis for firms(seeModule3). exporting Findings favoured asasource ofcompetitive advantage gender wage gap,tasks are womeninproduction of competitive advantage.typical the to Due the genderinequalities asasource of in light or additionally, couldthis result beinterpreted takentypically onbymale workers. Alternatively, demand for are physicallythat demandingskills upgrading byfirms,thereby resulting inlower authors,technology this could beexplainedby tasks. inwhite-collar not but the Accordingto of womenimproves inproduction-relatedtasks, (2014),the relative employment whofoundthat in linewithJuhn, Ujhelyi, and Villegas-Sanchez ratiotasks. innon-production These results are been foundthe female-to-male on employment tariff changes has effectNo significant ofexport Argentina, Paraguay, andUruguay, respectively. the female-to-malein ratio employment in correlated witha33, 27, increase and35percent tariff faced is the destinationmarket in export decrease of1percentagethe average in point tasks forproduction all countries Brazil. but A the female-to-malein ratio employment in correlated improvement withasignificant firmsis byexporting the destinationmarket dutiesfaced in the export adecrease in that The results summarized infigure 19indicate services (no impact isfound inagriculture). (noimpact services shareswomen’s employment inindustryand foundto have on small apositive impact but a macroeconomic level,trade openness is and genderinequalities inemployment. At tradeof integration onwomen’semployment microeconomic analyses to evaluate the impact This modulehasusedbothmacroeconomic and participation. broader dimensionsofeconomic andpolitical an exclusive focusto encompass onemployment policies have also progressively expandedfrom the early2000s.MERCOSUR in Genderequality to beofficially mainstreamed in gender started social movements andfeminist groups – civil society–driven especially bywomen’s considerations. ofpressure Asaresult from integration process prioritized strictly economic the 1990s.end of Initsearlyphases,the MERCOSUR ignoredthe genderissuesuntil employment. are overrepresented ininformal andlow-skilled forthe lion’sshare ofunpaidlabour work, and stereotypes. Women continueto beresponsible traditionalare embeddedin genderbiasesand wage gapremains significant. These disparities rate ofmenandwomen,the urbangender and considerablethe labour force gapin participation region. Inall MERCOSUR countries,there isa the MERCOSUR in Gender inequalities persist remains slow. signs ofeconomic recovery, economic growth but China. More recently, MERCOSUR hasshown the People’s in economic Republic growth of slowdown ofexternal demand, ledbyslower to adownturn incommoditydue pricesanda MERCOSUR experiencedaneconomic decline followingthe 2008–2009global financial crisis, Republic ofChinaandIndia).the years In sold to developing Asia (especially the People’s resource-based manufacturing, increasingly MERCOSUR iscentred onprimaryproducts and de-industrialization. from ofexports The basket have all been experiencingaprocess ofearly inall MERCOSURsector countries, whichinfact the leadingeconomic constitutes Services economies.the smallest and Uruguayare economy, followed byArgentina. Paraguay development. Brazil represents the largest differ substantially insize, wealth, andhuman MERCOSUR iscomposedthat of economies the SouthernCommonin (MERCOSUR). Market tradethe interplayexamine between andgender the coreteaching manual (UNCTAD, to 2014a) the concepts presentedThis moduleapplied in Conclusionsandpolicysuggestions 4. Trade and Gender Linkages: An Analysis of MERCOSUR 4c

Based on a microeconomic analysis, the effects to trade, in addition to special programmes for of import tariff liberalization on female-to- women as exporters, it is critical that gender

male employment ratios have been on average be mainstreamed in all trade promotion module negative, but they have varied across countries organizations to ensure gender equality in and types of tasks. In Brazil and Uruguay, the economic opportunities (Frohmann, 2017, 2018). gender employment ratio has been negatively Towards this goal, trade agreements should affected in production tasks; in Argentina, the include – in addition to a specific chapter on effect has been negative in non-production tasks; gender – a gender perspective in the treatment and in Paraguay, there has been a positive impact of all individual economic issues discussed by on production tasks, but a negative impact on FTAs. non-production tasks. With regard to export To support a gender-based analysis, it is tariff liberalization, the results indicate that important to strengthen the collection of a decrease in export duties has had a positive gender statistics, including not only sex- impact on the female-to-male employment ratio disaggregated indicators but also data on issues in production tasks in all MERCOSUR countries that specifically affect women (and men) and except Brazil. Reductions in export tariffs have the relations between men and women (ECLAC, not affected the female-to-male employment 2017c). This is critical to inform the design of ratio in non-production tasks. public policies, monitor their effectiveness, and In conclusion, as a net effect, the process of potentially introduce the necessary corrections. regional integration has only contributed to Trade policies can play an important role in spurring women’s employment and reducing either consolidating traditional export patterns gender inequalities in employment to a limited or contributing to structural change in the degree. In particular, the empirical results context of measures supporting technological clearly indicate that trade openness has not innovation, skill upgrading, and knowledge helped generate white-collar jobs for women. In diffusion. In the case of MERCOSUR, Espino contrast, trade openness in MERCOSUR seems to and Underhill-Sem (2012) indicate that as have contributed to reinforce the role of women regional integration advances, it is important to as a source of competitive advantage. strengthen universal social protection systems There is by now broad consensus that closing the and tackle disparities in access to vocational gender gap is key not only for social welfare, but training and employment. With regard to also for a country’s growth in monetary living work, vocational training, skill certification, and employment support for women are useful standards (OECD, 2017). As a medium- and long- tools. Countries in the MERCOSUR region term goal, ensuring that regional integration have been active in introducing these types of processes in MERCOSUR and elsewhere do programmes, especially in the context of poverty not reinforce gender inequalities requires reduction strategies. These efforts are valuable that regions move away from dependence and should be strengthened, especially with on primary products and commodities. respect to their gender focus (Espino, 2016).83 This type of specialization, in contrast to industrial production, makes countries more In MERCOSUR, there is still wide a discrepancy vulnerable to external shocks and less capable between the labour force participation rates of boosting productivity and generating of men and women. Women are also still quality employment. It is also important to overrepresented in part-time and informal ensure investment in productivity growth by employment, and tend to be concentrated supporting innovation and training programs. in low-quality jobs. Closing the gender gap In this regard, it is especially important to in employment has huge potential to spur design inclusive innovation policies that economic growth in the region (Aguirre and enable women, small entrepreneurs, poorer Rupp, 2012). It is estimated that, for MERCOSUR households, and indigenous populations to countries, the income losses due to gender gaps have access to new technologies (OECD, 2016). in the labour market are between 10 and 20 per cent of GDP (OECD, 2017).84 To ensure that regional integration fosters inclusive development and human Labour market outcomes are ultimately the development goals, it is crucial that trade result of traditional social norms that tend to policies be systematically evaluated from a associate women with a secondary role in the gender perspective and that all different types labour market, as their primary responsibility is of policies be designed coherently to promote identified with the sphere of the household. To sustainable human development (Espino and eliminate the persistent forms of discrimination Underhill-Sem, 2012). Specifically with regard against women, non-discriminatory and

