Trade and Gender Linkages: an Analysis of Central America

AMERICA CENTRAL CENTRAL

TEACHING MATERIAL ON TRADE AND GENDER VOLUME 1: UNFOLDING THE LINKS MODULE 4D TRADE AND GENDER LINKAGES: AN ANALYSIS OF CENTRAL AMERICA

[email protected] http://unctad.org/gender AMERICA CENTRAL CENTRAL

TEACHING MATERIAL ON TRADE AND GENDER VOLUME 1: UNFOLDING THE LINKS MODULE 4D TRADE AND GENDER LINKAGES: AN ANALYSIS OF CENTRAL AMERICA

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ii ACKNOWLEDGEMENTS

This module was prepared by Bengi Yanik-Ilhan. Comments and suggestions were provided by Nursel Aydiner-Avsar, Claudia Contreras, Alma Espino, Alicia Frohmann, Katerina Joklova, Mariangela Linoci, Jorge Martinez, Johan Muller, 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

ACKNOWLEDGEMENTS iii TABLE OF CONTENTS IV LIST OF BOXES V LIST OF FIGURES V LIST OF TABLES V Trade and Gender Linkages: An Analysis of Central America 1

1. Introduction 2 1.1. An overview of trade liberalization in Central America 3 1.2. Socio-economic profiles of Central American countries 4 D2. Gender-related outputs: An assessment of the various dimensions of gender inequalities 7 4 2.1. Capabilities domain 7 2.2. Access to resources and opportunities domain 8 2.2.1. Employment patterns 9 2.2.2. Time use 14

module 2.2.3. Access to finance and land 15 2.2.4. Decision-making power 16 2.3. Security domain 17 3. Gender-related inputs: The legal and institutional frameworks for gender equality 17 3.1. International and regional policy instruments 17 3.2. Legal framework on gender equality at the national level 18 4. A gender analysis of trade policy and trade flows in Central America 19 4.1. Gender mainstreaming in trade policy 19 4.2. Trade structure 20 4.3. Gender implications of trade liberalization: Selected case studies 22 4.3.1. Agriculture: The case of coffee producers 23 4.3.2. Industry: The case of maquila workers 25 4.3.3. Services: The case of tourism entrepreneurs and workers 30 4.4. Empirical analysis 33 5. Main findings and policy recommendations 34 Exercises and questions for discussions 38 ANNEXES 39 Annex 1. Top export/import products and partners 39 Annex 2. Empirical Analysis 40 Annex 3. Case Studies 43 REFERENCES 45 ENDNOTES 49

iv LIST OF BOXES

Box 1. Femininity index of poor households 9 Box 2. The gender divide by productivity levels in Central America 13 Box 3. Foreign trade promotion agencies in Costa Rica (PROCOMER) and El Salvador (PROESA) 20 Box 4. Historical developments in the maquila sector 26

LIST OF FIGURES

Figure 1. Overview of the modules in the UNCTAD teaching manual on gender and trade 2 Figure 2. Selected economic and social indicators, 2018 5 Figure 3. Sectoral composition of economic activity, 2000 and 2018 5 Figure 4. GDP growth performance, 1998–2002 and 2014–2018 averages 6 Figure 5. Trade openness indicators, 2014–2018 average 6 Figure 6. Sectoral composition of employment by sex 10 Figure 7. Female share of total employment in the broad sectors of the economy 10 Figure 8. Employment composition by work status and sex 12 Figure 9. Informal employment shares by sex 12 Figure 10. Proportion of time spent on unpaid domestic and care work by sex 14 Figure 11. Account ownership at a financial institution or with a mobile money-service provider, 2017 15 Figure 12. Indicators of decision-making 16 Figure 13. Proportion of women subjected to physical and/or sexual violence in the last 12 months 16 Figure 14. Merchandise exports by product groups, 1998–2000 and 2016–2018 averages 20 Figure 15. Merchandise imports by product groups, 1998–2000 and 2016–2018 averages 21 Figure 16. Services exports by services category, 2005–2007 and 2016–2018 averages 22 Figure 17. Female share of employment in selected manufacturing sub-sectors 27 Figure 18. Tourism receipts (in total exports) and expenditures (in total imports), 2018 31

LIST OF TABLES

Table 1. Gender inequality index and selected gender indicators, 2018 8 Table 2. Female share of total employment in major sub-sectors 11 Table 3. Composition of services employment by sub-sectors and sex 11 Table 4. Sources of and motivation for borrowing by sex 15 Table 5. Scores on different dimensions of gender equality 18 Table 6. Budget allocations for national mechanisms for the advancement of women, 2017 19 Table 7. Geographic composition of merchandise exports and imports, 1998–2000 and 2016–2018 averages 21 Table 8. International Women’s Coffee Alliance estimates for the number of female coffee producers 24 Table 9. The effects of certification schemes in the coffee sector 25 Table 10. The effects of maquila employment 28 Table A.1.1. Top export and import products at the HS 6-digit level 39 Table A.1.2. Top export and top import trade partners 40 Table A.2.1. Macroeconomic analysis estimation results for the share of each broad sector in total female employment 41 Table A.2.2. Macroeconomic analysis estimation results for the gender employment gap in each broad sector 42

Module 4D Trade and Gender Linkages: An 4Analysis of Central Americad

1 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 2 Trade (UNCTAD). andDevelopment prepared bytheUnitedNationsConferenceon 1 oftheteachingmanualontrade andgender istheeighthmodulein This document Volume 1. Introduction Source: UNCTAD Secretariat. educational attainment andhealthoutcomes,educational attainment society. Even thoughgenderequalityishigherin homeandintheworkplacebroader both at to structural inequalitiesanddiscrimination people’s livesinallofthecountries. They lead in shaping role influential an play stereotypes diversity acrosstheregion, gendernormsand a commonlanguage(Spanish). Despitethe though theyshareageographic regionand linguistic, ethnicandeconomicstructures, even Central Americancountrieshavediverse Honduras, Nicaragua andPanama. module covers Costa Rica, Salvador, El Guatemala, the caseofCentralto to 3 (figure America 1).The the frameworkapplies developed inModules1 Sur -MERCOSUR). presentThe study, Module4d, CommonSouthern (MercadoComúndel Market Community (SADC),the and Module 4c examines 4b centres Africanthe Southern Development on Africanthe East Communityon (EAC); Module AfricaSouthern (COMESA); Module4afocuses the Commonexamines for Market Eastern and tutions ofindividual worldregions. Module4 circumstances the specific to examine andinsti- work presentedto 3 can be applied in Modules 1 to illustratethe frameteaching material how - been followedthe development ofadditional by trade.gender and three moduleshave These two-waythe relationship between studies on theoreticalreview of frameworks andempirical three modules of first The Volume Iprovide a on genderandtrade. policy, andtoformulategender-sensitive policies trade and trade flows of implications gender the society organizations, andacademicstoassess enhancing thecapacityofpolicymakers, civil manual has been developed with the aim of • Figure 1 gendered structure The economyasa Module 1 Overview of the modules in the UNCTADOverviewthe modulesin of teaching manual ongender trade and • impacts women which trade channels through Transmission Module 2 2 1

The teaching The • able to: theendofthismodule,At studentsshouldbe policy implicationsderivedfromthestudy. section concludesthemoduleanddiscusses patternsintheregion.employment The last female affects openness trade how on analysis amacroeconomicempirical and carriesout economy (i.e. agriculture, industryandservices), trade liberalization ineachbroadsectorofthe of review of case studies on the gender impact trade structure foreachcountry. in thenpresentsa It efforts policy andadescriptiveanalysisofthetrade mainstreaming gender of national levels. Section 4 presents an overview the international,equality at regional and legal andinstitutionalframework ongender introduces gender-related inputs, namelythe for women’sparticipationintrade. Section3 also discussestheimplicationsofthesegaps and security (i.e. gender-based violence). It employment, resources, decision-making), access to resources and opportunities (i.e. in thedomainsofcapabilities (i.e. education), The secondsectionexamines thegendergaps region. the in countries the of profiles economic presents a comparative picture of the socio- liberalization policiesinCentral Americaand This modulestartswithabriefoverviewoftrade be highlightedinthismodule. Luna, 2015). These differences and similarities will and (Gibbons terms ofpoliticalempowerment women lagbehindmenineconomiclifeand performance and trade competitiveness export affect inequalities How gender • • • inequalities. participation intrade andreducegender gender-sensitive women’s policiestosupport thefindings of thestudytopropose Interpret ofCentralcontext America and genderedeconomicoutcomesinthe Understand therelationshipbetweentrade and assesstheirimplicationsfortrade inequalities intheCentral Americancountries andusevariousInterpret measuresofgender Module 3 • • • • • • 4d: Central America 4c: MERCOSUR 4b: SADC 4a: EAC 4: COMESA linkages in: Trade andgender Module 4 Trade and Gender Linkages: An Analysis of Central America 4d

1.1. An overview of trade liberalization in integration.4 El Salvador, Guatemala, Honduras, Central America and Nicaragua (named as the Central American Four) have political, cultural, and migratory module Central America has experienced significant integration, share common internal borders, and political and economic changes over the last have a similar type of passport (Gonzalez Diaz, four decades. Some of the countries experienced 2016). armed conflict until the adoption of the Esquipulas Agreement in 1987 and the creation The customs union in Central America was of the Central American Integration System initially established by Costa Rica, El Salvador, in 1990 (Protocol of Tegucigalpa), and then Guatemala, Honduras, and Nicaragua in the succeeded to build a durable peace following the 1960s. Panama has been in the gradual process of Guatemala Peace Accords in 1996. The regional customs union membership since 2013, hence its integration process gained pace along with the tariff and productive structure were significantly peace process, accompanied by economic growth different. The customs union is considered and poverty reduction after 1990 compared to imperfect for a number of reasons. There are the period between 1970 and 1990 (Frigenti, two multilateral exceptions (unroasted coffee 2011). Besides the peace and democratisation and sugar cane) and a few bilateral restrictions process, the structural adjustment process to free intra-regional trade. Moreover, there are marked another major development that has several safeguard clauses and other non-tariff shaped the societies and economies of the region barriers, which are especially prevalent in the since the early 1990s. It emphasised achieving case of Costa Rica. Central American countries macroeconomic balance, increasing the role of have introduced a common external tariff for the private sector, and promoting integration all but 4 per cent of items, which are still under into the global economy (Stenman, 2007). negotiations. They have also introduced a comprehensive common policy on various trade International trade and the promotion of both measures such as non-tariff barriers, safeguard intra-regional and extra-regional integration measures, sanitary and phytosanitary measures, have been central to the development agenda in customs administration, and transit of goods, Central America. This has been partly driven by among others (Campoamor et al., 2018). As part of the small sizes of Central American economies the integration process, in May 2019, the Unified and the need for external markets to exploit Customs Declaration (Declaración Unica Centro economies of scale. Integration was also a key Americana - DUCA) entered into force in the six variable in the Peace Agreements, which had a Central American countries covered in this study. focus on peace, democracy and development It is still in process as a trade facilitation measure (Campoamor et al., 2018). Today the region and is based on a harmonised (one-for-all) has a relatively high degree of trade openness system for customs (Palma, 2019). In 2017, what compared to other developing countries. was called a “deep integration” customs union However, there are significant differences in agreement was reached between Guatemala export structures across the region, as discussed and Honduras, with El Salvador joining in 2018. in section 4.2. In this way, the countries of northern Central America are advancing at a faster pace with the The origins of Central American regionalism, one integration of their economies (Martinez, 2019). of the oldest in Latin America, date to the Letter of the Organization of Central American States The United States is the most important extra- (Organización de Estados Centroamericanos regional trading partner of Central American - ODECA) of 1951 (Martinez, 2019) and the countries, which have gained preferential access signature of the General Treaty on Central to the United States market since 1983 as a result American Economic Integration between El of the Caribbean Basin Initiative, along with duty- Salvador, Guatemala, Honduras and Nicaragua free access to approximately 75 per cent of their in 1960 (Costa Rica acceded in 1962).3 Article I of exports to the United States by 2000 (Lopez and Chapter I of the treaty called for the creation of Shankar, 2011). The Dominican Republic–Central a common market (Central American Common America Free Trade Agreement (DR-CAFTA), the Market - CACM) and a customs union. The first free trade agreement between the United Central American Integration System (Sistema States and a group of developing countries, de la Integración Centroamericana - SICA) was was signed by Costa Rica, Dominican Republic, established on 13 December 1991 with the signing El Salvador, Guatemala, Honduras, Nicaragua of the Tegucigalpa Protocol by Costa Rica, El and the United States on 5 August 2004 with Salvador, Guatemala, Honduras, Nicaragua an implementation period that ends in 2025.5 and Panama to extend earlier cooperation Besides trade liberalization for goods and services, and manage different dimensions of regional DR-CAFTA governs other areas such as customs

3 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 4 Nicaragua aslower-middle-income countries. economies; andElSalvador, Honduras and Rica andGuatemalaasupper-middle-income Panama asahigh-incomeeconomy; Costa World Bank’sJune2019classificationlists terms ofpercapitaincomegroupings, the levelsofGDPpercapita.have thelowest In region. Incontrast, Honduras andNicaragua Rica, GDPpercapitainthe hasthehighest in Central America. Panama, followed by Costa economy andbyfar populouscountry themost value,[HDI] rank). Guatemalaisthe largest Index (HumanDevelopment development ratio,headcount Giniindex), andhuman density), povertyandinequality(poverty GDP (total, realpercapita), population(total, indicators foreachcountry. They include countries withthekeysocio-economic Figure 2presentsthemapofCentral American 1.2. index, income inequality, asmeasuredbytheGini All countriesintheregionhavehighlevelsof Panama. and Guatemala, inCostaRicaand andlowest ratio in Honduraspoverty headcount is highest development group ofcountries. development Honduras correspondtothemediumhuman whereas ElSalvador, Nicaragua, Guatemalaand countries,the groupofhighhumandevelopment Caribbean BasinInitiative. of their exports through the for most market enjoyed duty-free accesstotheUnitedStates DR-CAFTA developingcountrymembersalready for UnitedStatesexportstotheregion, since occurred liberalization tariff of terms in change labour andenvironmentalprotection. The major intellectual property rights, transparency, and investment, telecommunications, e-commerce, barriers totrade, procurement, government administration andtrade facilitation, technical countries. free trade agreementsinvolvingoneormore a bloc, Central Americancountrieshave other Besides theseregionalagreementssignedas endsin2027.an implementationperiodthat has been provisionally applied since 2013 with dialogue, cooperation andtrade. The trade pillar coversthreemainpillars:agreement political with the European Unionon29June2012. The Union -Central Americaassociationagreement Nicaragua, andPanama –signedtheEuropean Costa Rica, El Salvador, Guatemala, Honduras, bloc, theCentral Americancountries–namely As anotherregionalfreetrade asa agreement

American countries American Socio-economic profiles of Central 9 asiscommoninLatinAmerica. The 10 Panama andCosta Ricacorrespondto 7

6 11

activity in2018. significant relatively share ofmanufacturing sector intotaleconomic a with countries the were Nicaragua (16 percent)andCostaRica(13 per cent) Salvador, Guatemala andHonduras (all18 percent), inPanama.cent Within theindustrialsector, El ranging inCostaRicato30 per from21 percent activity, economic of share significant a holds sector inNicaraguato 17 percent in2018. The industrial activity, varying inPanama from around2 percent shareofeconomic agriculture holdsthelowest de-industrialisation. Forallcountriesunderreview, development. This seemstobeasignofpremature cent, high levels of which is usually expected at Rica Costa withashareofservicesabove 70 per stands out 3). (figure 2018 in America Central in shareofeconomicactivityinallcountries largest economy, theservicessectorrepresented the tothesectoral With respect structureofthe al.,region (Hallocket 2018). increased out-migration ofwomenfromthe rates arehigh. Allofthesefactors explainthe girlfriends ofgangmembers, andfemicide unpunished, womenareforced tobecomethe often allowgender-based crimestogo and Honduras, socialnormsandlegalsettings Triangle countriesofElSalvador, Guatemala years.in recent EspeciallyintheNorthern in their out-migration toNorthAmerica havedriventheincreasechallenges that America. Women face furthergendered women to flee in largenumbers from Central to reunifywithrelativespushbothmenand groups, entrenchedpoverty, andthedesire form ofviolencegangsandorganized-crime decade.the last Instability intheregion the UnitedStatesfromCentral Americaover immigrants whohavearrivedinMexicoand anincreasingshareofWomen alsorepresent and Panama. Nicaragua, inCostaRica whilelessthan1 percent Honduras, inGuatemalaand and12 percent inElSalvador,were 21 percent in 20 percent In 2018, personalremittancesasashareofGDP available. whensocialsecurityisnot important who staybehindarewomen. This isparticularly remain inthehomecountry. Manyofthose in termsofsupportinglivelihoodsthosewho partsofCentral roleinmost America important Migration andpersonalremittancesplayan countries, andmorepronouncedlyinGuatemala. and Guatemala. itsshareinall Agriculture lost (in orderofimportance)inPanama, Nicaragua and theshareofindustrial sectorincreased Costa Rica, Guatemala, Honduras andElSalvador, of servicesincreased(inorder ofimportance)in 12

13 Between2000and2018, theshare Trade and Gender Linkages: An Analysis of Central America 4d

Figure 2 Selected economic and social indicators, 2018 module Guatemala Honduras

GDP : US$78.5 billion GDP : US$24 billion GDP per capita : US$4,549 GDP per capita : US$2,506 Popula�on : 17.2 million Popula�on : 9.6 million Popula�on density : 161 people per sq. km Popula�on density : 86 people per sq. km Gini index : 48 (2014) Gini index : 52 (2018) Poverty ra�o : 24 per cent (2014) Poverty ra�o : 30 per cent (2018) HDI value & rank : 0.651 & 126th HDI value & rank : 0.623 & 132nd

El Salvador

GDP : US$26.1 billion GDP per capita : US$4,058 Popula�on : 6.4 million Popula�on density : 310 people per sq. km Gini index : 39 (2018) Poverty ra�o : 8 per cent (2018) HDI value & rank : 0.667 & 124th

Nicaragua

GDP : US$13.1 billion GDP per capita : US$2,021 Popula�on : 6.5 million Popula�on density : 54 people per sq. km Gini index : 46 (2014) Poverty ra�o : 13 per cent (2014) HDI value & rank : 0.651 & 126th Costa Rica Panama

GDP : US$60.1 billion GDP : US$65.1 billion G DP per cap ita : US$12,027 GDP per capita : US$15,575 Popula�o n : 5 million Popula�on : 4.2 million Popula�on density : 98 people per sq. k m Popula�on density : 56 people per sq. km Gini ind ex : 48 (2018) Gini index : 49 (2018) Poverty ra�o : 3.6 per cent (2018) Poverty ra�o : 5.2 per cent (2018) HDI value & rank : 0.794 & 68th HDI value & rank : 0.795 & 67th

Source: World Bank, World Development Indicators database (accessed on 24 June 2020) for all the indicators except the Human Development Index (HDI) value and rank, which are based on UNDP (2019). Note: GDP and GDP per capita figures are measured in current United States dollars. Population density is measured as persons per square kilometre of land area. GDP and population figures and HDI value and rank are for 2018.

Figure 3 Sectoral composition of economic activity, 2000 and 2018 (percentage shares)

100

80 55 54 55 70 62 60 58 63 67 65 68 63 67 74 60 75

40 21 30 31 22 28 28 28 29 25 20 28 32 28 21 18 30 10 24 20 10 15 12 17 5 8 5 10 7 5 5 0 2 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC

Agriculture Industry Services

Source UNCTADStat database (accessed on 24 June 2020). Note: The data represent gross value added by kind of economic activity expressed as percentage shares of total value added. LAC: Latin America and the Caribbean.