33 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 34 2010). forthe community (ECLAC, publicofficials and to fosterinstruments cultural changeboth sensitivity programmes canalso beuseful community education,training andgender (OECD, 2017). Gender-based capacity-building, to genderequality andwomen’sempowerment education andcare areto move critical closer for parentalsupport leave andearlychildhood time-use surveys. Inaddition, greater public in national statisticsbyinvesting inregular reproductivethat are activities incorporated welfare.this regard, In to ensure isimportant it essential source ofindividual andcollective maketo value women’sworkvisibleand an Recognizing unpaidcareto workiscritical also unpaidcare work(orreproductive labour). the economy,the paidsphere of only not but gender-sensitiveto consider publicpoliciesneed Fernós, 2010). society, especially women’sgroups (Espino, 2016; andfeedbackdesigned withinput from civil the variouswith MERCOSUR institutionsand the nationalto becoordinated level need at measures andpublicpoliciesfor genderequality Finally, legal that to stress isimportant it regulate informal jobs(Chen, 2012). as incentivesto register informal enterprises and procedures andprovision ofbenefitscould act In addition, simplificationofbureaucratic the informalto protection sector. –isextended the form– in ofsocial insurance andemployment employment, social isdesirable protection that it the highdegree ofvulnerability ofinformal to directly address informalneed workers. Given employment, publicpoliciesinMERCOSUR also the informalAs playsalargerole sector inwomen’s Trade and Gender Linkages: An Analysis of MERCOSUR 4c Exercises and questions for discussion

What is the ultimate goal behind the formation of MERCOSUR? What are the requirements for 1. module countries to be members of this group? 2. How do men and women in MERCOSUR countries compare with respect to education, Income, and labour force participation? 3. Based on the Global Gender Gap Index, how do MERCOSUR countries perform internationally? Has the ranking of MERCOSUR countries improved over time? 4. What indicators could be used to illustrate gender disparities in public decision-making, access to assets, and financial resources in MERCOSUR countries? 5. How did the sectoral composition of employment change for male and female workers over the course of regional integration? What does this trend say about the process of industrial development of MERCOSUR countries? 6. How has the gender wage gap evolved in the region since the 1990s? What is the relationship between education and gender wage differentials in MERCOSUR countries? 7. When did MERCOSUR adopt a gender mainstreaming approach? What were the drivers? Overall, how can progress towards the institutionalization of gender equality in MERCOSUR be assessed? 8. In what ways can gender be mainstreamed in trade policy? To what extent is gender mainstreamed in MERCOSUR’s trade policy? 9. What is the meaning of national trade policy? Based on the WTO Trade Policy Review Mechanism, how are gender issues addressed in the national trade policies of Argentina, Brazil, Uruguay, and Paraguay? 10. How has the composition and geographic structure of MERCOSUR’s trade flows evolved in the 2000s? 11. What is the impact of trade openness on the female employment share in individual sectors (agriculture, industry, services)? Are these results driven by exports, imports, or both exports and imports? What are the economic reasons that can explain these results? 12. Distinguishing between production tasks and non-production tasks, how has female employment evolved in exporting firms between 2006 and 2010? 13. Based on the microeconomic analysis, what is the impact of tariff reductions on the female-to- male employment ratio for MERCOSUR countries considered as a whole? In your answer, please distinguish between import tariffs and export tariffs, and between production tasks and non- production tasks. 14. Based on the microeconomic analysis, what is the impact of tariff reductions on the female-to- male employment ratio in the individual MERCOSUR countries? In your answer, please distinguish between import tariffs and export tariffs, and between production tasks and non-production tasks. 15. What are some examples of regional initiatives that MERCOSUR could consider to support gender equality and women’s empowerment?

35 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 36 so that the index so that is decomposed into the ratios are considered andimports separately,exports andimports);(both exports inafollowing step, equation,trade all flows are consideredtogether traderatiototal flows of over GDP.the main In t. ** Significant at the 5 per cent level.the 5percent level.the 10percent at ** Significant at *Significant tradeopenness is ppennesst-1. level.the 1percent level.the 5percent at ***Significant t at **Significant at *Significant Note: Source: where –overthe period1992–2016: and services –namelyagriculture,economic sector industry, The following equationisestimatedfor each A1.1. Macroeconomic analysis analysis:Empirical 1. ANNEX X country the population, rate, fertility the male andsize of share:employment level ofGDPpercapita, size of characteristics,the female whichmayimpact trade opennessindex: The mainexplanatoryvariablethe the logof is femaletotal workers numberofworkers. overthe bevtos8 68 86 0.824 170.0 86 0.786 -77.99 0.647 86 1,186 0.810 86 -148.2 R-squared Observations Constant npplto .6 6.88403.884 -60.64*** -14.11 8.430 3.991** -53.65*** 18.04*** -61.98 0.164 -130.1** -2.828*** 11.79*** Male services 8.261 1.145 Male -3.231 industry 5.195 Male agriculture Male total 5.880* ln population 5.467*** ln fertility ln GDPpercapita ln trade openness Table A1.1. it eaeepomn hr vrl giutr nutyServices Industry Agriculture Overall Female share employment The tradethe The opennessindexisdefinedas