5 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 6 American andtheCaribbean (LAC) average in in theregionperformedwellabove theLatin periods,2002 and2014–2018 andallcountries per capitaGDPgrowthrate betweenthe1998– and except Nicaragua hadariseintheiraverage GDP growth inequality levels. AllCentral Americancountries capita corresponding reductionsinpovertyand per significant From the1990sonward, theregionrecorded Note: LAC:the Caribbean. and LatinAmerica Source: World Development Indicatorsdatabase (accessedon24June2020). constant local currency. LAC:the Caribbean. and LatinAmerica Note: Source: World Bank, World Development Indicatorsdatabase (accessedon24June2020) 6 Figure 5 Figure 4 4 2 5 3 1 0 0 0 0 0 0 0 - 0 1 2 3 4 5 1 The per capita GDP growth rate percapitaGDPgrowth The the annual refers percentageto rate basedon prices market growth ofpercapitaGDPat Costa Rica Costa Rica Exports merchandise GDP growth performance,GDP growth 1998–2002and2014–2018averages (percentage change) Per capitaGDPgrowthrate1998-2002 GDP growthrate1998-2002 El Salvador El Salvador Trade openness indicators, 2014–2018average (percent ofGDP) Guatemala Guatemala Exports services Honduras Honduras achieve scaleeconomies(Frigenti, 2011). firms to exploit their comparative advantage and domestic economies were too small for domestic oftheseagendas,component becausethe inpart The promotionofinternationaltrade was akey intheregion.modernization agendascarriedout significant the of also but process peace the of 4). (figure only not These achievementsweretheresult performance growth GDP of terms Imports merchandise Per capitaGDPgrowthrate2014-2018 GDP growthrate2014-2018 Nicaragua Nicaragua Panama Panama Imports services LAC LAC Trade and Gender Linkages: An Analysis of Central America 4d

As a result, Central America today is characterized autonomy (UNDP, 2019). Gendered power relations by a high degree of trade openness, reflecting shape economic institutions, transactions, and the influence of intra- and extra-regional trade relations, and gender bias operates and affects module liberalization efforts and their small economies, women in their economic roles as workers, among other factors, as depicted in figure 5. producers, traders, consumers and taxpayers. Merchandise exports predominate in El Salvador, Any economic analysis must examine the Guatemala, Honduras, and Nicaragua. In Costa economy from a gender perspective, taking Rica, services exports are close to merchandise into account both productive and reproductive exports in terms of share in total exports, activities. Module 1 identified three domains of whereas in Panama services generate more gender equality that are important for women’s export revenue than merchandise exports. participation in the economy: (i) capabilities, which refers to achievements of basic human abilities In the first months of 2020, the world experienced (e.g. education and health); (ii) access to resources an outbreak of the coronavirus disease (COVID- and opportunities, which refers to conditions that 19). COVID-19 was declared a pandemic and social enable individuals to earn adequate livelihoods distancing measures were introduced all around through access to economic assets such as land, the world, with an unprecedented disruption property and infrastructure, access to income and in economic activity. According to the June employment, and by exercising their decision- 2020 projections by the International Monetary making power; and (iii) security, which refers to Fund (IMF), the world economy is expected to vulnerability to violence and conflict. contract by 4.9 per cent in 2020 and to then have a gradual recovery process. Since the impact on As discussed in Module 3, existing gender low-income households is acute, the progress in inequalities in these domains have direct poverty reduction achieved since the 1990s has implications for participation in trade and export been imperilled (IMF, 2020). competitiveness. For example, gender inequalities in the labour market (e.g. occupational As a result, the COVID-19 pandemic of 2020 has segregation and the gender wage gap) may led to the worst economic and social crisis since render female workers “sources of competitive the Great Depression, resulting in a combination advantage” for exporting firms in international of both domestic and external shocks around markets through a cost-cutting strategy. Similarly, the world. LAC is no different from the rest of women may be “under-achievers of competitive the world. The COVID-19 pandemic is expected advantage” as self-employed producers and small to have negative repercussions for employment, entrepreneurs due to gender inequalities in access poverty and inequality in the region. The to resources, assets, market information, etc. It is Economic Commission for Latin America and therefore critical to reduce gender inequalities in the Caribbean (ECLAC) projects that the LAC these domains and support gender equality for region as a whole will contract by 5.3 per cent, women’s successful participation in trade. This experience an increase in unemployment section compares gender inequalities among rate by 3.4 percentage points (resulting in an the Central American countries in these three unemployment rate of 11.5 per cent), and have domains. an increase in the poverty rate by 4.4 percentage points, leading to a poverty rate of 34.7 per cent 2.1. Capabilities domain in 2020. The volume of global trade is expected to contact by between 13 and 32 per cent. Let us first examine the international stance of Trade volumes and prices in LAC, especially for the Central American countries according to the commodities, have been hurt by the economic United Nations Development Programme (UNDP) contraction in China, the United States and Gender Inequality Index (GII) and key indicators European Union. Reduced remittances from of education, labour force participation, and migrants and declining tourism activity also income (table 1).14 Based on the GII values, all hurt the countries in LAC (ECLAC and ILO, 2020). countries except Costa Rica perform worse than the LAC average on gender equality.

2. Gender-related outputs: An In terms of education outcomes, women have assessment of the various slightly better educational attainment than men dimensions of gender inequalities in all countries but El Salvador. Overall, the gender gap in adult literacy is low in the region. For most Gender inequality remains a significant barrier of the countries, average years of schooling are to human development despite some progress higher for females than for males. This finding since 1990, negatively affecting women’s ability contrasts that of most developing countries, to develop their capabilities, empowerment and where education favours boys. This is partly

7 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 8 women would bring significant gains for GDP for gains significant bring would women increasing thelabour force participationof Particularly incountries withagingpopulations, inPanamain Guatemalaandlowest (table 1). ratio ofthefemaletomaleLFPRs) ishighest Similarly, thegender gap intheLFPR(i.e. the inPanama. inGuatemalaand53 percent cent region, the femaleLFPRranges between41 per of women, as discussed further below. Across the and domesticworkfalls mostly ontheshoulders in allthecountries, partlybecauseunpaidcare lower labour force participation rate significantly (LFPR) than men a have Women outcomes. 2. This inturnleadstochangeslabour market in production, asdiscussedindetailModule outcomesthroughsectoraldistributional shifts and incomeopportunities. Trade leadsto implicationsforwomen’semployment has direct resources andopportunities. Trade liberalization assess genderinequalityinaccesstoeconomic are among the key indicators to employment As explainedinModule1, incomeand 2.2. al.,et 2008). violence(Cunningham better protectedagainst schooltobe girlsstayat ispreferredthat while it anearlyage, workingat boystostart expect norms social difference: this explain also norms of higherlevelseducation(Nopo, 2012). Gender completion thanboys, andbytheirattainment explained bygirls’ higherprobability ofschool a Note: LAC:the Caribbean; and LatinAmerica F: Female, M: Male Indicators database (accessedon24June2020). Source: Costa Rica El SalvadorEl Guatemala Honduras Nicaragua Panama LAC

The adult literacy adult The rate isfor 2018inCosta Rica, Salvador, El Honduras, Panama andLAC, 2015inNicaragua, and2014inGuatemala. Table 1

domain Access to resources andopportunities UNDP (2019) for all the indicators except the adult literacythe adult (2019)for rate,the indicatorsexcept all UNDP whichcomesthe from World Bank’s World Development Inequality Gender Index 0.492 0.386 0.455 0.397 0.285 0.461 0.461 Inequality (ranking) Gender Index 109 109 105 118 Gender inequality gender index indicators, andselected 2018 92 61 - Development (ranking) Human Index 126 126 124 132 68 67 - Adult literacyAdult 94.9 76.4 93.4 82.8 97.9 87.2 87.3 F rate a 96.0 86.8 94.3 82.4 97.8 87.1 91.1 M cent arewomen,cent liveinurbanareas, 66 percent employment, ortraining. Ofthisgroup, 73 per ofallyoungpeople,cent ineducation, arenot the agesof15and29, correspondingto22 per 30 million young womenandmen between group inLAC. around isestimatedthat It Youth inparticularconstituteahighlyvulnerable capacity ofthesecountries. al.,et 2017). This couldinturnincreasethe export force participation, suchasGuatemala (Cadena countries withhighgenderinequalityinlabour potential GDPgainswouldbeparticularlyhighin such McKinsey GlobalInstituteestimatesthat parity inthelabour market. Forexample, the growth, inadditiontothedesiredgender (OECD et al., et (OECD 2016). mostlybywomen role ofunpaidworkcarriedout young children in the household. This reflects the For women, increases withthenumberof it education andsocio-economic statusimprove. employment, ortraining falls whenlevels of 2016). beingineducation,The probability ofnot come fromlower-income households(ECLAC, sociallymarginalizedyoungpeople that most women (8 percent), andtheyconstitutethe (30 per cent) falls in this category than young reason. A significantly higher share of young men employment, or training anyobvious without Finally, ineducation, ofthemarenot 17 percent 6 and before, afterhaving worked for paidemployment domestic andcarework, aresearching 18 percent (mostlywomen)performunpaid 55 per cent Mean years of 10.4 6.6 6.4 6.6 8.6 8.8 7.1 schooling F 6.6 9.9 6.5 6.5 8.5 8.5 7.3 M 39.9 38.4 48.3 74.8 34.2 59.7 53.8 Population least some least per cent are first-time job seekers. job first-time are cent per secondary education F with at with at 68.4 46.6 32.6 59.3 43.3 52.3 37.2 M participation participation Labour force 50.7 45.7 46.1 52.5 47.2 51.8 41.1 F rate 85.0 78.9 80.5 74.6 83.7 83.7 77.2 M gross national 10,566 16,106 4,864 9,836 5,234 4,277 3,214 income per Estimated F capita 18,004 24,788 19,015 9,970 8,944 5,305 5,318 M 15

Trade and Gender Linkages: An Analysis of Central America 4d

The raw gender income gap (i.e. the ratio of that policies to reduce poverty are not benefiting female to male GNI per capita) is also high in all men and women equally (box 1). the Central American countries. In Guatemala, module where this gap is the largest, women on average 2.2.1. Employment patterns earn 48 per cent of the average income of men. In Nicaragua, which has the smallest gap, women’s Section 2.1 showed that girls in general perform average per capita income corresponds to better than boys in education in Central America, 80 per cent of men’s (table 1). The raw earnings resulting in a low or non-existent gender gap reflects both differences in qualifications gap in educational attainment. Despite this such as education and experience, as well as achievement in education, the traditional gender the influence of discriminatory factors faced division of work and social norms remains by women (e.g. unequal access to resources, a major constraint for women who want to discriminatory hiring practices and wages, lower enter the labour market in LAC. As a result, hours of work due to unpaid work burden) in important disparities occur in terms of labour the economy. The gender earnings gap and its market outcomes. The sectoral distribution of unexplained/discriminatory component tend to employment shows a clear gender pattern in be high among low-income workers compared to Central America.16 Most women work in the high-income workers (Nopo, 2012). The incidence services sector, as is common in LAC.17 For men, of poverty is also higher among women than it agriculture and industry are relatively more is among men across the region, and this shows important sources of employment (figure 6).

Box 1 Femininity index of poor households

The femininity index of poor households compares the percentage of poor women and men in the 20-59 year-old age category and shows how many times the incidence of poverty among women is higher than it is among men. An index above 100 shows a higher incidence of poverty among women than men. For example, in 2017 in Latin America, on average, there were 113 women for every 100 men who live in poor households. The index values for the Central American countries all show that more women experience poverty then men. This figure is particularly high in Panama and Costa Rica, the two countries with the highest GDP per capita levels among the Central American countries. Hence, economic growth and resulting gains in GDP per capita seem to be ac companied by an increasing gender gap in poverty.

Box table 1.1 Femininity index of poor households Country Year Index value

Nicaragua 2014 102.6

Guatemala 2014 104.4

El Salvador 2017 106.3

Honduras 2016 106.6

Costa Rica 2017 128.9

Panama 2017 130.0

Latin America 2017 113.0

Less than 12 per cent of female employment The services sector presents a different was in agriculture in all the countries, a feature picture. Between 71 per cent of women in common to LAC as opposed to other developing Honduras and 85 per cent in Costa Rica were regions. In contrast, agriculture is the most employed in services in recent years (figure 6). important sector of employment for men in Women’s relatively high levels of educational Guatemala (43 per cent), Honduras (44 per cent) attainment and migration to urban areas to and Nicaragua (45 per cent). Similarly, industry take on services jobs are the two major factors is a more important source of employment for that explain this phenomenon. The region is men than for women in all six countries. The also characterized by women’s emigration, gap is particularly significant in Panama and especially to the United States to work as Costa Rica. caregivers.

9 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 10 surveys and aresurveys for 2012inNicaragua, 2017inGuatemala, and2018forthe countries.the remainder of Source: El Salvador andGuatemala(figure 7). in(decreasingorder)Honduras,cent Nicaragua, inindustryisabove 30 per female employment inallsixcountries.employment The shareof oftotalservices hold morethan45 percent divide in sectoral patterns. employment Women gender the reflects employment of share female servicesisthesectorwithlargest That Source: database ILOStat (accessedon25June2020). Dataarethe householdsurveys. from Figure 7 Figure 6 1 Guatemala El Salvador 0 6 9 8 4 Costa Rica 2 5 3 7 Nicaragua 1 Honduras 0 0 0 0 0 0 0 0 0 0 0 Panama UNCTAD calculations databasethe ILOStat using data from (accessed on 5 November 2019). Data are from household Female

Costa Rica 1998 0 Female share of total employment in the broadFemalethe economytotal in share of of employment sectors (percent) 2019

Male 1998 2019 Sectoral composition by ofemployment sex (percent shares) Female El Salvador 8,5 1998 1 0

10,9 2018 Male 13,0

14,2 1998 A g r

i 2018 c Services Female u 2 l t 0 Guatemala

u 1998 r 20,8 e

21,7 2017 23,4 Male 1998 I n 26,5 d Industry u employment inallcountries except CostaRica.employment labour accounted for47 oftotal per cent wholesale andretailtrade andrepair, female the traditional genderdivisionoflabour. In reflecting countries, the all in sectors intensive social servicesarepredominantlyfemale- services (i.e. tourism), thepublicsectorand Within services, accommodationand food 2017 s 3 Female t 0 r y 30,4

Honduras 1998

33,1 2018 S Male e 36,0 36,0

r 1998 v Agriculture i c 4 e

0 2018 s Female

Nicaragua 2003 2014 46,4 Male 2003 5 0 50,1 49,5 2014 Female

Panama 1998 53,4 2018 57,0 Male 58,4

6 1998 0 2019 Trade and Gender Linkages: An Analysis of Central America 4d

Table 2 Female share of total employment in major sub-sectors (per cent) Costa Rica El Salvador Guatemala Honduras Nicaragua Panama module

Manufacturing 32.9 46.3 44.6 50.9 51.9 43.0 Wholesale and retail trade, 37.2 54.2 47.2 56.1 58.4 47.5 repair Transport, storage, 14.8 13.3 9.2 10.1 9.2 16.3 communication Accommodation and food 58.2 72.9 71.0 79.9 77.4 61.8 services Business and administrative 32.9 33.3 31.8 38.7 28.4 42.3 services Public administration, community, social and other 63.8 60.0 61.8 66.3 67.8 63.8 services and activities

Source: UNCTAD calculations based on data from the ILOStat database (accessed on 5 November 2019). Data are from household surveys and are for 2012 in Nicaragua, 2017 in Guatemala, and 2018 for the remainder of the countries.

The female share of employment is also quite Rica is an exception, where this sector accounts high in manufacturing within the industrial for similar shares of total employment for sector, surpassing 50 per cent in Honduras and men and women (table 3). Women also hold Nicaragua (table 2). This is explained in part by larger employment shares in education, health, the importance of textile and apparel industries, social work, tourism and activities of private which are highly intensive in female labour. households, extraterritorial organizations, and services n.e.c. – all jobs that essentially coincide The employment distribution of women and with domestic work – in line with the traditional men across services sub-sectors show certain division of labour. In contrast, men hold a larger gender patterns. Wholesale and retail trade share of employment in the transport, storage is a more important source of employment and communications sub-sectors in all countries for women than for men in most countries, and in finance in all except Panama. Overall, men employing between 18 per cent of women in tend to hold relatively more positions in higher- Costa Rica and 30 per cent in El Salvador. Costa skilled services than women in Central America.

Table 3 Composition of services employment by sub-sectors and sex (per cent)

Costa Rica El Salvador Guatemala Honduras Nicaragua Panama

F M F M F M F M F M F M Wholesale and retail 17.7 17.7 29.7 17.7 28.8 16.4 25.7 13.2 27.7 15.9 21.2 16.3 trade, and repair Hotels and 9.9 4.2 14.8 3.9 9.7 2.0 10.5 1.7 9.5 2.2 8.2 3.6 restaurants Transport, storage and 2.9 9.9 1.4 7.2 1.0 5.3 1.1 6.1 0.8 6.1 3.6 12.6 communications Financial intermediation, real 8.7 10.6 4.9 6.9 4.5 4.8 3.9 4.0 1.9 3.9 9.0 8.5 estate and business activities Public administration and 3.3 4.2 2.7 5 2.3 2.9 3.0 2.3 2.6 3.5 6.9 6.0 defence; compulsory social security

Education 11 3.7 4.9 1.9 8.0 2.4 5.6 1.9 5.7 2.1 9.1 2.9

Health and social 6.5 2.3 4.1 1.5 3.6 0.9 3.3 0.9 2.9 0.8 9.2 2.2 work Other community, social and personal 7.1 3.7 5.6 3.7 6.4 2.2 9.7 3.9 8.1 3.4 6.1 3.8 service activities Activities of private 17.7 1.9 10.6 1.0 8.2 0.6 7.9 1.0 8.9 1.3 8.7 0.8 households, etc. Source: UNCTAD calculations based on data from the ILOStat database (accessed on 5 November 2019). Data are from household surveys and are for 2012 in Nicaragua, 2017 in Guatemala, and 2018 in the remainder of the countries. Note: The percentages add up to the share of the services sector in total female employment. F: Female; M: Male.

11 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 12 2018 in El Salvador,2018 inEl 2017inGuatemala andHonduras, and2012 inNicaragua. Source: between 41 rangesemployees intotalfemaleemployment men and women – areemployees. The share of In allcountriesintheregion, workers– most Source: database ILOStat (accessedon23June2020), basedonhouseholdsurveys. It is a particularly significant form of work for women inHonduras (41 percent), Nicaraguaof work form significant particularly a is It commontypeofemployment. the secondmost one ofthevulnerable formsofemployment, is work, Own-account 8). (figure Rica Costa in cent Figure 9 Figure 8 100 60 90 80 40 20 50 30 70 10 20 30 40 50 60 70 80 90 0 10 0 ILOStat databaseILOStat (accessed on 23 June 2020). Data are from household and surveys are for 2019 in Costa Rica and Panama, Female 4 3 F ,2 Costa Rica e 4 m C 2 1998 ,7 o a per cent in Hondurasper cent and 76 s Employees l t e a

Male 2019 3

6 R M i 3 c 2 a a 1998 ,6 l Employment compositionEmployment by work status andsex (percent shares) e Female 7

0 2019 F ,4 e El Salvador 6 m E Informal employment shares byInformal employment sex (per cent shares) 9 1998 l

a ,6 S l a Employers e l 6

v 2018 Male 7 a ,2 M d 5 6 o

a 1998 ,7 r l e 8 Female 2018 0 F ,2 e Guatemala 7 m G 8 Total 1998 u ,3 a a l e Own-account workers t 8 e 2017 per Male 0 m M ,1 6 a 8 a

l 1998 a ,5 l e Non-agricultural differences in GDP per capita across Central across per capita American countries. GDP in differences of vulnerable areinlinewiththe employment women. The differences with respect to the share ofemployed representing morethan10 percent and Honduras, Guatemala in significant also is ofvulnerableother component employment, 36 per cent). family Contributing work, the (38 per cent), ElSalvador andGuatemala(both

Female 2017 8 F 1 e 79,3 m Honduras H 1998 a o l n e d 8 2018 Male u 3 ,6 M r 7 a 1 a 1998 s ,7 l e Female

8 2018 F 2 e ,4 Nicaragua Contributing familyworkers 7 m N 8 1998 ,7 a i c l a e r

8 2014 Male a 1 g ,3 M 7 u 0 a 1998 a ,7 l e Female 5 2014 F 0 e ,9 m 4 Panama

6 1998 P a ,8 a l n e 5

a 2019 Male 4 m ,2 M 4 a a

6 1998 l ,6 e 2019 Trade and Gender Linkages: An Analysis of Central America 4d Informal employment overwhelmingly employment composition, among other factors. dominates employment for both men and The most affected sectors include tourism (airlines, women in El Salvador (70 per cent of female accommodation, restaurants and hotels), manu- module employment), Guatemala (80 per cent), Honduras facturing, trade, real estate and administrative (81 per cent) and Nicaragua (82 per cent) (figure activities. Other sectors that are expected to have a medium-high impact are transport and stor- 9). Women have a higher level of informal age, and entertainment and cultural activities. employment than men in the non-agricultural In LAC, 42.4 per cent of employment is in high- sector in all countries except Panama. Domestic risk sectors and 16.5 per cent is in medium-high- workers and street vendors are among the risk sectors. Workers in these sectors are likely to common informal jobs and they are more likely face layoffs, wage cuts and reductions in working to be held by women. hours (ECLAC and ILO, 2020). Overall, employment patterns by work status The gender impact of the pandemic on labour and informality are in line with the development markets depends on the distribution of male and patterns as measured by GDP per capita. However, female employment in each sector; 44 per cent of women are disproportionately employed in low- employees in high-risk sectors in LAC are women. productivity sectors across the six countries However, those in low-risk sectors such as health regardless of the differences in their GDP per and education – both female-intensive sectors capita levels (box 2). This shows a distinct pattern – face worsening working conditions. Women of gender segregation in the labour market in all also face a sharp increase in their care burden – the countries covered in this study. both paid and unpaid. Finally, the impact of the The impact of the COVID-19 pandemic on labour pandemic is felt disproportionately by informal markets depends on production structure and workers who do not have access to quality health

Box 2 The gender divide by productivity levels in Central America

Latin America has strong labour market segmentation, which translates into a high level of income inequality. This can be illustrated by the employment distribution by productivity levels. The Economic Commission for Latin America and the Caribbean (ECLAC) classifies sectors based on average labour productivity as either low-productivity (agriculture, wholesale and retail trade and services), medium-productivity (construction, manufacturing and transportation), or high-productivity (finance, electricity and mining). Ac cording to the ECLAC classification, women are disproportionately employed in low-productivity sectors. These activities are characterized by lower incomes, lower education, limited social security coverage, job instability and absence of work contracts (box figure 2.1). Men are employed to a greater extent in medium- and high-productivity sectors, which provide better working conditions, require a higher level of education, and use technology to a greater extent. The gender divide in employment distribution by productivity levels is particularly strong in Costa Rica and Panama, the two economies with the highest GDP per capita levels in the region.