Robust standard errors inparentheses. forthe instrument squaretrade and two-stage least The estimationstrategythe is is a vector ofcountry-yearis avector speciﬁc UNCTAD estimationsusingdataretrievedthe and fromthe ILOStat World Bank, World Development Indicatorsdatabases. FES i in year Macroeconomic results: Estimationoftheimpac it Methodology is the female is share employment of GDP Exports t ,the ratio whichisdeﬁnedas of it

and TO

it Imports for country GDP (0.898) 301 3.0 710 (11.03) (7.140) (30.90) (3.001) 763 5.7 1.3 (27.36) (17.33) (59.17) (7.693) 185 122 341 (533.5) (344.1) (1,232) (148.5) 132 1.0 284 (3.802) (2.824) (14.00) (1.362) 512 5.0 843 (15.38) (8.413) (50.00) (5.142) it it

employment ratiosemployment across sectors i in year (1.787) openness in the previous year.openness in variablethe value isinstrumented with trade of is used;this procedure, in tradethe openness stage-least-squares estimationmethodology trade onfemale employment. To doso,two- the to properlyto beaddressedthe effect identify of directions. This possiblereverse causationneeds the labour market)thus workinbothin could trade(fromto female openness integration trade integration. The investigated relationship level ofcompetitiveness and,therefore, its becorrelated might market the country’s with Indeed,the integration the labour ofwomenin address apossiblereverse causality problem. implements aninstrumentation strategyto Following Bussmann(2009),this estimation tradeto changesin openness.be attributed country- andyear-speciﬁc cannot variationsthat workforce. Fixed effectsthe country at country-year wise. MERCOSUR), where individual observations are and 2016(therefore,the establishment of since the fourof MERCOSUR countries between1992 database usedforthe estimationcovers apanel World Development Indicatorsdatabase. The (ILO); all otherdataare fromthe World Bank’s fromthe International Labour Organization this analysis are datausedin The employment year t oftrade opennessonfemale-to-male t level are also included,to account for soas -4.714** (2.087) 85 he 10 per cent level.he 10percent (4.057) -7.579* μ i

and the Trade and Gender Linkages: An Analysis of MERCOSUR 4c

A1.2. Microeconomic analysis applied by Juhn, Ujhelyi, and Villegas-Sanchez The microeconomic analysis undertaken in this (2014), consists of the estimation of the section, which strictly follows the methodology following equation: module

where i denotes the firm, j the country of the sector fixed effects and Jj represents country firm, s the sector, and k the partner country. fixed-effects. In an alternative specification, Δ FMRijs refers to the change in the female-to- we also allow the E coefficients to vary across male employment ratio reported by the firm, MERCOSUR countries by introducing country- and is computed separately for production wise interactive dummies. and non-production tasks. Δ Export Tariffsjsk is the sectoral change in the tariff faced by the The estimation is based on the use of firm- firm located in country j and exporting to k. level panel data provided by the World Bank’s Δ Imports Tariffsjsk is the sectoral change in the Enterprise Surveys (World Bank, 2017b) and the tariff imposed by country k. Xist is a vector of firm sectoral tariff database from the World Bank’s characteristics in the initial period in order to World Integrated Trade Solution database (World control for firm size, the use of foreign technology, Bank, 2017c). The estimation procedure is based foreign ownership, and the presence of women on ordinary least squares, and the sample is among the owners. Gs represents two-digit restricted to exporting firms only.

Table A1.2. Descriptive statistics: Variables of the microeconomic analysis Variable (Units) Observations Mean Standard deviation Minimum Maximum

Female-to-male ratio (%) 779 32 29 0 100

Female-to-male ratio, production (%) 777 28 33 0 100

Female-to-male ratio, non-production (%) 760 40 27 0 100

Foreign ownership (dummy) 816 0.15 0.35 0 1

Foreign technology (dummy) 748 0.16 0.37 0 1

Sales (local currency) 778 1.56E+09* 1.33E+10 1.20E+05 2.18E+11

Female among owners (dummy) 764 0.31 0.46 0 1

Employment size 816 257.64 1,020.07 2 18,000

Δ World import tariff (pp) 406 0.59 4.09 -10.89 7.39

Δ European Union import tariff (pp) 406 1.17 2.52 -9.15 7.64

Δ Latin America import tariff (pp) 406 -5.20 7.80 -26.65 0.69

Δ North America import tariff (pp) 406 1.59 2.93 -9.19 8.21

Δ World export tariff (pp) 406 -2.90 3.57 -13.06 4.59

Δ Latin America export tariff (pp) 406 -5.26 6.59 -19.47 1.68

Δ North America export tariff (pp) 406 -1.36 1.99 -9.07 4.99

Source: UNCTAD calculations based on the World Bank Enterprise Surveys and the World Integrated Trade Solution database. Note: Δ is the symbol for rate of change; pp refers to percentage points. * 1.56E+09 should be read as 1.56x(10)9; the same logic applies to the other values of sales in the table.

37 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 38 ** Significant at the 5 per cent level.the 5percent level.the 10percent at ** Significant at *Significant the female-to-malethe survey. in two periodsof the growth ratio employment the between levethe 1percent at ***Significant the survey.two periodsof countrysurveyed the between Overall,the female-male on ratio employment the impact indicates the survey.two periodsof the between exports tariff tariffsthe variation refers to th insectoral ΔImport appliedby import Brazil, Paraguay, andUruguay.tariff ΔExport the variation refersto insectoraltariffs the destination countries appliedby Note: Source: bevtos3529203529270 0.034 289 -1.134 0.059 0.616 0.040 305 0.032 1.363 270 0.039 -0.897 0.255** 289 0.747*** 0.0252 0.036 -0.0699 0.618 -0.311 -0.465 305 -0.00780 0.0487 1.454 -0.0953 0.277 0.259*** -0.231 -0.0775 0.180 0.0421 Country -0.0597 -0.388** 0.747*** 0.0342 -0.117 fixedSector effects -0.692** -0.317 -0.00785 R-squared 0.144 -0.417 0.162 0.0268 Observations 0.252* -0.123 -0.0525 -0.0786 -0.219 Constant 0.317 -0.217 0.0241 0.0861 0.0336 size Employment -0.246 -0.349 0.114 -0.257** Female amongowners 0.269 0.0402 0.161 Foreign technology -0.141 Sales Foreign ownership tariff Americanexport Δ North -0.0406 tariff Δ LatinAmericanexport -0.0892 tariff Americanimport Δ North -0.0285 tariff Δ LatinAmericanimport fixedtariff Δ European Unionimport tariff export Δ World effects XXXXXX ol mottrf 001 014*-0.0542 -0.174** -0.0515 tariff import Δ World Table A1.3. Microeconomic results: oftarif Estimationoftheimpact Robust standard errors inparenthesesthe country (clustered level). at firmsfrom Argentina,The sampleincludesexporting UNCTADthe estimationsbasedon World BankEnterprise Surveys. eedn aibe 1 2 3 4 5 (6) (5) (4) (3) (2) (1) variableDependent employment ratioemployment Female-to-male 000)(.81 (0.0510) (0.0861) (0.0208) 009)(.48 003)(.30 003)(0.0500) (0.0337) (0.0310) (0.0435) (0.0438) (0.0297) 008)(.40 (0.0594) (0.0400) (0.0283) 005)(.52 003)(.44 004)(0.0562) (0.0540) (0.0484) (0.0539) (0.0572) (0.0452) vrl Production Overall 082 119 106 074 077 (0.945) (0.777) (0.774) (1.076) (1.109) (0.802) 025 033 011 020 038 (0.113) (0.338) (0.200) (0.111) (0.373) (0.205) 013 014 027 013 019 (0.262) (0.109) (0.133) (0.247) (0.164) (0.143) 017 023 029 017 028 (0.270) (0.278) (0.147) (0.299) (0.293) (0.137) XXXXXX f variations onfemale-to-male ratios employment production Non- 008)(.0)(0.115) (0.202) (0.0680) 005)(.67 (0.106) (0.0627) (0.0857) 001)(.87 (0.0752) (0.0857) (0.0512) vrl Production Overall 014 019 (0.203) (0.139) (0.184) 015 015 (0.171) (0.115) (0.165) production Non- of the of e l. Trade and Gender Linkages: An Analysis of MERCOSUR 4c

Table A1.4. Microeconomic results: Estimation of the impact of tariff variations on female-to-male

employment ratios with interactive country dummies module Dependent variable: Overall Production Non-production Female-to-male ratio

Δ world import tariff*Argentina -0.00527 0.0969 -0.212**

(0.0328) (0.127) (0.0576)

Δ world import tariff*Brazil 0.00741 -0.146* 0.105

(0.0350) (0.0568) (0.0582)

Δ world import tariff*Paraguay 0.116 0.424*** -0.386**

(0.0826) (0.0303) (0.0735)

Δ world import tariff*Uruguay -0.0493 -0.246** -0.561

(0.396) (0.0715) (0.480)

Δ world export tariff*Argentina 0.0410 0.329** -0.280

(0.0885) (0.0868) (0.139)

Δ world export tariff*Brazil -0.0974 -0.707** 0.400

(0.0846) (0.172) (0.184)

Δ world export tariff*Paraguay 1.228** 0.273** 0.763

(0.279) (0.0481) (0.395)

Δ world export tariff*Uruguay 0.120 0.353*** 0.429

(0.501) (0.0602) (0.597)

Observations 305 289 270

R-squared 0.050 0.057 0.046

Sector ﬁxed effects X X X

Country ﬁxed effects X X X

Source: UNCTAD estimations based on the World Bank Enterprise Surveys. Note: Robust standard errors in parentheses (clustered at the country level). The sample includes exporting firms from Argentina, Brazil, Paraguay, and Uruguay. Δ Export tariff refers to the variation in sectoral tariffs applied by the destination countries of the exports between the two periods of the survey. Δ Import tariff refers to the variation in sectoral import tariffs applied by the surveyed country between the two periods of the survey. Overall, the impact on the female-male employment ratio indicates the growth in the female-to-male employment ratio between the two periods of the survey. *** Significant at the 1 per cent level. ** Significant at the 5 per cent level. * Significant at the 10 per cent level.