Box figure 2.1 Distribution of employed population by productivity level and sex (per cent shares) 90

0 Costa Rica El Salvador Guatemala Honduras Nicaragua Panama Latin America Female Low Female Medium Female High Male Low Male Medium Male High

Source: Economic Commission for Latin America and the Caribbean, 2019, Gender Equality Observatory for Latin America and the Caribbean (https://oig.cepal.org/en/indicators/distribution-total-employed-population-productivity-level-and-sex). Data are for 2017 for Costa Rica, El Salvador, Panama and Latin America, for 2016 for Honduras, and for 2014 for Guatemala and Nicaragua.

13 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 14 figure was only 30 only was figure connectionby2017,a mobileInternet thesame oftheirpopulationwith had provided80 percent LAC (overall), Chile, Brazil, CostaRicaandUruguay acrossandwithincountries.to theInternet While teleworking. There are large disparities in access infrastructure is needed for working remotely or the pandemic. For example, adequate technology impactsof conditions shapesthelabour market tochangingwork The ability ofcountriestoadapt pandemic onlabour marketsinCentral America. seems to be significant gender implications of the there 9). Hence (figure pandemic the by most the affected is which sector, non-agricultural the in a higherrate thanmen ofinformalemployment of women(tables 2and3). Moreover, womenhave share significant a employ and sectors intensive trade andaccommodationservicesarefemale- In Central America, bothwholesaleandretail andILO,during economicinactivity(ECLAC 2020). savings capacitytomakeupfortheincomeloss workers alsoface greaterriskofinfectionandless insurance.such asunemployment Informal mechanisms services andincomereplacement Guatemala, and2017inCosta Salvador. RicaandEl Source: andILO,policies (ECLAC 2020). oftheirreturn-to-work theheart measures at occupationalsafetyandhealth implement term policyresponses, countriesalsoneed to issued lawsonteleworking. Besides theshort- such asPanama, ElSalvador andChile, recently as inBrazil andCostaRica. Othercountries, issued standardstofacilitate itsimplementation, regulated teleworkingencouraged itsuseand Honduras andNicaragua. InLAC, countriesthat Figure 10 2 2 1 1 0 0 0 5 5 5 CEPALSTAT database (accessedon23June2020). Dataare for 1998inNicaragua, 2009inHonduras, 2011inPanama, 2014in Costa Rica Proportion of time spent onunpaiddomesticandcaretime spent work of Proportion by sex (percent of24hours) 8 ,7 2 2 ,6 per cent in Guatemala, Haiti,Guatemala, in cent per El Salvador 7 ,0 2 0 ,2 Guatemala 2 ,6 1 9 Male ,5 quarantine andILO, (ECLAC 2020). experienced in many counties during the the increasedgender-based violencebeing such ashotlinesneedtobeadaptedaddress to healthandsocialsecurity. Policyinstruments of whomareinformal, andensuretheiraccess be extendedtofemaledomesticworkers, many example, incometransfer programmes needto 19 pandemicneedtobegender-responsive. For informal work, policy responses to the COVID- in servicesandthehighershareofwomen Given theconcentration offemaleemployment their incomelevel(ECLAC, 2016). on uniform amongwomenanddependsinpart Guatemala. The unpaidworkburdenisalsonot ofGDPinElSalvador per cent and work is18-19 is estimated theeconomicvalue that ofunpaidhousehold it example, For value. significant recordedinnationalaccounts,is not hasa it work domestic unpaid though Even 10). (figure 7.5 timesmoreforwomenthanmeninGuatemala times more for women than men in Nicaragua to ranges menspendonit from1.9 and thetimethat that time women spendonunpaiddomesticandcarework the between difference The region. women. This isthecaseforCentral America by isdisproportionatelycarriedout work that care and domestic unpaid of influence the reflect partially Gender inequalitiesinthelabour market 2.2.2. Female Honduras 4

,3 Time use 1 7 ,3 Nicaragua 1 2 ,1 2 2 ,9 7 Panama ,6 1 8 ,0 Trade and Gender Linkages: An Analysis of Central America 4d

Figure 11 Account ownership at a financial institution or with a mobile money-service provider, 2017 (per cent) module

80 75,5 70 60,9 58,6 60 50,2 50,9 52,0 50 46,4 42,1 41,0 42,3 40 37,6 37,4

30 24,4 24,8 20

0 Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC

Female Male Source: World Bank, Gender Statistics database (accessed on 7 November 2019). Note: LAC: Latin America and the Caribbean.

2.2.3. Access to finance and land institution is quite limited for both men and The gender gap persists in account ownership at women in the region (table 4). a financial institution or with a mobile-money- Land ownership is important for both its role in service in all Central American countries. El agricultural production and its use as collateral Salvador and Nicaragua have both the lowest while accessing credit. Figures on land ownership rates of account ownership for men and women are only available for a few countries and are and the largest gender gap among the countries not up to date. The share of female agricultural in the region (figure 11). holders in total agricultural holders, for example, Access to credit is especially critical for women was 29 per cent in Panama in 2001 and 23 per cent farmers and business owners to start or expand in Nicaragua in 2013, the two highest rates among their enterprise, as they often possess fewer the countries for which data were available.18 resources and assets than men. As opposed to Overall, there seems to be a high degree of gender account ownership, borrowing from a financial inequality in access to land in the region.19

Table 4 Sources of and motivation for borrowing by sex (percentage of population age 15+)

Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC

Borrowed from a financial institution

Male 15 9 11 14 11 9 11

Female 13 8 9 11 11 7 9

Borrowed from a financial institution or used a credit card

Male 25 14 14 18 14 15 24

Female 18 10 12 11 13 11 19

Borrowed from family or friends

Male 16 14 13 17 10 13 17

Female 14 7 13 13 10 8 14

Borrowed to start, operate or expand a farm or business

Male 10 7 10 6 5 11 7

Female 7 4 6 7 4 7 4

Source: World Bank, Global Findex database (accessed on 7 November 2019). Note: LAC: Latin America and the Caribbean.

15 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 16 involved inthedesignandimplementationof ofpoliticaldecision-makingbodiestobe be part in politics, firms and households. Women need to women participateindecision-makingprocesses international trade alsorequiresevaluating how Examining women’srolesintheeconomy and 2.2.4. Guatemala, 2012for Honduras andNicaragua and2009for Panama. Source: positions isfor 2018forthe countries all andLAC. (LAC). ofseatsheldbywomeninnational proportion The parliaments isfor ofwomeninministerial-levelthe proportion 2019and Rica andPanama, Salvador, 2016inEl Honduras andNicaragua, 2017inGuatemala,the Caribbean and and2019inLatinAmerica Source: Figure 13 Figure 12 Guatemala 2 3 4 5 6 El Salvador 1 Nicaragua 0 0 Honduras 0 0 0 0 0 Panama

Decision-making power World Bank, World Development Indicators database (accessedon24June2020). Dataare for 2014for Salvador, El 2015for World Bank, World Development Indicatorsdatabase (accessedon24June2020). indicatorsare Firm for 2010inCosta Proportion ofwomentoProportion physical subjected and/or sexual 12months (per cent) violencethe last in Costa Rica 0 El Salvador Firms withfemaletopmanager Firms withfemaleparticipationinownership Proportion ofwomeninministeriallevelpositions Proportion ofseatsheldbywomeninnationalparliaments 2 Indicators (percent) ofdecision-making Guatemala 4 Honduras empowerment, implications for hasdirect asit oftheir in thehouseholdisakeycomponent decisions. Women’s decision-makingpower the needs of womenworkers in business both receivehigherwages andbetterexpress women needtoaccessmanagerialpositions to genderandtrade issues. Intheprivate sector, policies, programmes andinstrumentsrelated 6 Nicaragua 6 ,7 7 ,5 8 Panama 8 ,9 1 0 1 0 ,1 1 LAC 1 ,0 1 2 Trade and Gender Linkages: An Analysis of Central America 4d women’s control of household resources and General Assembly, is often referred to as an their employment outside the household. international bill of rights for women. Costa Rica, Guatemala, Honduras, Nicaragua and Panama module Costa Rica and Nicaragua have a high level of ratified the CEDAW without reservations.21 El women’s participation in national parliaments Salvador and Guatemala, however, declared that (46 and 45 per cent, respectively, in 2019), well they did not consider themselves bound by article above the rest of the countries studied and the 29, paragraph 1, which involves arbitration.22 El 20 LAC average (figure 12). Nicaragua (56 per cent) Salvador also signed, while Costa Rica, Guatemala and Costa Rica (52 per cent) had the highest and Panama ratified the Optional Protocol to shares of women in ministerial-level positions in 23 CEDAW. Besides the CEDAW, all six countries 2018 among the six countries. In the private sector, are parties to the Inter-American Convention on the share of firms with female participation in the Prevention, Punishment, and Eradication of ownership is higher than the share of firms with Violence against Women or the Convention of a female top manager, implying that women’s Belem do Para (1994), Convention on the Rights participation in top management is still behind of the Child (1989), International Covenant on that of their ownership in firms in all countries. Civil and Political Rights (1966), and International Covenant on Economic, Social and Cultural Rights 2.3. Security domain (1966). Gender-based and domestic violence inhibits At the regional level, the SICA, which forms the women from being economically active, from basis for Central American regional integration, retaining their own income, from receiving did not have any reference to gender, women or a share of their spouse’s income, and from in broad terms to vulnerable groups. However, the asserting their rights to travel, access education Council of Ministers of Women’s Affairs of Central and training, and engage in their own work. America and the Dominican Republic (COMMCA) Between 7 to 11 per cent of women were subjected was established as the political body of SICA on to physical and/or sexual violence in the previous gender and women’s human rights in June 2005. 12 months in the selected countries (figure 13). COMMCA aims to transform the status, situation Besides the influence of societal gender norms and position of women in Central America and and traditions, the legal framework on gender to adopt a sustainable gender equity policy and equality matters for reducing gender-based violence, as discussed in section 3. strategy. The Declaration of Panama “On Gender, Integration, and Development,” which was adopted in June 2010, is a significant milestone 3. Gender-related inputs: The legal in efforts to institutionalize a gender perspective and institutional frameworks for in the integration process (COMMCA, 2018). gender equality The SICA member countries approved the Gender-related inputs refer to the legal and Regional Policy on Equity and Gender Equality institutional frameworks on gender equality and of the Central American Integration System women’s empowerment. These frameworks differ (PRIEG/SICA) in December 2013. It was then in each country. They form the underlying legal updated in February 2018. PRIEG/SICA is a and institutional gender setting for the observed binding instrument that is recognized as gender-related outputs in different domains SICA’s gender agenda and aims to mainstream of economic and social life, such as capabilities, gender in all regional sectoral policies. The access to resources and opportunities, and policy framework under PRIEG/SICA develops security. The legal and institutional framework specific measures to respond to objectives in on gender equality at the international, regional seven areas: financial autonomy, education, and national levels has direct implications risk management, health, security, political for transforming gendered structures of the participation and implementation conditions economy and eliminating gender inequalities. (COMMCA, 2018). It is therefore necessary to evaluate the gender Overall, from 2005 onward the Central American policy framework of a country or a region while countries as a regional group have taken carrying out a gender analysis of its trade policy. important steps towards gender mainstreaming 3.1. International and regional policy in policymaking. Participation of different instruments stakeholders was also supported in the process. However, what is even more critical is to have The Convention on the Elimination of All Forms both the financial means and the political will of Discrimination against Women (CEDAW), to implement the commitments, as discussed which was adopted in 1979 by the United Nations further in section 3.2.

17 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 18 Costa Rica Note: Ascorethe measure. of100shows genderequality full ineachdimensionof WBL: Women,the Law index. Businessand Source: World Bank, Women,the Law 2020paneldata(accessedon20February Businessand 2020). Panama Nicaragua Honduras Guatemala SalvadorEl are not allowedtoworkinjobsdeemedhazardous,are not Rica, Guatemala, Honduras andPanama, women equal remuneration forworkofequalvalue. InCosta none ofthesixcountrieshasalawmandating employment. In termsofgenderequalityinpay, gender discriminationandsexualharassment in of any the legalprotectionsandcriminalpenaltieson provide not does Guatemala Specifically, Guatemaladosoforworkplacerights. and allbut protections for gender equality in terms of mobility, All sixcountriescoveredinthisstudyprovidelegal score. equality gender summary the in differences reveals theunderlyingfactors behindthese Looking intoeachdimensionofgenderequality among thecountriesunderreview. relatively well. Guatemalascoresthelowest Costa Rica, Panama andHonduras alsoperform Nicaragua ongenderequality. scorethehighest covered inthemeasure. Overall, ElSalvador and dimensions full genderequalityacrosstheeight gender equality. A index valueWBL of 100 shows of dimensions different on scores the on based indexprovidesasummarymeasure the Law(WBL) country-specific issues. going into details about 2020 database without World Bank’s Women, Business and the Law violence. This sectionmainlydraws fromthe and opportunities) gender-based andagainst economic life(i.e. education, accesstoresources to women’s participation in equality with respect Multiple legalprotectionspromotegender 3.2. World Bank(2020). different dimensions of genderequality calculated bythe on scores summary presents 5 Table Table 5

the national level Legal framework ongender equality at

2009 2009 2009 2009 2009 2009 2020 2020 2020 2020 2020 2020 WBL index WBL 69.4 80.0 80.0 88.8 79.4 70.6 70.6 86.3 75.0 83.8 73.8 72.5 25 The Women, Businessand 24 Mobility Scores ondifferent dimensionsofgender equality 100 100 100 100 100 100 100 100 100 100 75 75 Workplace 100 100 100 100 100 100 100 100 100 25 25 75 Pay 50 50 50 50 50 50 25 25 75 75 75 75 Marriage most of these rights with a few exceptions.most marriage, andtheremainingofcountriesprovide Nicaragua providealloftheequalrightsrelated to hoursasmen. work thesamenight CostaRicaand as men, allowedto andinCostaRicatheyarenot arduous ormorally inappropriateinthesameway advancement, whileGuatemalaandHonduras allocation in termsofshare of GDPfor women’s Costa Ricahasbyfar budget thehighest governments’ commitments. Forexample, inCentral America, and soundness fiscal to related to be made on gender equality is closely imply successinothers. Moreover, theprogress of spheres life, necessarily progress in one area does not all affects that issue cross-cutting a holistic perspective. gender is a Given that on genderequalityneedstobeassessedfrom the legal frameworkgender equality show that of dimensions different the in discrepancies The plansorpolicies(COMMCA,development 2018). include equalityofopportunitiesforwomenintheir policyframework,development allsixcountries to ensureequalityinpensionrights. Intermsoftheir pensioncarecreditsforperiodsofchildcare explicit and Nicaragua establish needtointroducelawsthat discrimination bycreditors. Guatemala, Honduras, gender-based prohibits introduce legislationthat Costa Rica, Guatemala, andPanama should related toentrepreneurshipandassets. However, toprovidingwomenwithequalrights with respect Central Americancountriesperformwelloverall 14weekstowomen. least maternity leaveofat Guatemala, andNicaragua evenprovidepaid donot equal rightsonparenthood. Forexample, Honduras, and Nicaragua, need to take bold steps to provide countries, and in particular Honduras, Costa Rica 100 100 100 60 60 80 80 80 80 80 80 80 Parenthood 60 60 60 80 80 40 40 40 40 20 20 20 Entrepreneurship 100 100 100 100 100 75 75 75 75 75 75 75 Assets 100 100 100 100 100 100 100 100 100 100 100 100 26 Pension All six All six 100 100 50 50 50 50 75 75 75 75 75 75 Trade and Gender Linkages: An Analysis of Central America 4d

Table 6 Budget allocations for national mechanisms for the advancement of women, 2017

Budget Per cent share module National mechanism (United States dollars) of GDP Costa Rica - National Institute of Women (INAMU) 35,000,000 0.060

El Salvador - Salvadoran Institute for the Development of Women (ISDEMU) 5,143,445 0.021

Guatemala - Presidential Secretariat for Women (SEPREM) 3,300,000 0.004

Honduras - National Women’s Institute (INAM) 957,050 0.004

Nicaragua - Ministry of Women (MINIM) 992,486 0.007

Panama - National Institute of Women (INAMU) 6,144,400 0.010

Source: COMMCA (2018). The GDP share is calculated by the UNCTAD secretariat using GDP data from the World Bank’s World Development Indicators database. have the lowest (table 6). This discrepancy partly to comply, do not require the harmonization reflects the level of economic development but of legislation on gender equality between the is also related to governments’ willingness to parties, and are not subject to dispute settlement make such allocations. For example, El Salvador mechanisms, significantly undermining their has the second-highest budget allocation as a efficacy. In a recent development, the Canada- share of GDP for gender equality even though it Israel Free Trade Amending Protocol was signed has the third-lowest GDP per capita among the on 28 May 2018 to replace the 1997 Canada-Israel six countries, as was seen in figure 1. FTA, incorporating a gender chapter with features similar to the first examples, and making the gender chapter subject to dispute settlement 4. A gender analysis of trade policy mechanism. This development may initiate a and trade flows in Central America move in this direction for the new FTAs to follow.