39 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 40 In asecond stage, stageismatched the first trademicroregionsto the exposure reforms. in sharesemployment the variation capture across the liberalization“base year”of period. These level shares employment by microregionthe in The censusdataareto calculate sector- also used tariffthe data.to to bematched industrial sectors stage,first to identifythe censusdataare 21 used Tradetwo stages. protection iscalculated in Ina tariffthe analysis, datausedin respectively). ofof Brazil andlast in1990and1998(thefirst tradelevel of protection for 494microregions liberalization. Trade protectionthe measures and industry-specifictariff rates beforetrade specific composition ofindustrial employment microregionalthe region- level andreflects thetradewhich measures protection at tradethe empirical analysis is protection, geographic characteristics. Akey variable in municipalities withsimilareconomic and Microregions are groups ofneighbouring tradeof liberalizationthe labour market. on microregionsthe genderimpact to identify tradethe changein protection across in-difference estimationandexploits The empirical methodology usesadifference- trade policy. period 1987–1998byindustryasindicatorsof tariffs andeffective rates ofprotection forthe to 55;individuals aged25 andsecond, nominal and formal/informal), industry, andwages for status(bothpaid/unpaidon employment the Brazilianby Census data to collect Bureau Demographic Census for 1991and2000provided types ofdata:two The analysis uses first,the Data andmethodology education levels. men andwomendisaggregates outcomes by force rate participation for andemployment both the labour on medium- andlong-termimpact non-tariff barriers. The analysis evaluatesthe to drasticallyinitiated tariff reduce both and world.the early1990s, in Starting reforms were countriesthe protectionist in the most one of labour market.the late1980s, Until Brazil was of Brazil’strade liberalizationthe country’s on This paperinvestigatesthe gender-specific effects Objective andbackground Isis GaddisandJannekeA.2.1. Pieters(2017): Casestudies 2.ANNEX Brazil” of Trade –Evidencefrom Liberalization GenderedLaborMarket “The Impacts Tiempo y Trabajo NoRemunerado the and Survey ( Time-Use Survey takendata are fromthe Continuous Household calibratedthe year2000. usingdatafrom The Social Accounting hasbeen Matrix(SAM)that apply agenderperspective. The modelusesa General Equilibrium(CGE) model,to modified typicalThe empirical Computable analysis usesa Data andmethodology of unpaidwork. the lion’sshare andwomenstillcarryout market the privatediscrimination persistsin labour then, hasincreasedmarket since gender but Uruguay. Women’sthe labour in participation reductionto asignificant ofprotectionism in and regional integration underMERCOSUR led domestic work.the 1990s, In trade liberalization the labour and market time allocation between openness inUruguayonemployment, wages, and trade of the genderimpact This paperexamines Objective andbackground A.2.2. Inés Maria Terra, Buchelo, Marisa labour outcomes market for women. associatedwithany improvementsis not the in force rates. participation This reduction, however, andlabourthe gendergapinbothemployment liberalization isalso associatedwithadeclinein than onwomen,be significantly larger trade onmenisfoundto the aggregate impact As the low-skilledthe population. segments of for bothmenandwomen, especially among force rates participation rates andemployment in Brazil isassociatedwithadeclineinlabour trade liberalizationthat The results indicate Findings women. separately for low- andhigh-skilledmen Trade liberalization effects are also estimated labour developments). market could impact microregionunobserved that characteristics variables (whichallow for controlling for sharesemployment are usedascontrolling variabletrade is protection, andinitial sectoral in labour outcomes. market The key dependent level –consists ofwithin-microregion variation the microregionpanel datafor 1991–2000at variablethe estimationequation–whichuses in gender labour outcomes, market the dependent Totradethe of protection evaluate on the impact calculated for eachmicroregion. with sectoraltarifftrade dataand protection is A CGE Analysis.” “Trade OpennessandGender inUruguay: Estradesand Carmen (2008): - EUS)carried Encuesta del Trade and Gender Linkages: An Analysis of MERCOSUR 4c out by the Department of Sociology of the Findings Facultad de Ciencias Sociales - Udelar. The model

includes three trading partners (Argentina, This section only reports the key results of the module Brazil, and the rest of the world), three factors of empirical analysis. Greater trade openness is production (skilled labour, unskilled labour, and found to improve both employment and wages capital), two institutions (households – more for women. The impact on gender gaps, however, specifically, 10 households at different income depends on the specific trade flows. Net exports levels – and the government), and 23 sectors to Argentina tend to be intensive in skilled (including the informal sector, which is assumed female labour, while net exports to Brazil and the to only produce for the domestic market, and the rest of the world are predominantly intensive public sector). in unskilled male labour. In turn, if net exports to Argentina increase, demand for female The analysis uses three versions of the model. In labour increases and the gender gap declines; the first version, demands for male and female if net exports to Brazil and the rest of the world labour are assumed to be exogenous and increase, demand for male labour increases and considered separately; in the second model, male the gender gap increases. and female labour supplies are endogenous and leisure time is incorporated as well; and The introduction of reference prices in unskilled in the final model, domestic work is explicitly female-intensive sectors (to protect unskilled incorporated. women) is found to improve the relative situation of unskilled women, but it worsens the situation To evaluate the impact of trade liberalization, the of all other workers in the labour market.86 The analysis simulates three different scenarios. The authors conclude that direct subsidies would be first assumes complete trade liberalization with a more effective instrument to support unskilled the rest of the world, while the second and third women. scenarios assume an increase in trade protection. The second and third scenarios simulate the With regard to time distribution between paid tariff scheme of 1994 (when Uruguay started to and unpaid work, if faced with a restriction on move towards greater trade openness) and the the maximum number of hours available (which existence of reference prices in textiles (which reflects the rigidity of unpaid responsibilities for act as tariffs on a type of production that uses women), women are constrained from changing female labour intensively), respectively. The their labour market participation. The authors second and the third scenarios are then analysed state that state-funded childcare and eldercare together to evaluate the impact of reference services would give women much more flexibility prices on the labour market of the 1990s. in allocating time based on utility maximization.

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45 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 46 3 2 1 ENDNOTES 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 31 30 29 28 27 26 25 24