This section discusses the gender implications of There are important examples of gender trade policy and trade flows in Central America by mainstreaming in trade policy in the trade presenting case studies from each broad sector partnerships of Central American countries with of the economy (i.e. agriculture, manufacturing, other parties. A good example is the European services) and through a macroeconomic empirical Union–Central America Association agreement analysis. The section first briefly summarizes signed in 2012, which has many gender-related gender mainstreaming efforts in trade policy cooperation provisions, some of which are in and provides an overview of trade structure in a dedicated article on gender in the chapters terms of products and trading partners of the six on social cooperation, social development and countries covered in this module. social cohesion. The agreement is one of the few regional trade agreements that specifically 4.1. Gender mainstreaming in trade policy refers to the CEDAW and specifies that all gender- related cooperation activities should be carried One way of making trade policy more gender- out in view of effectively implementing the sensitive is to explicitly introduce gender CEDAW. considerations into the text of trade measures, including trade agreements. Gender issues The DR-CAFTA, signed in August 2004, refers to have been incorporated into trade agreements gender issues in its annex on labour cooperation through specific trade and gender chapters and capacity-building mechanisms. It has led since 2016. This shift in approach increases to various development cooperation projects the visibility of gender issues and their scope to increase the capacity of domestic labour in trade agreements. Both the Chile-Uruguay institutions and raise awareness on labour issues Free Trade Agreement (FTA), signed in October and workers’ rights (Bensalem, 2017). A dispute 2016, and the Canada-Chile FTA, signed in June settlement mechanism has been used to enforce 2017 to amend the pre-existing agreement, are labour provisions in the DR-CAFTA. examples of the “last generation” agreements that incorporate gender issues more directly It also provides insights to examine trade policy (UNCTAD, 2017a). frameworks at the national level from a gender perspective. The WTO’s Trade Policy Review Nevertheless, these first examples of gender Mechanism (TPRM) provides an important chapters in FTAs have had some important source in this regard to evaluate the national shortcomings. For example, they do not set specific trade policies of Central American countries from gender-related goals or standards with which a gender perspective.27 Among the countries

19 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 20 medium-technology manufactures are that processed commodities, and (2) low- and (1) agriculturalexport commodities and some Note: LAC:the Caribbean. and LatinAmerica Source: UNCTADthe UNCTADStat calculations basedon secretariat database (accessedon25June 2020). reviewed, 20) classification. (2000) of technologicalsophisticationfollowingLall’s terms in defined are groups Product partners. groupsandtrading toproduct with respect structure inCentral Americancountries This sectionpresentsanoverviewoftrade 4.2. in CostaRicaandElSalvador 3). (box targeted programmes for women exporters, as trade policy review documents. There are also mentionofgenderorwomenintheir an explicit reviews. have of the countries did not The rest agro-food sectorintheirrespectivetrade policy ofthe gender isconsideredonlyinthecontext trade policy review. InGuatemala and Honduras, directly introducedgenderconsiderations inits women that have export potential(Frohmann, haveexport women that 2017). assistance forbusinessplansandfinancialissues, amongotherservices. Theyalsohelpidentifycompaniesledby National CommissionforMicroandSmallEnterprises. The centresoffertraining, information, market andtechnical strategies.related support Women EntrepreneurshipCentreshavealsobeendevelopedbyCONAMYPE, ElSalvador’s ofbothbusinessandgender- firmsbysupportingthedevelopment with thegoalofpromotingwomen-ledexport ( of emphasisinPROCOMER’s 2019strategy (WTO, 2019). Similarly, inElSalvador, theforeigntrade promotionagency domestic market. In2018, 30womenentrepreneursparticipatedinthe programme. Genderequalitybecameanarea date sanitary registers, labelling andpackingrequirements, andaminimumparticipationoftwoyearsinthe facilitate theirinternationalization process. suchasproductivecapacity,There arecertaincriteriatobemet up-to- an initiative called in2017.Women Export This initiativeprovidestoolsand services for female entrepreneurs to Costa Rica’sforeigntrade promotion agency ( Box 3 Figure 14 100 Organismo Promotor de Exportaciones e Inversiones de El Salvador El de Inversiones e Exportaciones de Promotor Organismo 60 90 80 40 20 50 30 70 10

0 Trade structure Merchandise exports by groups,Merchandise product exports 1998–2000and2016–2018averages (percentage shares) 28 Costa Rica is the only one that CostaRicaistheonlyonethat Costa Rica Foreigntrade promotion agencies inCosta Rica(PROCOMER) Salvador andEl (PROESA) Primary 1998-2000

2016-2018 29 These countriesmainly El Salvador Resource-based 1998-2000

2016-2018 Guatemala 1998-2000 Promotora del Comercio Exterior de Costa Rica Costa de Exterior Comercio del Promotora Low-tech 2016-2018 Honduras

1998-2000 the shareofmedium-technologymanufactures in2016–2018, to9 percent while in1998–2000 cent high-technology manufactures fellfrom31 per decades. Forexample, inCostaRica, theshareof Central two Americancountriesoverthelast structureofsomethe merchandise export There havebeensubstantialchangesinthe ofthecountries(figure14). intherest cent exports inElSalvador andbetween 34and45 per exports correspondtotwo-thirdsofmerchandise and Nicaragua. Low- andmedium-technology exports inCostaRica, Guatemala, Honduras constituted aroundhalformoreofmerchandise categories intermsofvalue-added content, resource-based manufactures, thetwolowest period,In the2016–2018 primaryproductsand medical devices). (e.g.in femaleemployment textiles, apparel, countries, some of which are highly intensive processing zones in severalproduced in export Medium-tech 2016-2018 -PROESA), in2015 established aGenderUnit Nicaragua 1998-2000

2016-2018 High-tech

Panama 1998-2000 -PROCOMER) developed

2016-2018 Unclassified

1998-2000 LAC

2016-2018 Trade and Gender Linkages: An Analysis of Central America 4d

Figure 15 Merchandise imports by product groups, 1998–2000 and 2016–2018 averages (percentage shares) module 100 90 80 70 60 50 40 30 20 10 0 1998-2000 2016-2018 1998-2000 2016-2018 1998-2000 2016-2018 1998-2000 2016-2018 1998-2000 2016-2018 1998-2000 2016-2018 1998-2000 2016-2018

Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC

Primary Resource-based Low-tech Medium-tech High-tech Unclassified Source: UNCTAD secretariat calculations based on the UNCTADStat database (accessed on 25 June 2020). Note: LAC: Latin America and the Caribbean. increased. This mainly reflects the influence of Merchandise imports show a more balanced Intel’s withdrawing from electronic chip production distribution among different product groups. from Costa Rica in 2016 while continuing with only Resource-based manufactures, medium- research services. Nicaragua, Panama and to some technology manufactures, and low-technology extent El Salvador and Guatemala had significant manufactures are the main groups of declines in their shares of primary products in total merchandise imports in the Central America merchandise exports over time (figure 14). region. Composition of merchandise imports was

Table 7 Geographic composition of merchandise exports and imports, 1998–2000 and 2016–2018 averages (percentage shares)

Merchandise Exports

Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC 1998– 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 Developing 3.4 7.5 1.2 4.3 3.5 6.1 2.2 2.6 0.6 4.0 9.0 7.9 4.7 19.9 Asia European 24.2 22.3 10.4 3.7 10.4 9.4 10.8 19.3 19.4 7.9 18.7 8.2 12.8 10.7 Union Northern 50.7 38.7 51.5 45.5 52.3 38.9 70.4 51.3 51.0 59.3 21.2 14.6 58.1 46.0 America LAC 17.5 26.9 34.4 45.7 28.7 40.7 11.6 24.7 24.5 26.3 41.7 57.0 18.4 16.2

Other 4.1 4.6 2.5 0.8 5.1 4.9 4.9 2.1 4.5 2.5 9.5 12.3 6.0 7.2

Merchandise Imports

Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC 1998– 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 1998- 2016- 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 2000 2018 Developing 9.6 21.1 5.9 18.3 4.0 18.5 7.1 15.3 7.2 19.5 26.8 42.0 8.4 29.2 Asia European 11.2 9.6 10.8 7.0 8.7 7.3 5.6 5.7 6.2 4.9 9.8 8.1 16.0 13.6 Union Northern 47.7 42.0 41.4 35.0 43.4 39.2 57.2 42.8 28.2 24.8 14.8 18.9 49.7 34.0 America LAC 24.2 22.7 36.2 37.0 37.1 32.3 25.1 33.9 50.8 47.8 10.7 16.8 16.8 16.0

Other 7.3 4.6 5.7 2.7 6.9 2.6 5.0 2.3 7.5 3.0 38.0 14.2 9.0 7.1

Source: UNCTAD secretariat calculations based on the UNCTADStat database (accessed on 25 June 2020). Note: LAC: Latin America and the Caribbean.

21 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 22 the developingAsiaregion. ofmerchandise importscomefrom 42 per cent (table 7). The onlyexception isPanama, where merchandise imports enteringCentral America tradingalso important partnersintermsof The North America andLAC regions are replaced mainlybyexportstoLAC. twodecades.Costa Ricaoverthelast hasbeen It pronouncedly inHonduras, Guatemalaand in allcountriesexcept Nicaragua, andmore America inmerchandise exports, however, fell Costa Rica and Honduras. The share of North from exports merchandise of one-fifth around Guatemala. The EuropeanUnionaccountsfor and inparticularforPanama, ElSalvador and for Central market Americaalso a major export of Central Americancountries(table 7). LAC is share dominant the North Americainmerchandise exportsof in reflected is This destination forallcountriesexcept Panama. Annex 1, theUnitedStatesisamajorexport to markets nearby. As shown in table A.1.2 in Central Americancountriesmainlyexport twodecades(figure15).over thelast relatively stable inallcountriesexcept Panama Note: LAC:the Caribbean. and LatinAmerica Source: UNCTADthe UNCTADStat calculations basedon secretariat database (accessedon25June2020). in globalmarkets. Annex for allthecountries, asshownintable A.1.2in originmarkets among thetopthreeimport imports forothercountries. Indeed, Chinaranks zone. Developing Asia ranks as the third origin of trade throughthePanama carriedout Canal Figure 16 100 60 90 80 40 20 50 30 70 10 0 1, reflecting China’s increasing dominance Services exports by services category, by services exports Services 2005–2007and2016–2018averages (percentage shares) Costa Rica

Goods-relatedservices 2005-2007

2016-2018 El Salvador

2005-2007 30 Ti lkl reflects likely This 2016-2018 Guatemala

2005-2007

Transport 2016-2018 Honduras effects. For example, based on a general on based macroeconomic model(Bussoloequilibrium example, For effects. toconsiderthegeneralimportant equilibrium sectors oftheeconomyaswell. istherefore It liberalization in onesectorcanextendtoother economic integration. The implicationsoftrade of impact gender the influence also agreement liberalization, theconditionsofagiventrade ofeconomicchangesdrivenby tradeimpact structure ofeconomicactivity. Besidesthe workers, as wage changes inrelativepricesandthesectoral roles producers, traders, different andconsumersthrough women their affects liberalization in trade how on Module 2presentedadetaileddiscussion 4.3. categorywithinservices.export services haveovertakentourismasthemain multinational companies. Overtime, other shared services centres of several major in theregion. The countryhostsregional of businessprocessoutsourcing services in LAC, exporters beingamong thelargest sharesofotherservicesinexportsthe highest influence ofthePanama Canal. CostaRicahas pertain totransport services, reflectingthe Panama, aroundhalfoftotalservicesexports Nicaragua, andCostaRica(figure 16). In of total services exports in Guatemala,cent Travel formorethan40 per servicesaccount Rica andPanama, asdiscussedinsection1.2. share oftotalexports, especially in Costa forasignificantServices exportsaccount 2005-2007

liberalization: casestudies Selected Gender implicationstrade of 2016-2018 Travel Nicaragua 2005-2007

2016-2018 Otherservices Panama 2005-2007

2016-2018

LAC 2005-2007

2016-2018 Trade and Gender Linkages: An Analysis of Central America 4d and Niimi, 2009), in Nicaragua, DR-CAFTA was economies throughout Central America, coffee expected to have a poverty-reducing effect continues to be a major source of jobs and that is not large but more significant for urban income for the foreseeable future. For example, module households than rural ones. Guatemala and Honduras export more than 3 million and 7 million 60 kg bags per year, The subsections below present a discussion of respectively, and more than 245,000 families rely the gender implications of trade liberalization on income from coffee production in the two in Central American countries based on specific countries (Global Affairs Canada, 2018). case studies selected from each broad sector. Unroasted coffee is among the top three export Characteristics of the coffee value chain and the products in Guatemala, Honduras and Nicaragua, role of women as shown in table A.1.1 in Annex 1, so it is selected for agriculture due to its significant gender Coffee is typically considered as a “male” crop implications. Maquilas play an important role in in Latin America with an assumed marginal involvement of women; hence women’s Central American countries as a driver of exports, actual labour put into coffee production often and therefore the maquila sector is investigated goes unnoticed. In fact, a study of fair trade as a case study for industry. As shown in table cooperatives in Mexico and Guatemala found A.1.1 in Annex 1, apparel products rank among that women perform up to twice as much coffee the top three export products in El Salvador and labour as men due to the labour-intensive nature Nicaragua. Electronic products such as ignition of their tasks, especially in the presence of low wiring sets used in the automotive sector or levels of capitalization (Lyon et al., 2010). medical products rank among the top export products in Costa Rica, El Salvador, Honduras and The coffee sector is characterized by sharp gender Nicaragua. This seems to reflect the changing inequalities in different aspects of production. nature of exports in export processing zones Indeed, existing gender inequalities in income, in the region. Finally, tourism is an important access to land and other assets, access to finance, source of foreign exchange earnings in services, inputs, training opportunities, and market and is selected as a case study in services due to information all lead to a significant disparity its significant gender implications in terms of between male and female coffee producers in labour market outcomes and entrepreneurship. developing countries. In particular, land ownership and tenure security have important gender 4.3.1. Agriculture: The case of coffee producers implications for coffee production given their critical role in women’s ability to obtain credit, The distinction between export cash crops join producer organizations, access technical and subsistence-oriented staple food crops is training and productive resources, and exercise important in the analysis of the gender and trade bargaining power in the household (Fisher, 2019). nexus in agriculture. As discussed in Module 2, It is therefore important to evaluate the gender in subsistence-based agriculture, the influx of implications of coffee production and trade in the cheap food imports reduces the domestic price Central American context. of subsistence-oriented crops and erodes the already low earnings of subsistence farmers, a The coffee value chain consists of a long group often dominated by women. Hence trade season of fieldwork, followed by harvest, cherry liberalization is likely to negatively affect those processing, transporting, marketing and sales. farmers in subsistence agriculture. For market- The division of labour is highly segregated oriented cash crops, however, trade liberalization by gender. Women tend to play major roles can provide women with expanded export in the initial segments of the value chain markets and opportunities to integrate into – i.e. labouring in the field, harvesting and global supply chains as producers. In their roles as processing – while men concentrate more on wage workers, women are significantly involved the higher end of transportation, marketing in processing or packing facilities in agricultural and sale. Additionally, female farmers bear the value chains. However, these positions tend to be double burden of combining farm work with temporary and low paying. unpaid care and housework responsibilities (SCAA, 2015). Their contribution via production “Feminization of agriculture” has become more activities often goes unrecognized because it is common as women are increasingly involved in not directly associated with sales, and because cash crop production due to the out-migration of the non-remunerated nature of their work of men (Deere, 2005). Coffee is one of the main on their husband’s or father’s farm (CIAT, 2017). export cash crops in Central America and is a sector highly embedded in global value chains. Contrary to popular belief, most coffee producers Despite governments’ efforts to diversify local in Central America are smallholders. For

23 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 24 and certification schemes certification and cent inCostaRica(table 8).cent Honduras inElSalvador to33 percent and34 per in inGuatemalaand19 percent to 22 percent of total coffee producers ranges from between 19 countries coveredbythestudy, thefemaleshare findings show that, among the Central American initial The countries. coffee-producing major in the number of women working to produce coffee has recently attempted to provide an estimate of (IWCA) Alliance Coffee Women’s The scarce. International quite are chain value coffee the in Data onwomen’srolesandgenderrelations capacity. adversely inturn affects their productivity and income-generation This 2018). Canada, Affairs experimenting withnewtechniques(Global tochanging in new technology or take risks interms of vulnerable conditions, and they lack the means to invest and inefficient Smallholders production. are coffee total of cent 125,000 total coffee farmers but produced 60 ofthe smallholders correspondedto80 percent InGuatemala, in Honduras. production coffee oftotal producers accountedfor86 percent example, in 2017, small- and medium-sized be beyondtheirreach, especiallyfor women assistance andcapacity-building may that equipment, marketingchannels, technical and womenfarmers witheasieraccesstocapital both men provide They chain. value coffee the roleinsupportingupgradingan important in Producer organizations andcooperatives play cooperatives organizations, producer of role The Productores. the InstitutoHondureño delCafé (ICAFE) Registro Nacional de Salvador; for Guatemala from Anacafe; andfor Honduras from de Costa Rica (ICAFE); for Salvador El the Consejo from in El Note: Source: Church (2018). International International Women’s Coffee estimates for Alliance Guatemala SalvadorEl Costa Rica Burundi Honduras Rwanda Colombia Table 8 Estimates for Costa Ricaarethe Instituto del Cafe from the numberoffemale coffee producers number of Estimated producers 4,000 to 4,000 164,000 female 117,990 113,846 15,450 17,978 6,700 7,000 as per cent producers Females of total 19-22 20 30 34 32 33 19

2006–2007 2016–2017 estimate Year of 2016 2015 2015 2013 2013 per upgrade in the coffee value chain (Verhart and (Verhart chain value coffee the in upgrade in inequalities gender returns, bargaining power and potential to significant are there responsibilities and of menandwomeninfamily farm production, roles different the Given 2010). even when their spouses have migrated costs al., (Lyon et organizational significant despite This iswhywomenretaintheirmembership especially iftheyareregisteredasfarm operators. higher income via higher union coffee prices – all property rights, andsupports their access to tocoffee organizations and skilled jobs, bolsters their access their improves coffee organic example, women’sparticipation inFair Trade on theliterature review. InGuatemala, for based America in Central of schemes impact certification the on findings key the of overview resources inorganizations. Table 9presents an producer through increasedincomesandaccessto of women’sempowerment, also support mainly effects may schemes positive certification organizations, the Besides al.,health services(Terstappenet 2013). women’s access to programmes support that through health women’s empowerment 2017). Fair trade organizations alsopromote for women, as documented for Costa Rica (Stein, effective for creating pathways to empowerment smaller-scale, women-onlysettingsmaybemore facilitate women’sempowerment. Forexample, (i.e. women-onlyversusmixed-gender)canhelp organizations intermsofscaleandstructure producer of types Certain 2018). Canada, Affairs ofsuchorganizations (Global America arepart ofsmallholderfarmers per cent inCentral20-25 only knowledge, technical and markets, finance, in easingtheaccessofsmallholderfarmers to Despite theprovenroleoffarmer organizations 2018; Chan, 2010; World Bank, al., et 2009). in production and gain land titles (Café Femenino, helping womendeveloptheirtechnicalcapacity under aseparate label called“LasHermanas,” areas. coffee-growing SOPPEXCCA in Nicaragua markets women’s coffee in conditions living and ownership, decision-makingpower, family income onwomenfarmers’has hadapositiveimpact land coffee farmers includinginGuatemalaandNicaragua, women of cooperatives 10 includes that brand coffee women-owned a Fermenino, Café Rica (Dragusanu andNunn, 2018). Fair Trade inNicaragua (Dilley, 2011)andinCosta accessible outlets for their coffee, as in the case of and easy and security, financial revenues, more They alsoprovideproducerswithhigherprices, farmers duetocultural barriers(CIAT, 2017). Trade and Gender Linkages: An Analysis of Central America 4d

Table 9 completion of paperwork, attending meetings, The effects of certification schemes in the coffee sector and understanding the payment system as Effect Country – Study difficulties they encountered (Dilley, 2011). module Financial security, easier Nicaragua – Dilley (2011) access to land and markets Additionally, a number of factors limit the capacity Higher price, more sales and Costa Rica – Dragusanu of certifications to create pathways to women’s revenues and Nunn (2018) empowerment when they manage to access Benefits mainly to skilled them. For example, fewer benefits reach women coffee growers who are not registered farm operators and may Women’s increased access to Guatemala – Verhart and knowledge and management Pyburn (2010) instead bear the burden of increased work on Women’s greater sense of crops under their husbands’ control. Women’s dignity low education, or high childcare demands that Smaller-scale and women- Costa Rica – Stein (2017) can preclude their participation in meetings, can only producer organizations more effective for women’s also exclude them from participation altogether empowerment (Smith, 2013). In addition to women’s double work Women’s increased access to Guatemala – Lyon et al. burden, the dominantly male control of income coffee organizations, skilled (2010) from certificated produce also limits the benefits jobs and higher incomes for women from certification schemes such as Source: UNCTAD secretariat compilation based on the review Fair Trade (Lyon, 2007). Cultural barriers also of literature. make it harder for female members to benefit, especially in well-established cooperatives. Low Pyburn, 2010). It is therefore important to take consumer demand for certified coffee is another into account these different roles to support inhibiting factor. the upgrading of women coffee producers. Café de Mujer, a woman-only coffee certificate and Despite their benefits, certification schemes label developed in 2006 by two Guatemalan alone may not bring about significant poverty organizations (MayaCert and Acodihue), is a alleviation, as documented for small-scale coffee good example in this regard.31 It aims to make farmer households in Central America and the work of female coffee producers visible Mexico (Mendez et al., 2010). Moreover, if the and value their contribution by applying benefits accrue mainly to those already in a good gender-sensitive indicators (Verhart and position, the overall goal of supporting those at Pyburn, 2010).32 Compliance with Café de Mujer the very bottom of the value chain may not be standards by member organizations helped fully achieved. For example, in Costa Rica, Fair promote gender equality in the coffee value Trade benefited mainly skilled coffee growers chain through women’s increased access while hurting intermediaries and providing no to new knowledge, capacity-building and improvement for unskilled workers (Dragusanu technical aspects of production. Women also and Nunn, 2018). Moreover, women are dominant increased their representation in governing in domestic informal markets and do not always bodies, gained responsibility for managing benefit from interventions that aim to upgrade the (organic) production process, and, above producers in the global value chain. all, had an increased sense of dignity and pride. Extension services were re-designed to Finally, despite their shortcomings, certification become more gender-sensitive (e.g. schedules schemes, especially Fair Trade, can serve as that take into account women’s reproductive networks that leverage global development work, introduction of mobile childcare services) funding for small-scale, coffee-producing (Verhart and Pyburn, 2010). households. These networks should be supported through cooperation among farmers, Despite their proven benefits, farmers’ access cooperatives, certification and environmental and to certification schemes are constrained by rural development organizations, and researchers certain barriers. For example, in El Salvador, in coffee-producing regions (Mendez et al., 2010). certification costs, economies of scale to cover coffee export operations, stringent quality 4.3.2. Industry: The case of maquila workers requirements and altitude constraints all play a role in limiting farmers’ access to Fair Trade The manufacturing sector has played a key role in certification. However, deeper causes such as the process of export-oriented growth strategies lack of education and unequal access to land in many developing countries, especially in Asia and debt forgiveness also contribute to this and Latin America. Export processing zones (EPZs), outcome (Tellman, et al. 2011). In SOPPEXCCA, or “maquilas” in the Central American context, a coffee cooperative in Nicaragua, women, have become engines of employment growth who constitute a third of total members, cited in this process. EPZs or maquilas are generally

25 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 26 exemptions, andinfrastructure incentives. foreign investment: taxexemptions, regulation provide threemainsetsofincentivestoattract provided themwithgenerousincentives. EPZs including thoseinCentral America, have to befootloosecompanies, governments, As firmsinthemaquilasectorareconsidered for assemblyandre-export. based ontheimportationofintermediateinputs in low-income countriessuchasHonduras summarized inbox4. AlthoughEPZs, especially changes inthemaquilasectorovertime, as policyandeconomicthere havebeenimportant footwear manufacturing sub-sectors. However, to beintheapparelandgarment, textileand ofthemaquilasinCentralMost Americaused (UNCTAD, 2019a). of totalexportsinCostaRicaandNicaragua in LAC. SEZs alsoprovidemorethan50 percent Dominican Republic(73)amongthecountries numberofSEZs afterthe (39) havethehighest Nicaragua (52), CostaRica(49)andHonduras activity intheCentral Americaregion. Indeed, service zones, roleineconomic playanimportant such asEPZs, zones, technologydevelopment and zones integrated industrialdevelopment/free America Central in Special economiczones(SEZs), whichreferto maquilas of features Main (Gonzalez Diaz, 2016). have introducedtheirownfreezonelaws the DR-CAFTA developingcountrymembers introduced ineachcountry’sdomesticlaw. All according totheirownlegalframeworks (Cirera andLakshman, 2017). EPZs areregulated investmentthe ability toattract foreigndirect conditions, thetypesofsectorstargeted, and differ dependingonthedomesticeconomic The typesofincentivesintroducedinEPZs can Gereffi, 2011). Mexican andCentral (Frederickand shareintheUnitedStatesmarket American countriesandlossesofmarket Asia. Asaresult, downgrading increasedcompetitionfromAsiandeveloping countriesresultedinsignificant among economies of scale and scope in textile and apparel production and upgradingand significant achieved in developing inplaceAsia,the economicpoliciesput suchasinfrastructure inChina, andlabour forcedevelopment investment locked inassemblyproductionasopposed tomoreadvanced full-package production. This was furtherintensifiedby create alastingsourceofcompetitiveadvantage. This ismainlybecausetheylackedsupplierupgrading andwere Despite theirproximityandpreferentialaccesstotheUnitedStates market, LatinAmericancountriescouldnot apparel-exporting economies(FrederickandGereffi, closuresinmost plant 2011). crisis andtheresultingdeclineinglobaldemandmajordevelopedcountries alsoledtoproductionslowdownsand States, Canada andmanyEuropeancountriesfromtheearly1970s untiltheirphasing-out. The 2008globalfinancial Clothing. The MFA established quotasand preferentialtariffsonapparelandtextileitemsimportedbytheUnited Arrangement (MFA) bythe World Trade Organization on between1995and2005throughitsAgreement Textiles and oftheMulti-Fibre sectorintensifiedfollowingthephasingout International competitionintheapparelandgarment Box 4 Historical developments in the maquila sector developmentsHistorical the maquila in 33

suppliers, andexpatriatesarethemanagers and customers. Sincetheyformnolinkages withlocal clothes intheregionfortheirNorthAmerican Central American countries, assemble and that preferences granted bytheUnitedStatesto trade from benefit to so do that subcontractors in theapparelindustryareownedbyAsian For example, in Nicaragua,the region. ofthecompaniesinEPZs most in actors significant Ramirez,they can 2019). Moreover, Asiancompaniesare and volatile, open andcloseveryswiftly(ReyesQuintero highly firms maquila brands canvary that veryquickly. This makes subcontractors, andtheydealwithordersfrom ofthemaquilafactories as Most act (Gonzalez Diaz, 2016). call centresandbusinessprocessoutsourcing are ontherise, forexample intheformof More recently, maquilasintheservicesector centres and R&D operations (UNCTAD, 2019a). services suchassophisticatedsharedservice in EPZs towards medicaldevicesandadvanced Bank, 2016). InCostaRica, therehasbeenashift for higherskillsbytheserisingsectors(World becauseofthedemandfemale employment hasa negative repercussiondevelopment for decline ofthetextilesandapparelssector. This drivers in EPZsemerged as export following the andchemicalsplasticshaveequipment For example, newareassuchassurgical Central America(UNCTAD, 2019a). components haveincreasedtheirsharesin assembly, andassemblyofcomputerhardware metalworking, harnessandautomotiveparts competition fromAsianEPZs. Electronics, sectors duetopressurefromintense themselves towards higher-value-added of the EPZs in the region are restructuring sectors includingapparelandtextiles, many and Nicaragua, stillfocusonlabour-intensive Trade and Gender Linkages: An Analysis of Central America 4d technicians of these factories, their impact on of female participation in the labour market local industrial development is quite limited (van (Cirera and Lakshman, 2017).34 Women account Wunnik, 2011). for more than half of employment in major module labour-intensive manufacturing sub-sectors The countries in the region face a number of such as food and beverage, textile, and apparel in challenges in terms of EPZs. Competition from Central American countries, according to recent Asian economies is putting pressure on the economy-wide data (figure 17).35 EPZs in the region, especially as regards the United States market, which is a major export Up-to-date statistics on EPZ employment are not destination for all the countries covered in available, but there is evidence of feminization this study (see section 4.2). Their reliance on of labour in EPZs in Central America based on the United States as a major export market past statistics. In 2005–2006, women constituted makes them vulnerable to trade shocks. The 90 per cent of total employment in the zones sustainability of fiscal incentives provided in in Nicaragua, 85 per cent in El Salvador, 75 per EPZs is also a big issue due to the substantial cent in Honduras, and 70 per cent in Guatemala amount of potential tax revenues foregone, and Panama (Boyenge, 2007). The feminization especially for countries where EPZs have a major of labour is mainly observed in the apparel share of economic activity. Indeed, El Salvador manufacturing or production stage in Central and Guatemala – along with Argentina, Brazil, American maquilas, when the whole value chain Ecuador, Mexico, Paraguay, Peru, and Uruguay – is considered. Other stages in the value chain have all re-examined their free zone strategies in including the management of input, pressing, the last five years to make them more conducive packaging, shipping and transporting are carried to economic development. New regimes have out mainly by men (ECLAC, 2014). The main reason a focus on cluster specialization and internal behind this pattern is the competitive advantage markets among the goals for industrial parks that female workers provide firms under and development zones (UNCTAD, 2019a). increased international competition mainly thanks to women’s relatively lower wages and Women in maquila employment their perceived docility and submissiveness.36 This issue was discussed in Module 2 in the context of The apparel and garment sector has strong EPZs in developing countries in general. gender implications as it relies mainly on the influx of cheap labour to be competitive in Moreover, gender norms and stereotypes international markets. Women make up the segment workers into specific economic activities majority of workers in EPZs in most developing on the basis of sex. Women are considered to countries, and EPZs contribute to higher rates have nimble fingers deemed more suitable

Figure 17 Female share of employment in selected manufacturing sub-sectors (per cent share)

100

0 Costa Rica El Salvador Guatemala Honduras Nicaragua Panama

Food and beverage Textiles Apparel

Source: ILOStat database (accessed on 25 April 2020). Note: Data are for 2019 in Costa Rica, 2018 in El Salvador and Honduras, 2017 in Guatemala and 2014 in Nicaragua and Panama.

27 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 28 Source: UNCTADthe review compilation ofliterature. basedon secretariat shows that jobgrowththroughoutsourcing shows that industrial growth. The evidence, however, unionization indevelopingcountriesthrough toimprovedwageswould contribute and outsourcing andexport-oriented production was international apositiveexpectationthat ofmaquilas.in thecontext Initially, there hasbeendebated constitute anotherissuethat Workers’ labour rightsandbargainingpower and administrative functions(SOMO, 2011). mainly technical,while men carry out supervisory ofproductionworkers,make upto90 percent maquilasinCentralof garment America, women Salvador, numbers which has one of the highest also in Centralevident America. For example, in El The occupationalgendersegregationinEPZs is familysupplement income and escape poverty. in theabsence ofstrongwelfare states, to further push women into paid employment, among meninmanydevelopingcountries minimum wages andrisingunemployment the global markets (Tejani, 2011). The declining in volatility supply and fluctuations price resulting from ofproduction risks the absorb firms oriented industries. Overall, womenworkershelp fewer opportunitiesforadvancement inexport- into low-skilled andlow-paying positionswith technical work. This leadstotheirrecruitment for labour-intensive tasksandunsuitable for Table 10 Working Other Wages conditions employment foremployment women rateparticipation –areallocation from wageto self- effectNo significant thelabour of remittances on force rate,participation more sofor women A negative effectthe labour ofremittances force on processing zones organizing inexport to discouragethreats andblacklists useof The workers from manufacturing industries Poorerthan inother workingconditions inmaquilas andagriculture services Morethan indomestic formal inmaquilas jobopportunities and Honduras and Nicaragua; anadverse effect inGuatemala, Salvador, El the genderwageon gapinCosta Rica, DominicanRepublic, A favourabletradethe UnitedStates of opennesswith impact in maquilas A highgenderwage gaponlyamonghigher-skilled workers to femaleto malethan higher returns workers workers the substantiallyto A highgenderwage due gapinmaquilas the sector,than outside andasmall reduction poverty effect Higher wages andasmaller genderwage gapinmaquilas agriculture andcommerce Higher wages forthan for workers maquila workers in Higher wagesthe apparel sector in sectors A wagethe apparel relative premiumto other sector in Effect The effectsThe employment ofmaquila outcome. tothis industrial productionhavecontributed trade competition and the restructuring of al., 2010). Both“a race tothebottom” through unionization inthesecountries(Dominguezet often resultedinlowerwages anddeclining had lowerunionization rates andwages relative subcontractors) (i.e. firms segmented Salvador, mobility.plant Forexample, inHonduras andEl discourage of unionization throughthethreat induces subcontractors tokeepwages lowand weakens thebargainingpowerofworkersand This horizontaldispersionofproductionfacilities competing for a limited number of contracts). firms small numerous (i.e. way process outsourcing in this and manage tolowercoststhroughacompetitive firms rival independent to (outsource) partsoftheproductionprocess chain, multinational corporations subcontract globalsupply In theapparel and garment follows. discussed indetailwhat based ontheliterature review. These studiesare inCentralof wellbeing Americancountries wages, workingconditionsandotheraspects on ofmaquilaemployment on theimpact Tablefindings key the of overview an presents 10 on employment maquila of Implications wellbeing Honduras –Stanley(2015) (2011) Argüello SalvadorEl (2013), –Borja Robertson and Trigueros- SalvadorEl – Reyes andRamirez (2019) Guatemala –Calfat andRivas (2008) (2009) SalvadorEl – Robertson and Trigueros-Argüello al.et (2011) DR-CAFTA developing country members–Bussolo SalvadorEl – SOMO (2011) Guatemala –Calfat andRivas (2008) Honduras –DeHoyos al. et (2012) Guatemala –Calfat andRivas (2008) Honduras –Marcouiller andRobertson (2009) (2009) SalvadorEl –Robertson and Trigueros-Argüello Country –Study Trade and Gender Linkages: An Analysis of Central America 4d to traditional, integrated manufacturing firms wage raise introduced in early 2017, many even after controlling for firm size and workforce employers refused to implement the raise and demographics (Anner, 2011). threatened to close factories, which left wages module in the maquilas among the lowest in Central However, when compared to employment in America. Collective bargaining through unions agriculture and low-skilled services sectors, is almost non-existent in maquilas, and factory the maquila sector often provides workers owners commonly use threats and blacklists to with relatively better living standards in many discourage workers from organizing (Reyes and developing countries. Based on a review of the Ramirez, 2019). literature, Cirera and Lakshman (2017) report that EPZs tend to pay higher wages than The results are mixed with respect to other employers outside the zones in most cases. dimensions of labour conditions, including In Central America, it is documented that the health and safety, and working hours when apparel sector paid a wage premium relative comparing EPZ firms with firms outside. For to other sectors in both El Salvador (Robertson example, working hours are long in most EPZs and Trigueros-Argüello, 2009) and Honduras but the evidence is inconclusive when compared (Marcouiller and Robertson, 2009). There is with the working hours of workers outside EPZs similar evidence for Guatemala, where it (Cirera and Lakshman, 2017). was found that maquila workers were paid Moreover, a common form of gender-based higher wages than workers in the agriculture discrimination in maquilas is compulsory or commerce sectors (Calfat and Rivas, 2008). pregnancy testing, which prospective female In El Salvador, the wage differential and employees must undergo before getting a employment share in the apparel sector contract. Those who get pregnant after being decreased following the expiration of Multi- hired are often reassigned to more physically Fibre Arrangement in 2005. However, the demanding posts in order to force them to quit share of workers in the apparel sector with (SOMO, 2011). Sexual harassment in garment signed contracts or registered for social factories continues to be an important issue security remained above average, implying despite steps taken by the International that the sector still provided better conditions Labour Organization (ILO) to prevent it. compared to other sectors such as domestic According to a survey carried out in garment service and agriculture (Robertson and factories in Nicaragua, for example, 30 per Trigueros-Argüello, 2009). cent of workers said that sexual harassment Many women ranked their jobs in maquilas is a concern for workers in their factories; better than being a domestic worker. However, they either discussed it with co-workers or a they also reported experiencing adverse supervisor or manager, and even considered 37 working conditions and limited opportunities quitting (ILO, 2019). to take action in order to change these Overall, the findings on working conditions in conditions without the threat of losing their EPZs show that non-wage working conditions jobs. This is particularly the case when it can be quite adverse, negatively affecting the comes to workers’ right to organize. Based on overall wellbeing of workers, despite the higher a review of the literature, Cirera and Lakshman wages that maquila firms offer to workers, (2017) find a significant amount of evidence as documented for various Central American documenting restrictions on unionization in countries. EPZs, either by limiting the right to organize or by de facto constraints on these rights. The In terms of the gender wage gap, maquila firms situation is similar to firms outside the zone, were found to be less discriminatory than firms implying that restrictions on unionization in Honduras, as summarized in case study A.3.2 in rights may reflect general failures in domestic Annex 3. In contrast, in Guatemala, the maquila labour institutions rather than being endemic sector had a wide gender wage gap due to the to EPZs. substantially higher returns to male workers than to female workers (Calfat and Rivas, 2008). In the case of Central America, multinational This might be reflecting the relatively lower corporations in EPZs had a considerably bargaining power of female workers compared worse record than other sectors in terms of to male workers in this setting. In El Salvador, the violating labour rights in 2006 (Dominguez gender wage gap is almost non-existent among et al., 2010). In Guatemala, the maquila sector production workers, while it has been found to also exhibited poorer working conditions be significant among higher-skilled workers than other manufacturing industries (Calfat (SOMO, 2011). Hence the situation in terms of and Rivas, 2008). In El Salvador, despite the the gender wage gap in maquilas varies widely

29 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 30 per cent ofGDP andgenerated per cent 10.4 3.8 per cent level in2018, travel andtourismaccountedfor (UNWTOetc.) andILO, 2014). theglobal At construction facilities, handicraft producers, opportunities (e.g. restaurant suppliers, resorts, shopping outlets, andindirect etc.) hotels, restaurants, travel agencies, aircrafts, opportunities(e.g.tourism provides bothdirect opportunitiesformenand women,employment and Trigueros-Argüello,2011), force participationinElSalvador (Robertson onlabourremittances hadanegativeeffect For example, hasbeendocumentedthat it way trade inasociety. wellbeing mayimpact outcomesinfluencingthefor labour market However, remittancesalsohaveimplications poverty, especially in El Salvador and Honduras. roleinreducingRemittances playanimportant case studyA.3.2inAnnex3. reduction was quite limited, as summarized in associated withpovertyreduction, the but for Honduras maquilaexpansionwas that countries in developing where rural poverty is intense. There is evidence poverty fight to way isoftenconsideredasapotential employment developmental issuesaswell. Maquila There are implications of EPZs for broader the genderwage gapintheregion. liberalization underDR-CAFTA ledtoadeclinein tariff import and export of effect combined the As summarizedincasestudyA.3.1Annex3, changes. policy trade specific on depends also trade liberalization onthegenderwage gap across countriesintheregion. of The impact n tuim utpir effects. multiplier income, tourism and employment, of acountrythroughbothvisitorspending affects investment, and the balanceof payments Tourism 4.3.3. participating inthelabour force. family causesbehindnot balancearetheroot the lackofpublicservicestoeasework- women,for most theunpaidworkburdenand explain thelabour force participationdecision; alone remittances do not should note that Honduras) seemtobevalid (Stanley, 2015). One sector(e.g.the export maquilasinnorthern remittances withdraw the labour force from employment. Hence, concernsregardinghow intheprivateemployment sectortoward self- the mainrecipientsofremittancesfromwage However, theyledtoareallocationofwomen as onthelabour forceeffect participationrate. negative haveasignificant remittances didnot women (Borja, 2013). Incontrast, inHonduras,

and workers Services: The caseoftourismentrepreneurs 38 andmore so for 39 In terms of per cent in 2020,between 58and78 percent which arrivalsinternational tourist coulddecline Nations World Tourism Organization (UNWTO), including services, tourism-related ones. According totheUnited most affected negatively people’smobility.order tolimit These measures measures in around theworldtotakestrict The COVID-19 pandemicforced governments over time(UN Women, 2019). policies arebecomingmoregender-sensitive sales/marketing platforms. Moreover, tourism throughonlinetrainingthe tourismmarket and opportunities and helpingentrepreneursaccess close thesegendergapsbyincreasingtraining (UNWTO andUN Women, 2011). Technology helps women inthehotelandrestaurant sector and receive more education and training than more professionalandhigh-skilledpositions women thaninothersectors. However, menhold more ministerialpositions in tourismheld by employers in the hotel and restaurant sector and sectors. There areahighernumberofwomen and restaurant sectorissmallerthaninother workforce, andthegenderpaygap inthehotel Women constitutethemajority of the tourism situation ofwomeninthetourismsectorglobally. A number of stylized facts emerge regarding the agriculture, asinCostaRica(Ferguson, 2010b). women whencomparedtoalternativesin however, theymaybestillvalued moreby unstable nature of available tourism jobs, 2011). Despitethelow-paying, low-skilled and domestic economy (UNWTO and UN Women, sources ofincomesuchasagricultureinthe womenbyreplacingtheirtraditionaleven hurt development, may andinsuchinstancesit also prevent them from benefiting from tourism limited accesstoeducationandresources may domestic workburden. However, women’s access theseopportunitiesgiventheirunpaid easierforwomento work)makeit and shift part-time (e.g. work of hours and forms flexible to enterthemarket. Bothlowentrybarriersand and utilities, andrequireslittlestart-up capital ofinfrastructure,improvement transportation for localproductsandservices, supportsthe helps createinvestment, increasesdemand particularly indevelopingcountries. Tourism tour guiding, food products, and training, etc.) informal), entrepreneurship(e.g. handicrafts, formaland (both opportunities foremployment gender in theeconomy. Tourism provideswomenwith significant has implications intermsofwomen’sparticipation sector tourism The (WTTC, 2019). both directly and indirectly total employment of directlyand10 percent of totalemployment Trade and Gender Linkages: An Analysis of Central America 4d would translate into a loss of up to US$1 trillion Central America developed more slowly than in international tourism receipts (UNWTO, 2020). in the Caribbean. It began to develop robustly The World Travel & Tourism Council estimated in the late 1990s, with Costa Rica and Panama module that the pandemic put over 100 million jobs at risk starting earlier than the rest of the countries in worldwide (WTTC, 2020). Given the highly female- the region. There are also significant differences intensive nature of employment in tourism and in the tourism structures across countries. In women’s segregation in lower-skilled jobs, the general, tourism structures were first started by pandemic is likely to hit women workers and big business (first foreign, then domestic). Even entrepreneurs in tourism the hardest. so, local small and medium-size business and community initiatives play an important role Tourism sector in Central America in tourism development, especially in Central America (Cañada, 2010). In Central America, the tourism sector has played a significant role in the transformation process For example, in Costa Rica, which is one of from a traditional agro-export economy to a more the most established tourism destinations complex economic structure in which traditional in Central America, small and medium-sized and non-traditional agricultural exports, enterprises (SMEs) make up to 80 per cent of maquilas, tourism and remittances are dominant. the tourism sector. This small-scale nature of The falling commodity prices and the new political tourism does not necessarily mean low-value economy of trade under DR-CAFTA played a role in economic activities but rather covers a wide this transformation in which the importance of range of services from budget accommodation to services increased (Ferguson, 2010a). In particular, luxury “boutique” travel options. Such a tourism the rural agrarian sector producing for local and model is appealing to niche markets, including national markets faced intense competition from adventure tourism, cultural tourism, nature subsidized imports of agricultural goods. This in tourism and archaeological tourism (Ferguson, turn led to a shift of part of the rural workforce 2010b). Moreover, the significant role of SMEs to maquila, construction, food industries, and in tourism is in line with the poverty reduction tourism services (Cañada, 2010). goals in the region (Ferguson, 2010a). SMEs are the main way for people from low-income Tourism has been promoted as a new space households to enter a market as self-employed for development policy and has become a individuals or employers and are therefore significant component of donor support, instrumental in fighting poverty. Given the easier national development policies, and poverty access of women entrepreneurs to the economy reduction strategies in the region (Ferguson, via SMEs, such a tourism model is likely to better 2010b). However, partly because of the political accommodate the design of gender-sensitive instability and violence in the 1980s, tourism in policy interventions in the tourism sector.