InDecember2012, MERCOSUR countriesto MERCOSUR.the Protocolthe Plurinational StateofBolivia signed ofAccession Paraguay wastemporarily suspendedin2012following ofitspresident,the impeachment whichwas considered illegitimate Acustomsunioninvolvesthe removal tarifftariffthe adoptionofacommon of external barriersbetweenmembersand The empirical analyses of this modulegenerate Theempirical analyses of results forthe MERCOSUR region asawhole. Two casestudies, whichfocus on Inpractice,the formation was than what planned. ofacommon (andeven market afullcustoms union)hasbeenslower The All associate members of MERCOSUR are part of the LatinAmericanIntegration of AllassociatemembersofMERCOSUR are Association(ALADI), part anintergovernmental Inpractice, CETsto awiderange ofexceptions. are subject Venezuela’sthe countrythe required could rejointhat norms. to adopt were MERCOSUR suspendedstatusimplies ifit Argentina andBrazil are characterized degree byasignificant ofeconomic integration,tradethe regime soachangein of AsexplainedinModule1, concepts. genderequality are andwomen’sempowerment quitedistinct closelyrelated but Gender headcount Thepoverty ratio US$3.20aday(2011PPP). ismeasured at the Pacific Argentinato becameanofficial observer AllianceinJune2016, indicatingitsintentiontradeto keep pursuing Negotiations with the European Negotiationswith Unionwere in2010. suspendedin2004andrestarted Theworld’saverage ratio poverty US$3.20aday(2011PPP)was at 28.6percent in2013, yearavailable;the latest whichis th Forthe historyandchallenges faced adetailedaccount of byMERCOSUR, seeCason (2011)andMothiane(2016). AllMERCOSUR countries,the exception with ofParaguay,the Generalised have beenunder System not ofPreferences scheme The Gini coefficient is the most commonly usedindicatorofincomethe most inequality. TheGinicoefficient is the income to which the extent measures It For ahistorical account ofinequality inLatinAmerica, see Williamson (2015). Recommendations canbefollowed bydecisions,the approval whichneed the MERCOSUR Council of to become effective. Close to zero Close the 2001/2002 inMERCOSUR economic growth in2001isexplainedby Argentine economic crisis, whichcontrib- Argentina recorded of10percent annual growth in2010and6percent in2011, followed in2013 economic growth bymodest Theseyearsare commonly referredthe “commodity super-cycle.”to as The years2008and2009constitute anexceptionto Theseagreements dealtransactions, withcurrency capital investment,taxes, transportation, customs, services, andany other Conditionaltransfers cash are welfareto be need that programs ofconditions associatemonetarypayments withaset that Accordingto dataas of July2018, the region in2017(1.3percent) sloweconomic experiencedpositive growth but and is Trade willbeexamined 3. indetailSection Fortechnical details, seehttp://hdr.undp.org/en/content/human-development-index-hdi. Brazilthe seventh economythe international is largest in ranking basedonGDP(PPP, inconstant 2011international dollars), Incontrastto sex, the roles,the notionofgenderrefersto characteristics, andbehaviors associatedwithmen andwomenin According to the Accordingto World Bank’s World Development Indicators, available https://data.worldbank.org/data-catalog/world- at short-lived discussion on the introductionshort-lived discussionon ofacommon currency aswell. goods, services, capital, andpeople. Inacommon market,tariffs both andnon-tariff barriersare eliminated. MERCOSUR hada non-members.against Acommon impliesfree market exchange ofall economic resources betweenmembers, including since 1 January 2014 due to their classificationashigh-middle-income countries.to since 1January2014due by Brazil andArgentina. Paraguay wasto rejoin allowed after newpresidential inApril2013. elections market embracingmarket the entire SouthernCone. this integrationultimate goal of initiative wasto followthe Europeanthe example Union, of andeventually create acommon Ecuador, Mexico, Paraguay, Panama, Peru, Uruguay, and Venezuela. a LatinAmericancommon market. Currently, ALADIhas13memberstates: Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, deo Treaty.to foster is Itsobjective economic integration amongitsmembercountriesthe ultimategoal ofestablishing with the LatinAmericanFree replaced that organization Trade Association(ALAC). ALADIwasthe Montevi- established in1980by Trade andGenderLinks teaching manual iscomprised of The Volume 1( imports fromthe People’s imports Republic ofChinainSeptember2011). unilateraltradetoward policydecisionsdirected third countries the impositionofanti-dumping dutiesonsteel (suchas to defendmeasures domesticindustries. Brazil,trade Argentina’s main partner,turn responded withprotectionism in and During andafterthe 2008–2009global financial crisis, for example, Argentina the useofdomestic protectionist advocated tradingtwo countriesthe other partners).the on hasamajoreffecteither of onbothcountriesto itsimpact (inaddition projected to improveprojectedto 2.5percent) performance (OECD, in2018(2 itsgrowth CAF, andECLAC, 2018). (Carranza, 2010). to anewroundtradeuted of disputesbetweenArgentina andBrazilthe context ofasteadydevaluation in ofBrazil’s currency individual countries (i.e., Brazil andUruguay), are presented inAnnex2. equality isevaluatedthe statusofmenandwomeninasociety(i.e., basedonacomparison between isarelative it measure). 22 May2018). Indicatorsdatabase,ment available https://data.worldbank.org/data-catalog/world-development-indicators at (accessedon 2.5percent)and 2015(about andeconomic contraction in2012, 2014, and2016,the accordingto World Bank’s World Develop- liberalization, andpossiblylookingbeyondtrade.to expand MERCOSUR world-development-indicators (accessedon25June2018). the accordingto World Bank’s World Development Indicatorsdatabase, available https://data.worldbank.org/data-catalog/ at one person has all the income). one personhasall 0 represents equality (i.e., perfect everyonethe samelevel ofincome), has inequality ( whileanindexof100impliesperfect distribution amongindividuals orhouseholdsinaneconomy deviatesfrom equitable distribution. aperfectly AGiniindexof see Paes-Sousa, Regalia andStampini(2013). the form in ofchildren’smet education, medical care, etc. Forthe Caribbea the experienceofLatinAmericaand ananalysis of database, available https://data.worldbank.org/data-catalog/world-development-indicators at (accessedon17May2018). headcountpoverty ratio inLatinAmericawas 11.3percent, also in2013,the accordingto World Bank’s World Development Indica isregardedthe membersasrelevantthat by issue to ensuretrade. free this boom due to the impact of the global economic crisis. of the impact to this boomdue development-indicators (accessed on17May2018). ) (UNCTAD, 2014b). Unfolding theLinks ) (UNCTAD, 2014a)and Volume 2( Empirical Analysisofthe e average a society. tors tors i.e., n,