Figure 18 Tourism receipts (in total exports) and expenditures (in total imports), 2018 (percentage share)

19,4 19,7 20 18,2

15 11,6 10,2 9,9 10 7,6 5,9 5,3 5,2 5,8 4,4 4,5 5 3,9

0 Costa Rica El Salvador Guatemala Honduras Nicaragua Panama LAC Tourism receipts (per cent of exports) Tourism expenditures (per cent of imports)

Source: World Bank, World Development Indicators database (accessed on 23 June 2020). Note: LAC: Latin America and the Caribbean.

31 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 32 tourism expansion has a positive effect on Amaghionyeodiwe, 2015). effect positive a overall al., economicgrowth(Gunteret 2018; has expansion tourism There isevidence for Central America that here, andtheyarewellabove theLAC average. exports in alltheCentral Americancountriesstudied of total share significant a constitute expenditures intheregion. Tourism receipts Figure 18 shows tourism receipts and food services sector is larger than in the broader gender wage gapintheaccommodationand 2008). Contrary togeneral globaltrends, the exploited bytourismbusinesses (Vandegrift, women inCostaRica, whoaremorelikely tobe immigrant women, asinthecaseofNicaraguan in low-skilled for positionsismoreevident (Cabezas, 2008). The segregation ofwomen sexualisation oflabour forbothmenandwomen 2010b). alsoleads tothe Tourism development or receptionists, asin Costa Rica (Ferguson, 2008; ECLAC, work as waitresses best 2014) or at mainly holdhousekeepingpositions (Cabezas, guides, diving instructors, etc., while women such as cooks, bartenders, servers, porters, access tobetterandhigher-paying positions even amongtourismserviceworkers. Menhave UN Women, 2011). There isgendersegregation service worker jobs in tourism (UNWTO and Women aremainlysegregatedintoclericaland and theUnitedStates(Cabezas, 2008). skilled labour suchaschefsfrom Western Europe and topmanagement the regionoften recruit (Ferguson, 2010b). Moreover, touristicresortsin of higherwages incomparisontoagriculture Nicaragua toCostaRica)duetheperception immigration fromnearbycountries(e.g. from migration fromneighbouringtownsand in tourism. The sectorattracts bothinternal are amongthecommonfeaturesofemployment working hours, subcontracting, andcasualwork working conditions, highturnoverrates, long or female, duringthehighseason. Unstable of temporary labour, predominantly youngand/ Tourism businessesrelyondrawing fromapool region, asdiscussedbelow. gender implications in the tourism has important structure,its highlyfemale-intensiveemployment and community, social and other services. Given Rica andPanama, following public administration Guatemala, shareinCosta andthesecondhighest sectors inElSalvador, Honduras, Nicaragua and amongall female shareoftotalemployment oftourism–havethehighest major component accommodation andfoodservicessectors–a America As presentedintable 2insection2.2.1, the Central in tourism in Women is because poverty is more severely felt bywomen,is becausepovertymoreseverely felt inequality via the poverty reduction channel. This the tourism that sector alsohasthepotential toreducegender imply findings These 2014). development, asinthecaseofNicaragua (Croes, especially insettingswithlow levelsofeconomic and 2015), al., et (Vanegas poverty fighting in role than agricultureintermsofaneconomicsector’s effect alleviation poverty stronger a has tourism evidence forCostaRicaandNicaragua that remote areasaswell. Indeed, different thereisempirical and poor many in those benefits and of suppliers service participation the involves tourism’s genderimplications. The tourismsector in termsofcountries’ goalsand development Tourism’s role in poverty reduction is also critical expanding theirincome-earningopportunities. can help both men and women in rural areas by (Perez andQuirozEstrada, 2017). Suchpolicies with rural rural tourismtosupport communities agricultural them activitiesand/orcomplement toupgrade isalsoimportant traditionalit tourism. Besidessuchtourism-focusedpolicies, rural tourismandrural community-based agenciestopromote agencies andgovernment non-governmental organizations, international initiatives bylocalorganizations, networksof ecotourism; inthelate1990s, introducedformal it activities directedtoward of thedevelopment supportednatureandadventure government several policytools. Inthe1980s, theCostaRican adventure tourismandrural tourism)through projects(ecotourism,sustainable development projects (urbanhotels, beachhotels, cruises) and hassupportedbothconventional government in thisregard. Forexample, inCostaRicathe sector tourism the expanding in effective prove especially inrural settings. Publicpolicycan the income-earningcapacityofpopulation, and othersectorsoftheeconomytoincrease toformulatelinksbetweentourism isimportant It inplace. policies areput iftargeted women’s economicempowerment tourism hasconsiderable potentialtosupport to thetourismsectorasentrepreneurs, however, participation. Giventheeasieraccessofwomen characteristicslabour market andwomen’s in theglobaltourismsectortermsof shares the common gender features observed Overall, thetourismsectorinCentral America (UNWTO andUN Women, 2011). sector thaninothersectorsoftheeconomy be employersorentrepreneursinthetourism skilled jobsasemployees, theyaremorelikelyto Although women are highly segregated into low- and Panama (UNWTO andUN Women, 2019). economy inCostaRica, ElSalvador, Honduras, Trade and Gender Linkages: An Analysis of Central America 4d as discussed in box 1, and the poverty alleviation details about the econometric model and data effect of the expansion of the tourism sector can sources are presented in Annex 2. benefit women to a greater extent than men. module Table A.2.1 in Annex 2 presents the empirical Finally, gender norms and stereotypes form a findings for the first part of the macroeconomic barrier for women in the region and need to be empirical analysis. Overall, the magnitudes addressed in tourism as in all sectors. Without of estimated coefficients are relatively small, addressing them, it will not be possible for implying that trade openness measures have women to reap the full benefits from tourism low economic significance in terms of their development. impact on women’s share of employment in each broad sector. According to these findings, 4.4. Empirical analysis trade openness has a positive relationship with the share of female employment in agriculture Trade openness interacts with gender inequalities and industry. Specifically, a 10 percentage through multiple transmission channels, as point increase in trade openness is associated discussed in Volume 1 (UNCTAD, 2014a). Module with a 0.27 of a percentage point increase in 2 explained in detail how trade policy affects agriculture’s share in total female employment, labour market outcomes from a theoretical point and with a 0.22 of a percentage point increase of view. Briefly, trade liberalization affects the in industry’s share. In contrast, trade openness is sectoral composition of production, which in turn negatively associated with the share of services affects the gender distribution of employment in total female employment. These findings are in the economy. International competition may in line with the findings in Bussmann (2009) for also lower gender discrimination in employment developing countries, as discussed above. and wages by rendering it costly. Finally, trade openness may induce technological upgrading Next to be examined is the impact of merchandise in the domestic economy and reduce the need for export and merchandise import shares on the physically demanding skills, which would help share of each broad sector in women’s total women find more employment opportunities employment. The import share has a statistically than before. The complex nature of the trade and significant and positive association with gender nexus shows that the actual impact of women’s share of employment in agriculture, trade openness on gender inequalities is highly while the impact of the export share is context-specific and cannot be generalized. This insignificant. Specifically, a 10 percentage point is why it is important to carry out case studies for increase in the import share in GDP is associated each country and/or sectoral context. with a 0.82 of a percentage point increase in agriculture’s share in total female employment. This section presents a macroeconomic empirical This may be reflecting the influence of two analysis on how trade openness affects gendered factors. On the one hand, women may be hired employment patterns in the broad sectors of more as a source of competitive advantage to the economy using data for the six countries in compete with cheap imports of agricultural final Central America. The analysis consists of two parts. goods in the domestic market. On the other hand, The first part follows a framework similar to that it might also be the case that imports, mainly of Bussmann (2009).40 Specifically, the empirical through imported inputs (raw materials and/ analysis in the first part estimates the impact of or and intermediate goods), increase demand trade openness, which is measured as the share of for women’s labour due to the complementary exports and imports in GDP, on the share of each role that imported inputs play with labour in broad sector (i.e. agriculture, industry, services) in production. total female employment of a country. In a second specification, trade openness is replaced with the The export share is positively associated with shares of merchandise export and import shares the share of the industrial sector in total female in GDP. Merchandise exports and imports are employment, while the import share does not then decomposed by trading partners in a third have a statistically significant association. specification to examine the underlying factors. Specifically, a 10 percentage point increase in the export share is associated with a 0.91 of Bussmann (2009) found that trade openness a percentage point increase in the industrial is associated with an increase in the share sector’s share of female employment. This may of women employed in the services sector be due to an expansion of female-intensive sub- in developed countries, while in developing sectors such as garments, apparel, etc. as exports countries trade openness has been correlated increase. No statistically significant relationship with an increase in the share of women working is found for export and import shares in the case in the agricultural and industrial sectors. Further of the services sector.

33 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 34 Hence, increasedtrade openness, mainlydriven ratiofemale-to-male employment inagriculture. trade opennessisnegativelyassociatedwiththe part, second the from findings the to According macroeconomic empiricalanalysis. the of part second the for findings empirical the the economy. Table A.2.2 in Annex 2 presents ineachbroad sector of to maleemployment is measuredastheratio offemale employment American countries. gap The genderemployment gapintheCentralon thegenderemployment ofvariousthe impact trade opennessmeasures macroeconomic empirical analysis examines on maleemployment. ofthe The secondpart each broad sector while ignoring the impact onthe focused the analysis oftrade in impact onwomen’semployment of part first The many ofwhicharenontradable sectors. sector; bedisplacedtoservices, womenmight industrial the in destruction job of influence the of reflection a be may Pacific. That the and Asia East from imports with association significant hasapositiveandstatistically employment In contrast, theservicessector’ssharein women’s from cheap imports Asian developingcountriesandespeciallyChina. of surge the of influence the reflect to likely is sector.This industrial Pacific the the and Asia seems tobeassociatedwithjobdestructionin East from competition female-intensive activities. However, import in Central Americathroughtheexpansionof inindustry women’semployment LAC helpboost that imply findings exports to marketsinhigh-income countries and These industry. in share negative associationwithwomen’semployment a share of GDP have a statistically significant and contrast, imports from East Asia and the Pacific as ofa forhigh-incomecountries.percentage point In 0.8 is effect same the while employment, increase intheindustrialsector’sshareoffemale to LAC isassociatedwitha1.8percentage point increaseintheshareofexports percentage point a 10 Specifically, countries. high-income of that of exports to LAC is larger than The impact share in industry.with women’s employment association positive and significant statistically income countriesandtoLAC inGDPhavea of industry. The sharesofexportstobothhigh- analysis revealsinterestingresultsinthecase employment. The regionally disaggregated with the share oftheagricultural sectorinwomen’s association positive and astatistically significant have Pacific the and Asia East to the broadsectorsofeconomy. Onlyexports across distribution in GDPonfemaleemployment ofthe shares andimport impacts ofmerchandise export terms in difference any make partners tobeinvestigatediswhethertradingNext negative effectsinothersub-sectors. bypossible bebalancedout sectors might relative to men’s in certain sub- employment onwomen’s openness trade of effects positive the broadsectorsofeconomy, orbecause across on women’sandmen’semployment be because trade liberalization has similar effects in Central Americaineconomicterms. This may gap employment gender the affected not have openness anditsvarious components seemto disaggregated bytrading partners. Hencetrade holds shares andimport ofexport for theimpact same The significant. economically not relationshipsare thestatisticallysignificant that sectors, all in small very are coefficients implying However, the magnitudes of the estimated ofimports.the negativeimpact outweighs ofexportsthat driven bytheimpact ratiofemale-to-male employment inservices, share. import Trade opennessispositivelyassociatedwiththe the of effect opposite an by out relativetomen’s is beingcancelled employment favourable effect of the export share on women’s of effects the sharesrevealsthat andimport export individual the at association looking However, significant statistically gapinindustry.with thegenderemployment no has gapinagriculture.employment Trade openness employment men’s to than women’s, resultinginalargergender beneficial more be to tends ofexports, share the of influence the by However, thegendergap inLFPR(i.e. theratio of literacygap inadult isquitelowinthe region. in theCentral Americancountries. The gender degrees different to persist inequalities Gender among itsmembers. and theSICA extendedthiscooperation further basis ofregionalintegration in Central America, Integration was that signedin1960formedthe The General Treaty onCentral AmericanEconomic the economic leg of this transformation process. privatization andglobaleconomicintegration, was which was focusedon macroeconomicbalance, the previousera. The structural process, adjustment of conflicts armed the following peace of process a durable Peace Accordsadoptedin1996brought economic termssincethe1990s. The Guatemala changesinbothpoliticaland through important Nicaragua andPanama. The region has gone – CostaRica, ElSalvador, Guatemala, Honduras, and gender nexus in Central American countries and trade (UNCTAD, 2014a)toexamine thetrade Volume 1ofUNCTAD’s teachingmanual ongender This modulehasappliedtheconceptscoveredin 5.

recommendations Main findingsandpolicy Trade and Gender Linkages: An Analysis of Central America 4d female LFPR to that of male) is significant. Women also critical to facilitate membership in producer are highly segregated in the services sector – the organizations given their proven benefits. main economic activity in all countries in terms module of employment, as is also the case for LAC – The maquila sector has become an engine mainly holding positions in wholesale and retail of employment growth in the region, and is trade, public services, tourism and domestic characterized by a feminized labour force and service work. Agriculture accounts for less than high occupational gender segregation. The main 10 per cent of female employment in all six reason behind the feminization of labour in EPZs in countries, and the role of industrial employment the apparel and textile industry is the competitive has declined over time for women in the region. advantage that female workers provide firms that Gender gaps persist in access to finance and are under increased international competition. land and in the division of unpaid work. In terms In terms of working conditions, there is evidence of institutional structures for gender equality, of a wage premium for maquila employment in Central American countries as a regional Honduras, El Salvador and Guatemala. Compared group have taken important steps, such as the to outside firms, a smaller gender wage gap is establishment of the COMMCA in 2005, although found in maquilas in Honduras and a higher gender mainstreaming in regional policymaking gender wage gap in Guatemala. Non-wage was neglected when SICA was first formed. working conditions such as the right to organize can be adverse in maquilas, as documented for Section 4 of this module examined the gender Guatemala and Honduras. Working hours also implications of trade openness in the selected tend to be long. These findings imply that it is countries through both a review of case studies important to take into consideration issues on and a macroeconomic empirical model. The the quality of employment while supporting case studies were selected as three areas with employment growth in the maquila sector. important gender implications from each of the Ensuring the adequate implementation of labour broad sectors of the economy: coffee in agriculture, laws is critical in this regard. maquilas/EPZs in industry, and tourism in services. The macroeconomic empirical analysis found that The tourism sector has played an important role trade openness is positively associated with the in the economic transformation process in Central share of agriculture and industry in total female America, and bears important gender implications employment, while it has a negative relationship due to its significance as a source of employment with the share of the services sector in women’s for women. Among the Central American countries, employment. However, the economic significance Panama and Costa Rica have important shares of these effects is low. of tourism receipts in total exports. Small-scale tourism, which covers a wide range of services from Coffee is an important export cash crop, budget accommodation to luxury “boutique” travel especially in Guatemala, Honduras and options, is more common in Central American Nicaragua. There is a highly gender-segregated countries than in the Caribbean, where a mass division of labour in the coffee value chain, with tourism model prevails. This is important because women concentrated at the lower end of the a tourism model based on SMEs is more useful to chain. Producer organizations, cooperatives and serve the goals of gender equality, especially in the certification schemes play an important role area of entrepreneurship. in supporting women in the coffee value chain by easing their access to land, finance, markets In terms of wage workers, the tourism sector has and knowledge. However, only 20-25 per cent a highly feminized workforce in the region, as is of smallholder farmers in Central America typical in other developing countries. However, are members of a farmer organization. Costs those positions are mostly low-paying jobs such of complying with certification and quality as housekeeping, while men have better access requirements are important inhibiting factors to higher-paying positions such as cooks, guides, in the case of fair trade. Moreover, traditional etc. Despite this segregation as wage employees, gender roles in both productive and reproductive women are more likely to be employers or spheres constrain women’s capacity to fully entrepreneurs in the tourism sector than in benefit from certification schemes. Smaller- other sectors of the economy. In this regard, scale and women-only settings can be more tourism has considerable potential to support supportive in terms of organizational structure. women’s economic empowerment if targeted In order to support women’s participation in the policies are put in place. One such policy option coffee sector as producers, targeted policies need would be the formulation of links between to be introduced or extended to ease supply-side tourism and other sectors of the economy to constraints such as access to land and finance, increase the income-earning capacity of the which are disproportionally felt by women. It is population, especially in rural areas.

35 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 36 paid workonanequalbasiswith men. theirparticipationin andsupport women visible support, etc. is necessary to make the work of programmes suchasparentalleave, childcare unpaid care work through the help of social welfare labour) spheresoftheeconomy. Recognizing consider boththepaidandunpaid(orreproductive process. Gender-sensitive publicpoliciesneedto in society even though this goal is a longer-term transform thetraditional discriminatorynorms in section3. totakesteps isalsoimportant It asdiscussed life, of economic domains different wide policiestoaddressgenderinequalitiesin targeted capacity-building policiesandeconomy- regional levels. This requirestheintroductionof the design of trade the national and policy both at equality needs tobeconsideredasacross-cuttingissuein gender policies, sector-specific Besides allofLAC. throughout the region. Suchsegmentationiscommon segmentationin of genderedlabour market can beinstrumentaltobreakthishighdegree asdemand-side as well policies includingsectoral incentiveprogrammes, offices, employment such asvocationaltraining programmes and income and wages. policies Active labour market ofincomeandgenderinequalityin distribution which takentogethertranslate intounequal instability, andtheabsence of work contracts, lower incomes, limitedsocialsecurity coverage, than men. These jobsarecharacterized by into low-productivity sectorstoagreaterextent womenaresegregated American countriesisthat incountries’GDP percapita. However, commontoallCentral differences the reflect informality patternsintermsofworkstatusand Employment membership isespeciallycriticalinthisregard. section 4. Targeting thebarrierstowomen’sfull in discussed as also schemes, certification and women’s participationinproducerorganizations cash cropsectors. tosupport isalsoimportant It ofagriculturalpart andtrade policyin export tenure programmes needtobeintroduced as of genderinequalityinaccesstoland, targeted power inthehousehold. Giventhehighdegree productive resources, andexercising bargaining organizations, accessing technical training and land coffee, of for theirroleinaccessingcredit, joiningproducer case the ownership and tenuresecurity are alsocritical In agriculture. in women’s successfulparticipationasproducers in eachsector. Accesstolandiscriticalfor to easegenderedsupply-side constraints isimportant it integration, trade from benefits sectorsandhelpthemfullyreapthe export women’sparticipationin In ordertosupport which women hold a significant share, would share, significant a hold women which are women. SMEs, Measurestosupport among workers, own-account to support manyofwhom andcashtransfersincome support areneeded workers includingdomestic workers. Direct informal to extended be should benefits), which and relief) schemes(e.g. income support unemployment payment fiscal other and security retention (e.g. wage subsidiesand/orsocial workers includeincentiveprogrammes forjob The immediate policy responses for wage to avoidtheexacerbation ofgenderinequalities. and social crisis driven by the pandemic in order responsive policieswhiletacklingtheeconomic isthereforenecessarytodevelop gender-It are highlyfemale-intensiveinCentral America. sector andtheinformalsector, bothofwhich heavilyintheservices 19 pandemicarefelt Finally, theeconomicimpactsofCOVID- comparability isensuredacrosscountries. are capacity supported throughregionalfunds, and that fiscal less with governments that the regional level to ensure to be coordinated at measures directedtoward genderequalityneed policies the of already inplace. National-levellegalandpolicy effectiveness the monitor and governments canbetterdesignpublicpolicies such analyses on gender and trade. Inthis way, frameworks andthedatarequirementsfor a reviewofboththeavailable assessment life. Inthisregard, UNCTAD (2019b)provides productive andreproductivespheresofeconomic both in outcomes economic influence relations qualitativestudiesonhowgender and support quantitativegenderstatistics,capacity tocollect issues. Governmentsneedtofurtherdeveloptheir disaggregated dataongenderandtrade-related toolsrequiretheuseofrichsex-These assessment programmes sectors,support inexport etc. programmes fordisplacedworkers, producer of compensatorymeasuressuchastraining development the to contribute and effects adverse wouldhelpidentifyanyrealized assessment Ex-post occur. may that effect gender adverse any address to and/or trade from benefits expected the needtobeintroducedincrease measures that agreements. Such analytical tools help identify the ex-ante toolfortrade assessment genderimpact introduced the Trade andGender asan Toolbox trade agreements. Inthisregard, UNCTAD (2017b) ex-ante implement andex-post assessments of trade policy, governments shouldsystematically issues. gender-specific for Besides introducingagenderperspectiveintheir trade and gender on all issues they tackle, in addition to a specific chapter incorporate of agenderperspectiveinthetreatment With regardtotrade, trade agreementsshould Trade and Gender Linkages: An Analysis of Central America 4d help prevent closures and bankruptcies. These and training programmes, capacity-building measures include sectoral funds, social security programmes to facilitate access to finance, and fiscal payment exemptions or deferrals, fast production inputs and market information module and subsidized loans, relaxation of regulations, should all incorporate a gender perspective in and taxes on targeted sectors. order to address the specific constraints faced by women. Finally, policy instruments such as Besides these broad measures that would help hotlines need to be introduced in the short term women in different economic roles, governments to help the victims of gender-based violence, could prioritize women-owned enterprises in which has increased in many countries during public procurement. As a longer-term goal, the pandemic. Enactment and full enforcement infrastructure programmes that target specific of laws against gender-based violence should sectors, delivery of public services, education become a priority as a longer-term solution.