Trade and Gender Linkages: An Analysis of MERCOSUR 4c

In contrast, women’s empowerment is assessed based on whether women have the ability to participate in decision-making, have access to opportunities, and are able exercise control over their lives (i.e., it is an absolute measure). 32 As explained in Module 1, a more complete analysis would require examining the role of women as taxpayers and consumers as well. module 33 The data in table 3 refer to the 2016 Human Development Report. 34 The GII is only calculated for 154 countries (in contrast to the 188 countries for the HDI) due to data limitations. 35 See data from the Human Development Report at http://hdr.undp.org/en/data (accessed on 3 July 2018). It is important to note, however, that aggregate indicators to measure gender inequality hide differences across socio-economic groups of women, including widening gaps. 36 See box 1 for an account of time use by men and women in the region in paid and unpaid activities. 37 7 As can be expected, international rankings vary depending on the indicators that are used for the evaluation. This indicates that it is of critical importance to be aware of how indicators are constructed. 38 For a detailed explanation of the structure of the GGGI, see WEF (2017, 3–7). 39 In 2017, the government of Uruguay approved a law that indefinitely extends female quotas on electoral lists. The law requires that there be at least one man and one woman on the list for every three candidates. This law applies to both national and local elections, as well as to primary elections within each political party (http://santiagotimes.cl/2017/10/19/uruguay-passes- gender-equality-law-for-congress/). 40 See http://archive.ipu.org/wmn-e/classif.htm (accessed on 1 October 2017). 41 In 1991, Argentina adopted the first gender quota law in Latin America aimed at increasing women’s representation in national parliaments. The law sets a quota of female candidates that each party needs to fulfill (at least 30 per cent of party list positions during parliamentary elections). Electoral quotas for women were first introduced in 1995 in Brazil (30 per cent) and in 2009 in Uruguay (33 per cent). Paraguay requires that one in five candidates in primary elections is a woman. 42 See FAO’s Gender and land rights database http://www.fao.org/gender-landrights-database/data-map/statistics/en/ 43 In Latin America, the number of female-headed single-parent households is larger than that for men (Liu, Esteve and Treviño, 2017). 44 Even though an evaluation by sector would be more informative, because of a lack of sectoral data, figure 10 illustrates the gender composition of employment by work status for the aggregate economy. 45 In Latin American countries, women-run and women-owned firms are disproportionately found in the retail sector rather than in other services or manufacturing (World Bank, 2014). 46 In Paraguay, the male share of own-account workers is only slightly above the female share (30.9 versus 30.1 per cent). 47 The smaller the gender wage gap, the closer women’s pay is to that of men. The gender wage gap can be considered as a raw measure of gender discrimination, but only because it does not account for differences in productivity as a result, for example, of differences in education and work experiences (see Volume 2, box 11). As explained in Module 3, the relatively lower income that women receive for similar work due to gender discrimination makes women a profitable work force for enterprises facing intense competition on international markets. 48 Argentina ratified the CEDAW on 15 July 1985, Brazil on 1 February 1984, Paraguay on 6 April 1987, and Uruguay on 9 October 1981. 49 Article 29, paragraph 1 states the following: “Any dispute between two or more States Parties concerning the interpreta- tion or application of the present Convention which is not settled by negotiation shall, at the request of one of them, be submitted to arbitration. If within six months from the date of the request for arbitration the parties are unable to agree on the organization of the arbitration, any one of those parties may refer the dispute to the International Court of Justice by request in conformity with the Statute of the Court.” See http://www.un.org/womenwatch/daw/cedaw/text/econvention. htm#article25. 50 The General Assembly adopted a 21-article Optional Protocol to CEDAW on 6 October 1999. Argentina ratified the Optional Protocol on 20 March 2007, Brazil on 28 June 2002, Paraguay on 14 May 2001, and Uruguay on 26 July 2001. 51 The communications procedure gives individuals and groups of women the right to complain to the Committee on the Elimination of Discrimination against Women about violations of the convention. For its part, the inquiry procedure enables the committee to conduct inquiries into serious and systematic abuses of women’s human rights in countries that become parties to the Optional Protocol. See http://www.un.org/womenwatch/daw/cedaw/protocol/whatis.htm. 52 The resolution did not contemplate any specific monitoring mechanism. 53 The preparation for the 1995 UN conference in Beijing was especially important in fostering the mobilization of women’s groups in the MERCOSUR countries (Hoffman, 2014). 54 See the Care Act (Law 19.353) at http://www.sistemadecuidados.gub.uy/innovaportal/file/58642/1/ley-19.353---sistema-de- cuidados.pdf 55 In Paraguay, gender budgeting started formally in 2001, but progress and implementation have been very limited (Pérez Fragoso and Rodríguez Enríquez, 2016). 56 See Espino (2016) for an account of specific programs and see box 2 for a discussion of informal employment in Latin America. 57 Gender equality seal certification programs are rapidly expanding around the world as an instrument to contribute towards the 2030 Sustainable Development Goals (SDGs). They consist of a voluntary certification process that verifies the support of public institutions and private sector enterprises for gender equality in the workplace. 58 With regard to regional trade policy, it is important to note that – based on CMC Decision 32/00 – the member countries of MERCOSUR can only negotiate commercial agreements with third parties jointly (see http://www.sice.oas.org/trade/mrcsrs/ decisions/dec3200s.asp). 59 The Cotonou Agreement between the European Union and the African, Caribbean, and Pacific (ACP) countries, and the Eco- nomic Partnership Agreement (EPA) between the European Union and the Caribbean Forum of ACP States (CARIFORUM), are two such examples (UNCTAD, 2017). Even in the case of European Union, which approaches gender equality as a core area of priority in its treaties, most EPAs have no reference to gender aspects of trade, and a systematic gender analysis is lacking in the Sustainable Impact Assessments (Fontana, 2016). 60 Trade agreements between the MERCOSUR countries and Chile fall under the Economic Complementary Agreement 35 signed in 1995, on the basis of which Chile became an associate member. 61 Framework agreements consist of general terms governing contracts between the parties that regulate the specific contracts that will follow.