37 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 38 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Exercises andquestionsfor discussions services). Discussbriefly. trade shareinindividualsectors(i.e. opennessandthefemaleemployment agriculture, industry, Based onthefindingsofmacroeconomicempiricalanalysis, explaintherelationshipbetween empowerment? forwomen’s policiesareneededtorealizethefullpotentialoftourismdevelopment What Central America? the regionallevelin arethegenderimplicationsoftourismsectorgloballyandat What throughtourismdevelopment? empowerment isthenatureoftourismmodelinCentralWhat America? implyforwomen’s doesit What intheregion? change implyforwomen’semployment How have EPZs evolved over time in some of the countries in Central America? does this What dimensionsinyouranswer.their different implications ofEPZs arethewellbeing What forwomeninCentral Americaovertime?Discuss How couldCentral womenproducersinthecoffeevalue Americancountriessupport chain? certifications tocreatepathways towomen’sempowerment? of women’s roles in the coffee value chain? the capacity of are the constraints limit What that roledoproducerorganizations andcertificationschemesplayinsupportingtheupgradingWhat womencoffeeproducersfacethat inCentral America? is the gender division of labour in the coffee valueWhat chain? are the major constraintsWhat America region?Givespecificexamples inyouranswer. How couldgenderbemainstreamedintrade achievedintheCentral policy? isit extent To what Central Americancountries?Discussbriefly. How doestrade groupsandtrading structureintermsofproduct partnerscompareacrossthe evolvedovertime? How hasit topromotegenderequalityinCentral isthemajorregionalpolicyinstrument America? What in theregion? countries? aretheimplicationsofsectoral patternsforwomen’sempowerment What employment isthesectoral formenandwomeninCentralWhat compositionofemployment American outcomes andlabour force participation? How domenandwomencompareintheCentral toeducation Americancountrieswithrespect aretheinstitutionaloriginsofregionalintegrationWhat intheCentral Americaregion? Trade and Gender Linkages: An Analysis of Central America 4d ANNEXES module

Annex 1. Top export/import products and partners

Table A.1.1. Top export and import products at the HS 6-digit level Top three export products Top three import products

Costa Rica - Needles, catheters, cannulae and the like, not - Petroleum oils, etc. (excluding crude); elsewhere specified (n.e.s.) preparation - Pineapples, fresh or dried - Other medicaments of mixed or unmixed - Bananas, including plantains, fresh or dried products - Transmission apparatus, for radio-telephony, television, etc. with reception apparatus

El Salvador - T-shirts, singlets and other vests, of cotton - Petroleum oils, etc. (excluding crude); - Jerseys, pullovers, etc., of man-made fibres preparation - Electrical capacitors, fixed, tantalum, n.e.s. - Petroleum gases and other gaseous hydrocarbons - T-shirts, singlets and other vests, of cotton

Guatemala - Bananas, including plantains, fresh or dried - Petroleum oils, etc. (excluding crude); - Raw cane sugar, in solid form preparation - Coffee, not roasted or decaffeinated - Transmission apparatus, for radiotelephony, television, etc. with reception apparatus -Other medicaments of mixed or unmixed products

Honduras - Coffee, not roasted or decaffeinated - Petroleum oils, etc. (excluding crude); - Ignition wiring sets & other wiring sets of a kind preparation - Frozen shrimps and prawns - Other medicaments of mixed or unmixed products - Transmission apparatus, for radiotelephony, television, etc. with reception apparatus

Nicaragua - Ignition wiring sets and other wiring sets of a - Petroleum oils, etc. (excluding crude); kind preparation - T-shirts, singlets and other vests, of cotton - Petroleum oils and oils obtained from bituminou - Coffee, not roasted or decaffeinated - Weft knits or crocheted fabrics of cotton

Panama - Other medicaments of mixed or unmixed - Other medicaments of mixed or unmixed products products - Sulphonamides - Sulphonamides - Amino-acids and their esters, not >1 oxygen fun - Amino-acids and their esters, not >1 oxygen function

Source: World Integrated Trade Solution, Trade at a Glance, country profiles, available at https://wits.worldbank.org/ CountrySnapshot/en/WLD (accessed on 28 February 2020). Note: Data are for 2016 for Panama, for 2017 for Guatemala and Honduras, and for 2018 for Costa Rica, El Salvador and Nicaragua. HS: Harmonized Commodity Description and Coding System.

4 module d Trade andGenderLinkages: AnAnalysisofCentral America 𝐹𝐹𝐹𝐹𝐹𝐹 40 𝑖𝑖𝑖𝑖 𝐹𝐹𝐹𝐹𝐹𝐹

= 𝑖𝑖𝑖𝑖 𝑘𝑘 ∑ 𝐹𝐹𝐹𝐹𝐹𝐹 = 3 = 1 𝛽𝛽 𝛽𝛽 𝑖𝑖𝑖𝑖 1 𝑘𝑘 1 = 𝐸𝐸𝐸𝐸 𝐸𝐸𝐸𝐸 𝛽𝛽 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 𝑘𝑘 1 countries, Latin AmericaandtheCaribbean, and GDP. as theshareoftotaltrade (exportsandimports) in defined is and openness trade to refers interest, with themerchandise export-to-GDP ratio (EO In a second specification, trade openness is replaced unobservable factors intheregressions. n tid specification, third a In forthedirectionoftradeto account flows: by trading partners(EO merchandise export-to-GDP ratios distinguished φ where period 1991–2018: from sixcountriescoveredinthisstudyforthe industry and services) using balanced paneldata broad sector of the economy (i.e. agriculture, The following equation is estimated for each Annex 2. Analysis Empirical CountrySnapshot/en/WLD (accessedon28February 2020). Source: and othercontrol variables. unrelated totrade openness, itssubcomponents, are for anyshockscommontoallcountriesthat by trading partnersIO merchandise import-to-GDP ratios distinguished and the merchandise import-to-GDP (IO for country shareineachbroadsector female employment 𝐹𝐹𝐹𝐹𝐹𝐹 Panama Nicaragua Honduras Guatemala SalvadorEl Costa Rica 𝐹𝐹𝐹𝐹𝐹𝐹 𝑇𝑇𝑇𝑇 + + t Table A.1.2. represents time-specific fixed effects to control 𝑖𝑖𝑖𝑖 𝐹𝐹𝐹𝐹𝐹𝐹 𝛽𝛽 𝑖𝑖𝑖𝑖 𝑘𝑘 ∑ 𝑖𝑖𝑖𝑖 𝐹𝐹𝐹𝐹𝐹𝐹

= = 3 2 X =

World Integrated Trade Solution, Trade aGlance, at country profiles, available https://wits.worldbank.org/ at + 𝐼𝐼 jit 1 FES 𝑖𝑖𝑖𝑖 𝑘𝑘 ∑ 𝐹𝐹𝐹𝐹𝐹𝐹 𝑖𝑖𝑖𝑖 𝑘𝑘 ∑ 𝐹𝐹𝐹𝐹𝐹𝐹 = 3 represents eachofthecontrolvariables. 𝛽𝛽 = 3 = 1 𝑗𝑗 ∑ = 𝑖𝑖𝑖𝑖 1 2 = 𝑘𝑘 Toptrade (percent andimports) total shares in exports partners top and import export 𝛽𝛽 3 𝛽𝛽 𝑖𝑖𝑖𝑖 it 𝛽𝛽 1 𝛽𝛽 𝑖𝑖𝑖𝑖 i and time 𝑘𝑘 , variable, thedependent showsthe 1 + 1 1 𝐼𝐼 𝑘𝑘 1 = 𝐸𝐸𝐸𝐸 𝐸𝐸𝐸𝐸 𝐼𝐼 = 𝛿𝛿 𝐸𝐸𝐸𝐸 𝐸𝐸𝐸𝐸 ------𝑗𝑗

𝑗𝑗 ∑ 𝛽𝛽 𝑖𝑖𝑖𝑖 𝑘𝑘 𝛽𝛽 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 𝑘𝑘 =

1 3 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 𝑘𝑘 Costa Rica(6.7 per cent) Colombia (9.5 percent) United States(20.6 per cent) per cent)Mexico (5.6 SalvadorEl per cent) (5.7 United States(61.1 percent) Belgium (7 percent) Germany (7.9 per cent) United States(40.2 per cent) Honduras (8.8 percent) SalvadorEl (11.1 percent) per cent) United States(34.5 per cent) Guatemala (14.4 Honduras per cent) (15.3 per cent) United States(44.5 Belgium (6 percent) Netherlands (6 percent) United States(41.1 percent) 𝑋𝑋 1 𝑇𝑇𝑇𝑇 + + 1 𝑇𝑇𝑇𝑇 + + + 𝑗𝑗 𝑗𝑗𝑗𝑗 𝛿𝛿 𝛽𝛽 𝑘𝑘 ∑ 𝑖𝑖𝑖𝑖 𝛽𝛽 𝑘𝑘 ∑ 𝑖𝑖𝑖𝑖 𝑗𝑗 = 𝑗𝑗 ∑ 3 2 = 3 2 + 𝐼𝐼 1 = +

3 + 𝐼𝐼 1 𝑋𝑋 𝛽𝛽 t; 1 𝑗𝑗 ∑ 𝛽𝛽 it k 𝑖𝑖𝑖𝑖 it 𝑗𝑗 2 𝑗𝑗 ∑ k 𝑘𝑘 = . 𝑖𝑖𝑖𝑖 3 ), andIO 𝜑𝜑 TO 2 𝑘𝑘 = 𝑗𝑗𝑗𝑗 𝛿𝛿 3 1 k + 𝐼𝐼 Top partners three export 1 + 𝑗𝑗 𝐼𝐼 𝐼𝐼 𝑡𝑡 𝛿𝛿 𝐼𝐼 𝛿𝛿 refers tohigh-income EO

+ 𝑗𝑗 𝑗𝑗 ∑ it 𝑖𝑖𝑖𝑖 𝑘𝑘 𝑋𝑋 𝑗𝑗 𝑗𝑗 ∑ =

+ 𝑖𝑖𝑖𝑖 3 , the main variable of 𝑘𝑘 𝑋𝑋 =

3 𝑋𝑋 1 + 𝑗𝑗 𝑗𝑗 1 + 𝜑𝜑 𝑗𝑗 it 𝑗𝑗𝑗𝑗 𝑗𝑗𝑗𝑗 𝛿𝛿 𝑗𝑗𝑗𝑗 𝑢𝑢 𝛿𝛿 𝑗𝑗 𝑗𝑗 ∑

𝑗𝑗 is replacedwith 𝑗𝑗 ∑ 𝑡𝑡 = +

3 𝑋𝑋 𝑖𝑖𝑖𝑖 it = +

it + 3 1 𝑋𝑋 isreplacedwith 𝑗𝑗 + 1 𝜑𝜑 𝑗𝑗 represents the 𝑗𝑗𝑗𝑗 𝛿𝛿 , 𝜑𝜑 𝑗𝑗𝑗𝑗 𝛿𝛿

𝑗𝑗 𝑡𝑡 𝛼𝛼 𝑗𝑗

+ 𝑡𝑡 𝑋𝑋 𝑢𝑢

+ + 𝑋𝑋 + 𝑡𝑡 𝑗𝑗 𝜑𝜑 𝑗𝑗 𝑖𝑖𝑖𝑖 𝑗𝑗𝑗𝑗 𝜑𝜑 𝑢𝑢 𝑗𝑗𝑗𝑗 + 𝑢𝑢 𝑡𝑡 𝑖𝑖𝑖𝑖 + 𝑡𝑡 . 𝑖𝑖𝑖𝑖

+ + , +

, 𝑢𝑢 𝛼𝛼

𝛼𝛼 𝑢𝑢 it 𝑡𝑡 𝑢𝑢 ) ratio 𝑖𝑖𝑖𝑖 𝑡𝑡 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 + + . .

𝑢𝑢 𝑢𝑢 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 it . )

command xtsccbyHoechle(2007) inStata. methodology isadoptedusing theuser-written standard errors,robust theDriscoll-Kraay To obtainheteroskedasticityand autocorrelation cross-section dependence inthe estimation stage. checks forheteroskedasticity, autocorrelationand and othersocio-economicsfactors. The model culture asreligion, such characteristics specific allowsforcontrolling country-data modelthat panel fixed-effect a using estimated is model The database. the World Bank’s Indicators World Development trade measuresandcontrol variables arefrom Labour Organization (ILO) statistics, anddatafor dataarefromInternational The employment their economiestotrade. small andlargecountriesintermsofopeningup between differences the for check to as well as force labour the of size the reflect to introduced on women’s employment. Population size is accounts for the influence of domestic care work structure.on theemployment The fertilityrate of economic development controls for the impact 2010UnitedStatesdollars per capitainconstant Control variables areintroducedasfollows: GDP and theirdestination/origin: flows trade of direction the both for accounting partners. The equationtakesthefollowingform trading main three as Pacific the and Asia East 𝐹𝐹𝐹𝐹𝐹𝐹 𝑖𝑖𝑖𝑖 𝐹𝐹𝐹𝐹𝐹𝐹 = ------

𝑖𝑖𝑖𝑖 𝑘𝑘 ∑ United States(9.5 percent) Singapore (18.9 percent) China (31.3 percent) Mexico (10.1 per cent) China (13.2 percent) United States(27.7 per cent) Guatemala (8.6 percent) China (15 percent) per cent) United States(34.7 Mexico (10.7 per cent) China (10.7 per cent) United States(39.9 percent) Guatemala (9.9 percent) China (14 percent) United States(32.1 percent) Mexico (7.1 per cent) China (13.7 per cent) United States(39.1 percent) 𝐹𝐹𝐹𝐹𝐹𝐹 = 3 = 1 𝛽𝛽 𝛽𝛽 𝑖𝑖𝑖𝑖 1 𝑘𝑘 1 = 𝐸𝐸𝐸𝐸 𝐸𝐸𝐸𝐸 𝛽𝛽 𝑖𝑖𝑖𝑖 𝑖𝑖𝑖𝑖 𝑘𝑘 1 Top partners three import 𝑇𝑇𝑇𝑇 + + 𝛽𝛽 𝑘𝑘 ∑ 𝑖𝑖𝑖𝑖 = 3 2 + 𝐼𝐼 1 𝛽𝛽 𝑗𝑗 ∑ 𝑖𝑖𝑖𝑖 2 𝑘𝑘 = 3 1 + 𝐼𝐼 𝐼𝐼 𝛿𝛿 𝑗𝑗 𝑗𝑗 ∑ 𝑖𝑖𝑖𝑖 𝑘𝑘 =

3 𝑋𝑋 1 + 𝑗𝑗 𝑗𝑗𝑗𝑗 𝛿𝛿 𝑗𝑗 𝑗𝑗 ∑ = +

3 𝑋𝑋 1 𝑗𝑗 𝜑𝜑 𝑗𝑗𝑗𝑗 𝛿𝛿 𝑗𝑗 𝑡𝑡

+ 𝑋𝑋 + 𝑗𝑗 𝜑𝜑 𝑗𝑗𝑗𝑗 𝑢𝑢 𝑡𝑡 𝑖𝑖𝑖𝑖 + + ,

𝛼𝛼 𝑢𝑢 𝑡𝑡 𝑖𝑖𝑖𝑖 + .

𝑢𝑢 𝑖𝑖𝑖𝑖 .

Trade and Gender Linkages: An Analysis of Central America 4d

Table A.2.1. Macroeconomic analysis estimation results for the share of each broad sector in total female employment

Agriculture Industry Services module (1) (2) (3) (1) (2) (3) (1) (2) (3) Trade/GDP 0.0273* 0.0219* -0.0493** (0.0135) (0.00957) (0.0161) Export/GDP -0.0254 0.0914** -0.0646 (0.0406) (0.0291) (0.0620) Import/GDP 0.0822* -0.0328 -0.0509 (0.0331) (0.0211) (0.0463)

Exports to high- -0.0621 0.0808* -0.0194 income countries/GDP

(0.0365) (0.0330) (0.0464)

Exports to LAC/GDP 0.160 0.182* -0.338

(0.147) (0.0758) (0.199)

Exports to EAP/GDP 0.492** -0.278 -0.215

(0.171) (0.175) (0.235)

Imports from high- -0.00429 -0.0386 0.0438 income countries/GDP

(0.0347) (0.0268) (0.0309) Imports from LAC/ 0.172 0.0152 -0.190 GDP (0.0987) (0.0661) (0.0996)

Imports from EAP/GDP -0.0780 -0.288*** 0.365**

(0.0912) (0.0659) (0.115)

ln(GDP per capita, constant 2010 United 4.225** 3.597* 4.230 -4.414*** -5.214** -2.780* 0.156 1.583 -1.467 States dollars)

(1.573) (1.557) (2.217) (0.915) (1.328) (1.367) (1.954) (2.504) (2.672) ln(population) 9.893** 6.843* 7.482* 7.229** 4.457 5.846* -17.00*** -11.16** -13.22** (3.170) (3.084) (3.091) (2.308) (3.130) (2.858) (3.400) (3.433) (4.004) Fertility 3.589*** 3.154*** 3.777*** 4.578*** 3.886*** 4.372*** -8.142*** -7.017*** -8.126*** (0.396) (0.497) (0.352) (0.335) (0.521) (0.365) (0.519) (0.614) (0.537) Constant -193.7*** -140.1** -156.6*** -75.18* -22.50 -65.15 367.1*** 260.7*** 320.2*** (39.11) (39.94) (32.58) (30.15) (42.97) (36.55) (40.17) (40.16) (43.62) R-squared 0.368 0.415 0.508 0.728 0.747 0.757 0.631 0.661 0.708 Number of 163 163 163 163 163 163 163 163 163 observations

Source: Calculations by the UNCTAD secretariat. Note: Driscoll-Kraay standard errors in parentheses. *** Significant at the 1 per cent level. ** Significant at the 5 per cent level. * Significant at the 10 per cent level. LAC: Latin America and the Caribbean, EAP: East Asia and the Pacific.

41 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 42 Note: Source: Calculationsthe UNCTAD by secretariat. per cent level. the10 percent at * Significant LAC:the Caribbean, and LatinAmerica EAP:the Pacific. Asiaand East R-squared observations Number of Constant

Fertility (population) ln per capita) ln(GDP

GDP from LAC/ Imports GDP from EAP/ Imports

GDP countries/ high-income from Imports EAP/GDP Exports to

LAC/GDP Exports to GDP countries/ high-income Exports to

Export/GDP

Trade/GDP

Import/GDP Table A.2.2. Driscoll-Kraay standard errors inparentheses. level. the1 percent level. per cent the5 at ***Significant at **Significant

Macroeconomic analysis estimation results forthe gender gap employment ineachbroad sector -0.000416** (0.000157) (0.0682) 0.0354** (0.0243) -2.449** (0.0107) 0.199*** (0.949) 0.0576 0.620 162 (1)

Agriculture (0.000459) (0.000462) -0.00179** 0.00146** 0.0494*** (0.00817) -3.095*** 0.206*** (0.0165) 0.0893* (0.0431) (0.615) 0.629 162 (2)

0.0000349 (0.000459) (0.000520) (0.000563) -0.000969 -0.00549** 0.00663** (0.00940) 0.000742 (0.00223) (0.00126) (0.00147) 0.0375** 0.249*** (0.0232) (0.0510) 0.00101 -2.713** (0.685) 0.0462 0.640 162 (3)

(0.000336) 0.000486 (0.0300) (0.0169) (0.0739) -0.227** 0.0387* 3.010** 0.103** (1.040) 0.476 162 (1)

-0.00300*** (0.000676) (0.000672) 0.00388*** 0.0866** Industry 4.064*** (0.0737) -0.278** (0.0155) (0.0312) (0.987) 0.0170 0.533 162 (2)

(0.000970) (0.000829) -0.00310** -0.00670* (0.00946) 0.00359** 0.000550 (0.00320) (0.00454) 0.0407*** (0.00148) (0.00119) 0.00334* -0.202*** -0.00233 (0.0475) (0.0301) 0.124*** 2.482** (0.654) 0.552 162 (3)

(0.000827) 0.00229** -0.998*** -0.0836* 0.694*** (0.0348) 11.05*** (0.106) (0.180) (2.349) 0.417 162 (1)

-0.00563*** 0.00809*** (0.00104) (0.00131) (0.0798) 0.650*** -0.155*** -1.192*** 14.88*** Services (0.0211) (1.959) (0.157) 0.418 162 (2)

-0.00820*** (0.00466) (0.00684) -0.0644** (0.00201) (0.00319) 0.0108*** -0.905*** (0.00173) (0.0860) 0.00198 (0.0163) (0.0719) (0.0136) 0.00119 0.471*** 11.48*** (0.949) 0.0161* 0.0219 0.547 162 (3)

Trade and Gender Linkages: An Analysis of Central America 4d Annex 3. Case Studies The second-stage estimation uses the ordinary least squares method and estimates the impact A.3.1. Maurizio Bussolo, Samuel Freije, Calvin of trade measures on the intercept from both module Z. Djiofack, and Melissa Rodríguez (2011): labour market participation and earnings “Trade Openness and Labor Gender equations, and the skill wage premium, sector Gaps” wage premium and sector-specific skill wage premium from the earnings equation. The trade- Objective and background related measures include own tariffs, faced This study examines the relationship between tariffs, import penetration, export shares, and gender disparities and trade for the Dominican real exchange rates, and they are interacted with Republic–Central America Free Trade Agreement the gender measure to determine if the impact of (DR-CAFTA) region and aims to determine whether trade differs between male and female workers. increased trade creates more employment Findings opportunities for women relative to men, and how trade affects gender wage gaps in Central The findings from the first-stage estimation America. The analysis uses microeconomic on labour market participation show no household data to answer these questions. association between trade openness and the labour market participation decision in the six Given that the countries in the region have categories studied. Hence, trade openness has all engaged in a major trade agreement with no statistical relation with the observed changes the United States (DR-CAFTA), the findings in the gender composition of the labour force of the analysis helps to identify possible between formal and informal sectors and among complementary economic policy measures. This economic activities. This is surprising given the would enhance the expected favourable effects employment shifts observed in the region since while compensating for any unfavourable the CAFTA-DR was adopted, and therefore needs outcome that trade openness may have on to be investigated further. gender equality and household welfare. In contrast, the findings from the first-stage Data and methodology estimation on earnings show some relationship The study uses micro/individual-level data from between trade openness and wage premiums, all household and labour surveys available for especially for skilled workers and tradable sector the countries in the region from the early 1990s workers (i.e. agriculture and manufacturing). A to the end of the first decade of the 2000s.41 The reduction of 1 percentage point in the GDP share methodology adopted in the study is a two-stage of imports from the United States increases estimation procedure. In the first stage, the the wages for male workers by approximately authors calculate industry, skill wage premiums 0.95 per cent. A fall in own tariffs by 1 per cent and employment propensities from wage and increases the gender wage gap among skilled employment equations for male and female workers. A 1 per cent reduction in tariffs faced workers separately. Then, in a second stage, they in the United States market increases wages by regress them against trade-related variables to 1.13 per cent. However, trade does not seem to find out how trade openness affects gender gaps have a significant impact on skilled male and in the labour market. female workers in tradable sectors differently.

The first-stage estimation on labour market Overall, the study shows that trade openness participation is carried out using a multinomial has both equalizing and disequalizing effects on logit model. The labour market participation the gender wage gap for the countries covered decisions included in the model are unemployed/ in Central America. Trade openness as measured inactive, informal in agriculture, formal in by import shares and tariffs faced in the United agriculture, informal in manufacturing, formal in States has an equalizing effect on the gender manufacturing, informal in services, and formal wage gap. In contrast, trade openness measured in services. The first-stage earning regression is by own tariffs (imposed against United States based on a Mincerian-type wage equation that imports) is likely to worsen the gender wage gap. estimates the impact of including age, skill level, Hence, trade liberalization of own tariffs may firm size, sector of activity, and interaction of skill induce an increase in the gender wage gap if not and sector on the logarithm of monthly labour matched by reciprocal reductions in tariffs faced earnings in the principal occupation. in the United States market.

43 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 44 productivity thanhisorhergender. Hence, one worker’s a about more care would firms as gap, openness wouldleadtoafall in thegenderwage bytrade about international competitionbrought discrimination (Becker, 1971), isexpectedthat it Following Becker’s theory on the economics of gap between wage maquila andnon-maquilasectorworkers. gender the the shows in term difference interaction the Specifically, the operatemaquila sectorthat throughgender. of effects wage the capture to introduced measuresis gender andmaquilaemployment wage premium. Aninteraction termbetween gender wage premium, and the maquila characteristics, personal of function a as defined estimated usingawage equation. Wages are The wage implicationsofthemaquilaboomare expected toleadanincreaseinrelativewages. demand, especiallyforfemalelabour, andis the maquila sector leads to an increase in labour and strongmaquilaexpansion. The expansionof reduction tariff significant both to corresponds Survey for 1991, 1995, 2001 and 2006. This period Honduras ContinuousMulti-PurposeHousehold The studyusesindividual-leveldatafromthe Data andmethodology of maquilaemployment. Honduras. alsoexamines the wage It implications integration inexplainingpovertyreduction women gainfromincreasedinternationaltrade analyse therole of improved opportunities that ofthesedevelopments,light thisstudyaimsto ofamaquilaindustry.to theestablishment In Initiative). These developmentsallcontributed the UnitedStatesunderCaribbean Basin (e.g. unilateral trade preferencesconcededby access duetoexternalshiftsintrade regimes export- friendly taxincentives, introduced andsawincreasedmarket protection, tariff reduced changes intrade policy. Honduras greatly relatively loweconomicgrowth, withimportant occurred duringaperiodofunstable and in 1991to47.5 in2006. per cent This reduction markets. The povertyrate fellfrom61.5 percent along reduction with increasedintegration withinternational poverty significant seen has Honduras isasmalllow-income economythat Objective andbackground A.3.2.

Wage Gaps, andPoverty inHonduras” and OscarNúñez (2012): “Exports, Gender Rafael E. DeHoyos, Bussolo, Maurizio poverty incidenceamongmaquila workers. total householdincomeandtherelativelylower due tothelimitedshareofmaquilawages in expansion arerather small, whichismainly maquila of effects poverty the Overall, creation. maquilas, and 1 percentageto employment point tothewagepoint premiumreceivedbywomenin premium ofmaquilaworkers, 0.1 ofapercentage decrease inpovertyisattributable tothewage this of point percentage a of 0.35 that finds also poverty Honduras exist. It ifthemaquilasector didnot that finds would havebeen1.5percentage pointshigherin exercise simulation The gender-equalizing inHonduras. effect maquila sector; hencethemaquilaboomhada than thegapobservedinindustriesoutside wage gapis16.6percentage pointssmaller than non-maquilafemaleworkers. The gender more male non-maquilaworkersand38 percent morethan maquila workersearn9.5 percent Controlling forobservable characteristics, female time-varying effectsinthemodel. ofthemaquilaboom,as aresult ascaptured by This maquilawage increase premiumdidnot 31 workers earnaconditionalwage premiumof occupation andurban/rural residence. Maquila of industry experience, education, in differences men in Honduras, controlling for the influence of women wage lessthan earnersearn27 percent According to the findings of the empirical analysis, Findings in themaquilasector. changes income of effect poverty short-term the Through thesecounterfactuals, theyillustrate have beenifallmaquilajobswereeliminated. would payawage it not premiumandwhat would havebeenifthemaquilaindustrydid thepovertyratiosimulate what inHonduras hypothetical householdpercapitaincome. They boom, of adistribution theauthorsconstruct maquila the of effects poverty the examine To gender, maquilaandinteractive effects. introduces yeardummiesaswelltime-varying employed outsidethemaquilasector. The model wages compared to the control group of men the interactive termareinterpretedasshiftsin international the genderpremium, themaquilapremiumand to high due competition. Intheestimatedwage equation, firms maquila in the gender wagewould expect gapto be smaller e cn oe wres n o-aul firms. non-maquila in workers over cent per Trade and Gender Linkages: An Analysis of Central America 4d REFERENCES

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The teaching manual is comprised of Volume 1 (Unfolding the Links) (UNCTAD, 2014a) and Volume 2 (Empirical Analysis of the Trade and Gender Links) (UNCTAD, module 2014b). 2 Belize is not included in this module, even though it is geographically part of the Central America region. This is mainly because the country has a very small population and economy compared to the rest of Central America. Throughout the module, the terms, “Central America,” “Central America region” and “Central American countries” refer to the six countries covered in this study. 3 The General Treaty on Central American Economic Integration was ratified on 5, 8 and 26 May 1961 by Guatemala, El Salvador and Nicaragua, respectively; on 27 April 1962 by Honduras; and on 23 September 1963 by Costa Rica. The implementation period ended in 1965. See the WTO Regional Trade Agreement Information System, available at http://rtais.wto.org/UserGuide/RTAIS_USER_GUIDE_EN.html. 4 Belize became a full member of SICA in 1998; the Dominican Republic first became an associate member in 2004 and then a full member in 2013. Mexico, Chile and Brazil are regional observers, and China, Spain, Germany and Japan are extra-regional observers. 5 DR-CAFTA entered into force on 1 January 2009 for Costa Rica, on 1 March 2007 for the Dominican Republic, on 1 July 2006 for Guatemala, on 1 April 2006 for Honduras and Nicaragua, and on 1 March 2006 for El Salvador and the United States. 6 Exports of consumer and industrial goods by the United States enjoyed immediate duty-free access to CAFTA-DR markets, while tariffs on nearly all United States agricultural products were scheduled to be phased out by 2020 as long as they meet the relevant rules of origin. 7 See the World Trade Organization Regional Trade Agreement Information System (WTO RTA) for country trade profiles (http://rtais.wto.org/UI/ publicPreDefRepByCountry.aspx). 8 This classification is based on the World Bank’s Country Classification by Income (accessed on 10 March 2020). According to the World Bank’s calculations for 2018 using the World Bank Atlas method, high-income countries have a GNI per capita of US$12,376 or more; upper-middle-income countries have a GNI per capita between US$3,996 and US$12,375; and lower-middle income countries have a GNI per capita between US$1,026 and US$3,995. 9 The Gini coefficient is the most commonly used indicator of income inequality. It measures the extent to which income distribution among individuals or households in an economy deviates from a perfectly equitable distribution. A Gini index of 0 denotes perfect equality (i.e. everyone has the same level of income), while an index of 100 implies perfect inequality (i.e. one person has all the income). Hence the closer the index number is to 100, the higher the degree of inequality. 10 The poverty headcount ratio shows the share of population living below US$3.20 a day (in 2011 purchasing power parity). 11 Based on the HDI country ranking for 2018. This composite measure of development is the geometric mean of three sub-indices relating to health, knowledge and living standards. The first is measured by life expectancy at birth; the second by expected years of schooling and mean years of schooling; and the third by GNI per capita (UNDP, 2019). 12 Data are from World Bank’s World Development Indicators database (accessed on 18 May 2020). 13 Manufacturing statistics are based on data from the UNCTADStat database (accessed on 24 June 2020). 14 The GII measures gender inequalities in the areas of reproductive health (measured by the maternal mortality ratio and adolescent birth rates); empowerment (measured by the proportion of parliamentary seats occupied by women and the proportion of adult women and men ages 25 and older with at least some secondary education); and economic status (measured by the labour force participation rate of female and male populations ages 15 and older). The closer the GII is to zero, the higher the degree of gender equality. 15 Exceptions are Guatemala and Honduras, where youth not in education or the labour force mainly live in rural areas. 16 Employment figures are based on household survey data, so they therefore cover both formal and informal employment. 17 In LAC, on average, the shares of services in total female and male employment were 80 percent and 54 percent, respectively, in 2017. 18 The agricultural holder is the civil or juridical person who makes the major decisions regarding resource use and exercises management control over the agricultural holding. 19 Land ownership and use figures are from the Food and Agriculture Organization’s Gender and Land Rights database (accessed on 10 March 2020). The same ratio was 11.5 percent in El Salvador in 2007 and 7.8 percent in Guatemala in 2003. 20 The LAC average was 32 percent in 2019. 21 Costa Rica ratified the CEDAW on 4 April 1986, El Salvador on 19 August 1981, Guatemala on 12 August 1982, Honduras on 3 March 1983, Nicaragua on 27 October 1981, and Panama on 29 October 1981. 22 Article 29, paragraph 1 states the following: “Any dispute between two or more States Parties concerning the interpretation 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 https://www.ohchr.org/en/professionalinterest/pages/cedaw.aspx. 23 The United Nations General Assembly adopted a 21-article Optional Protocol to the CEDAW on 6 October 1999. El Salvador signed the Optional Protocol on 4 April 2001, Costa Rica ratified it on 20 September 2001, Guatemala ratified it on 9 May 2002, and Panama ratified it on 9 May 2001. By ratifying the Optional Protocol, a state recognizes the competence of CEDAW to receive and consider complaints from individuals or groups within its jurisdiction through the communications procedure and the inquiry procedure. 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 https://www.ohchr.org/ Documents/HRBodies/CEDAW/OP_CEDAW_en.pdf. 24 See COMMCA (2018) for detailed information on country-specific developments on gender equality. 25 Mobility examines whether or not women are treated on par with men while applying for a passport, travelling outside the country and home, and choosing where to live. Workplace refers to whether or not a woman can get a job in the same way as a man, the presence of the law mandating non-discrimination based on gender in employment, legislation on sexual harassment in employment, and criminal penalties or civil remedies for sexual harassment in employment. Pay is related to whether or not there is equal remuneration for work of equal value and equal working rights (i.e. same night hours, same jobs deemed hazardous, arduous or morally inappropriate, same industries). Marriage is about civil marital rights such as not being legally required to obey one’s husband, being able to become head of the household/family, being able to obtain a judgment of divorce, having the same rights to remarry, and the presence of domestic violence legislation. Parenthood concerns the availability of paid leave of at least 14 weeks for women, the full government coverage of benefits, the availability of paternity and parental leave, and the prohibition of dismissal of pregnant women. Entrepreneurship is based on the ability of a woman to legally sign a contract, register a business, and open a bank account in the same way as a man, as well as on the prohibition of discrimination by creditors on the basis of sex or gender. Assets is related to equal ownership rights of married men and women, equal inheritance rights of sons and daughters and of female and male

49 4 module d Trade andGenderLinkages: AnAnalysisofCentral America 50 27 26 41 40 39 38 37 36 35 34 33 32 31 30 29 28

National onMeasurement HouseholdSurvey ofLivingfor Nicaragua (1998, 2001, 2005). Dominican Republic (1997, 2000–2007); and Incomethe Employment for Survey Guatemala (2000, 2002–2006);the and SalvadorEl (1998, 2000–2007), andHonduras (1997, 1999, 2001, 2003);the Continuous National Labour Force for Survey the Specifically, the datasourcesthe include Continuous HouseholdSurvey Multi-Purpose for Costa Rica(1997, 2000–2007), on improving the position of women in the coffeeon improvingthe positionofwomenin value chainbyrecognizingtheir role incoffee production. quality, social, health andsafety, environmental andeconomic aspects.those standards, Unlike however, focuses explicitly it CaféThe deMujercode draws onexistingstandards includingFairtrade International (FLO), of terms OrganicandUtzin Honduras (WTO, 2016c), Nicaragua (WTO, 2013)andPanama (WTO, 2014). those byCosta government include reports Rica(WTO,the latest 2019), Salvador El (WTO, 2016a), Guatemala (WTO, 2016b), bycountryreports are available https://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm#bycountry. at The TPRMtrade periodically reviewsthe andpractices policies ofeach WTO member. The WTO reviews andgovernment farmsthan 20hectares) (more andindicators, applyingcriteria while andsalariesto women. are paiddirectly targeting highilliteracy amongwomen.those withlarger ismadebetweenwomenwithsmall plots oflandand Adistinction the coffeefocus and landmanagement ondeveloping andknowledge about women’s skills production process, ason aswell the coffee ormanagersof beowners they workon. womenmust the indicators that farm of that is mainprinciple Most The An overview ofBussman(2009)isprovided in Volume ofUNCTAD’s II tradeteaching manual on andgender. and Singapore. ofdeveloping category The economies inAsiaisbroad, including, amongothercountries, China, India,the Republic ofKorea, two countries, the relative total isquitelow. thissector employment for significanceof Panamathe countries.the remainder compared of to the feminization Hence even these if to be very high in of labour seems the sharetotal apparel ofwearing manufacturing isquitesmall in inCosta employment that shouldbenoted Ricaand It activity. multipliereffecttourism refers andinducedeconomic The effectsto indirect (i.e. secondary effects) tourism stemmingfrom thelowerneed wages) to for insurance). alowerlikelihood ofgettingsocial benefits(due security but However,to participate, for those whodecide remittance-receiving workers hadhigherreservation wages (i.e. received higher their competitors share. andgainmarket to outperform strategies reduction andprice-cutting cost suchasunit of absolute orcompetitive advantage, countries costs compete (rather onabsolute unit than relative costs) andusedifferent Accordingly,the goodsand/or acountry exports canproducearelatively it at lowercost. services the principle Accordingto As explainedin Module 1, ofcomparativethe principle advantage countriesthat compete onrelative suggests costs. unit care credits for ofchildcare. periods benefits,and partial themandatory retirement theequality of age, the provides and availability pension that explicit ofalaw valuation contributions. ofnon-monetary whichmenandwomencanretirethe equality Pension ofagesat withfull looks at spouses,surviving equal administrative over authority marriage, assetsduring the availability and ofalaw providing forthe because EPZstraditionallyto concentrate tend hirethat women). insectors from thegendereffects this todisentangle ofsectoral isdifficult It composition ofEPZs (i.e. womenare employedmore they did not know or did not wantto answer. knowordidnot they didnot union representative,” “Yes, “Yes, considered quitting,” nearly caused a strike,” or “Yes, causedastrike.” couldthat They also say harassment concern: “Yes, withco-workers,” discussed “Yes, ormanager,” withsupervisor discussed “Yes,trade with discussed “No”or“Yes.”option ofanswering the answerwas If “Yes,”their sexualtaken of asaresult then choseanumberofactions they Specifically,ILO the workers survey in were asked, “Issexual harassment a concern for workers in your factory?” the They had of landorindustrial plants, etc.), orwater. suchaselectricity inpublicutilities andsubsidisedprices more developed infrastructure specific for production, transportation (e.g. logisticsand better roads,free orsubsidized lease incentives streamlined includespecific government (e.g. services custom services, business registration, etc.), provision of controls, and derogation of labour laws of sections specific such as working hours or minimum wages. Infrastructure value-addedtaxes. Regulatory exemptions canincludeexemptions from foreign exchange controls, profit repatriation Taxtaxes, exemptions includeexemptions fromtaxes export oninputs, import taxes, profitandproperty taxes, direct and not elsewhere specified. not manufactures referto electronic andelectrical, etc. products; andunclassifiedproducts transactionsrefer to commodities and footwear, etc.; medium-technologymanufactures referto automotive, process, products; andengineering high-technology manufactures referto agro-based and other resource-based products; low-technology manufactures refertextile,to garment, the Lall (2000)classification,Accordingto products primary refer toagriculture andminingproducts; resource-based trade refersThis to policyreviews preparedthe governmentsthe Central by of countries. American ofdivorceobtain ajudgment the sameway in asaman. Salvador,In El Honduras andPanama, haveto remarrythe samerights asmen. womendonot InGuatemala, awomancannot Asof26July2020,

ISBN: 978-92-1-112996-0 [email protected] http://unctad.org/gender Layout and Printing at United Nations, Geneva 2011520 (E) – November 2020 – 986 UNCTAD/DITC/2020/2