47 4 module c Trade andGenderLinkages: AnAnalysisofMERCOSUR 48 64 63 62 82 81 80 79 78 77 76 75 74 73 72 71 70 69 68 67 66 65 86 85 84 83 There are exceptions,the sugarandautomobileindustries(Borraz, suchas Rossi, andFerres, 2011). To avoid any confusion,tariffs referthe reader export tariffs shouldbeawarethe importer arethat to here imposedby that The trade-weighted The ratethe average is shares correspondingto eachpartner ofappliedrates import the product weighted by the Lall classification, Accordingto primaryproducts referto agriculture andminingproducts; resource-based manufactures Seecountry profilestheObservatory ofEconomic on Complexity website, whichisavailable https://atlas.media.mit.edu/ at According to the UNCTADSTAT Accordingto database, available (accessedon21May2018). http://unctadstat.unctad.org/EN/ at Theconcentration index,the Herfindahl-Hirschmann index, also knownas providesthe degree con- ameasure ofproduct of One of the most widelyknown(andlargest) social welfarethe most Oneof programmesthe Global South isBrazil’s in BolsaFamília. Intro- ThemethodologyusedbyBussman(2009)hasalso beenusedinModule4(UNCTAD, 2017b)andModule4a(UNCTAD, 2018). For adetailed presentationthe instrumental of variable approach,teaching manual (UNCTAD,the seeModule2of 2014b) The production/non-production classification of tasks is based on the frameworkthe tasks Theproduction/non-production isbasedon usedin classificationof World Bank(2017b)Enterprise AsofJune2018, ChileandBrazil havetowardstaking steps the establishment ofabilateral been FTA. to go The deal aims Forthe model, more detailson seeModule 1– Volumeteaching material (UNCTAD,the 2of 2014b). Seehttps://atlas.media.mit.edu/en/profile/country/arg/ andhttps://atlas.media.mit.edu/en/profile/country/bra/. the SIAforthe European See Union-MERCOSUR agreement, available at: http://trade.ec.europa.eu/doclib/docs/2009/april/ See http://www.borderlex.eu/women-empowerment-climbs-eu-trade-policy-priority-list/. APTAtrade isalimitedfree agreement countries where partner reciprocally dutiesonafew products. selected reduce import The TPRMtrade periodically reviewsthe policiesandpractices ofeach WTO member. The WTO reviews bycountry are available Theestimatedincome lossesvary bycountry. income lossesareThe largest found inParaguay, followed byArgentina, Brazil, MERCOSUR and the European MERCOSUR and Unionhavetowards beeninnegotiations abiregionaltrade free area sinceApril2000. The It is important to add that two aspects havetwo aspects the SIAforthe European beennotedasmissingin trade Union-MERCOSUR that agree-to add isimportant It Reference ofpricefloorsimposedbyregulation pricesconsist onimports. The announcement was made on 9 October 2017 during the was Theannouncement 2017during madeon9October World Trade Organization’s MiniMinisterial Conference in SeeKress (2017), available https://eu.boell.org/en/2017/02/22/gender-sensitive-trade-feminist-perspective-eu-mercosur- at The microeconomic analysis examines the impact of trade Themicroeconomic of integration analysisthe impact examines on full-timeemployeesinmanufacturing firms. This en/. and Wooldridge (2009). and Wooldridge country. Hence,the rate showstrade it of protection realized, actually the statutoryrates. not ucts. Incontrast,to bedistributedamongdifferenttend orimports products. exports anindexvaluethat to 0means closer centration.the indexvalue As to 1, getscloser indicatesahigherdegree ofconcentration it onafew p orimports ofexports specified (Lall, 2000). referto electronic etc. andelectrical products; andunclassifiedproducts refer elsewheretransactionsto commodities not and medium-technology manufactures referto automotive, process, andengineeringproducts; high-technologymanufactures referto agro-based andotherresource-based products; low-technology manufacturestextile, referto garment, footwear, etc.; santiagotimes.cl/2018/05/26/south-korea-mercosur-agree-to-begin-formal-negotiations-for-a-free-trade-deal/). MERCOSUR have negotiationsin 2018forto undertake committed abilateraltrade agreement on andinvestment (seehttp:// santiagotimes.cl/2018/06/09/chile-brazil-wrap-up-first-round-of-second-generation-fta-talks/). Inaddition, SouthKorea and two countriestariffsthe the eliminationofregulatory (seehttp://beyondthe eliminationof barriersbetween to include (Barrientos, Debowicz, and Woolard, 2014). to reduce poverty,successful inhelping inequality, andsocial exclusion, women’sempowerment to supporting inaddition they arethe moneyfor morethe family’sto use likely welfare. Aprogramme BolsaFamíliathat indicates assessment has been Conditions includechildren’s education andprenatal maternal care. Transfersto mothers,typically are made isfound asit duced in2003, consiststransfer ofaconditional it cash programme forthere are poorhouseholds(ofwhich over 13million). tradoc_142921.pdf. seehttp://www.sice.oas.org/TPD/MER_EU/MER_EU_e.asp.ment the MERCOSUR-Europeanto reach Unionagreement. Forthe stepsandevolution ofEuropean trade Union-MERCOSUR agree- rounds, inNovemberthe foreign 2017 ministersofMERCOSURthe European presentedto Unionacomprehensive proposal inMay2002.Summit throughtechnical SinceMay2004negotiationshave meetings. beencarriedout After many negotiating negotiatingroundthe agreementthe first inApril2000,The scope were of andobjectives agreed uponat the Madrid then at agreement currentlythree undernegotiationconsists parts: of political dialogue,trade andeconomic issues, andcooperation. and Uruguay, respectively. at https://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm#bycountry.at Marrakesh. to cutsinsocialwhich likely programs. maylead the earningsofsmall producers, whoare often women. the effectsThe second is tariff of reductions ongovernment revenues, (Kress,ment 2017). the effects affect is that women’sconsumption patternsaswell The first ofchanges inpricesofgoods free-trade-negotiations. logical innovation. ees, etc.), have become widespread,the digitalthe increased economy especially useof with andothernewformstechno- of should note, however, newformsthat ofemployment, temporary (suchas employees, inservices particularly on-call employ- by dataconstraints –allows forthe level ananalysis ofmanufacturing offundamental firms. dynamicsoccurringat One mostly refersto formal employment. The dichotomy betweenproductiontasks versus –whichisalso non-production driven are included in this category.are included in ofmajoradditionsoralterationsconstruction utilized asaseparate workforce. Finally, professionaltechnical employees and legal, personnelare also included,the payrollthe manufacturingthe establishment aswellemployees on of engagedin collection, ofownproducts, installation andservicing clerical androutine officefunctions, executive, purchasing, financing, andbelowaremance ofshopfloorsupervisors included. Employeesinsales, janitorial andguard services, advertising, credit, engagedinproductionwho are operations. not personnelwithresponsibilities Managersandothersupervisory forthe perfor- the usual blue-/white-collar coincides classification. with andalmost Surveys The non-production group includesworkers The PTA betweenIndiaandMERCOSUR iscurrentlyto 450products, limited to 3,000 the intention products. to expandit is but Villegas-Sanchez, 2014). the destinationcountry,in firms(Juhn,their exporting tariffs countriesto to the exporting Ujhelyi, imposedby andnot and rod- [email protected] http://unctad.org/gender

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