Memorandum submitted by One World Action
SEPTEMBER 2007
1. One World Action welcomes the House of
Commons' International Development Committee's initiative and
is keen to submit evidence on two particular points raised by
the Committee: trade policy decision-making and the direction
of trade policy.
2. One World Action considers trade a key
route out of poverty for developing countries—certain conditions
being met—and therefore welcomes the government's recent
decision to restructure its machinery and to make trade a joint
responsibility of the Department of Business, Enterprise and Regulatory
Reform (DBERR) and of the Department for International Development,
with a single minister shared by the two departments.
3. This is of considerable importance in
the context of the current negotiations of the Economic Partnership
Agreements; of the drafting of the Joint European Union-Africa
Strategy and of the current Doha Round WTO negotiations.
4. EPAs are due to replace existing trade
arrangements between the European Union (EU) and African Caribbean
Pacific countries (ACP) that are covered by a World Trade Organisation
(WTO)'s waiver due to expire at the end of 2007. The UK government
is working closely with the European Commission, which is negotiating
these agreements on behalf of the European Union (EU), other EU
member states and ACP countries to ensure that these agreements
are development-focused and designed, so that EPAs, once adopted,
can deliver long-term development, sustainable economic growth
and poverty reduction.
A) GENDER EQUALITY
AND EQUITY
5. One example of the importance of DFID's
policy, research and practice for trade is its work on gender
equality. This is a good example of why better cross-departmental
working on trade is necessary.
6. Gender equality is a MDG in its own right
and has a vital role to play in the achievement of the rest of
the Millennium Development Goals which include the development
of a just and open trading and financial system with a commitment
to good governance, development and poverty elimination nationally
and internationally. There is increasing evidence of the link
between progress on gender equality and progress on all other
development objectives. But our research has shown insufficient
application of gender policy commitments throughout all trade
and development policies.
7. In the area of employment and wages,
our research has shown that removing tariffs can affect women's
employment and income in two key ways. If women are consumers,
then they can benefit from cheaper goods, but if they are producers,
then they are likely to face competition and possibly loss of
employment and income. From a poverty reduction point of view,
it is important to ensure that women on low incomes are not negatively
affected by EU imported goods. More research is therefore needed
to identify which items should be liberalised in which country
because women are more consumers than producers of these products,
and which items should be protected because women are more producers
than consumers. These issues need to be carefully balanced in
EPA negotiations.
8. For example, where women are mainly employed
in export production, such as cut flowers in Zambia, our research
has shown that core labour standards and decent work are often
neglected; women are concentrating in low paid, low status and
precarious jobs. The growth and expansion of the sector seems
to depend on the exploitation of cheap women's labour implicitly
considered as a "comparative advantage" in international
trade. An EPA should provide an opportunity to deliver better
working conditions for women.
9. Therefore, promoting and protecting core
labour standards should be central to an EPA and the DBERR and
DFID joint Parliamentary Under Secretary has a central role to
play in the negotiations of the EPAs—based upon DFID's own
work in this area, and international commitments such as the Beijing
Declaration and Platform for Action and the Convention on the
Elimination of All Forms of Discrimination Against Women (CEDAW)—to
influence other EU members states and the European Commission
to take these issues into account. The same is true in the UK
bilateral relationships with developing countries in Asia or South
America.
10. In the area of trade related assistance,
the gendered division of labour and the inequalities accompanying
this mean that women are unable to fully participate in trade.
The case studies we developed have shown that an EPA could increase
the workload of poor women without enabling them to share the
benefits resulting from growth in industries. It is therefore
important that measures are taken to ensure trade related assistance
reaches women in order to increase their productive capacities.
11. As far as tariffs and revenue are concerned,
our research has shown that some potential revenue loss arising
from trade tariffs, such as those engendered by EPAs, might occur
and affect the delivery of public services in countries. ACP countries
may indeed have to impose domestic taxes on goods and services—in
the form of direct tax on income or through indirect tax such
as value added tax—or to cut public spending to remedy to
this revenue loss, which would negatively affect the quality and
quantity of crucial services in health and education at a time
when ACP countries are struggling to combat HIV/AIDS, illiteracy
and food insecurity. It is now DBERR and DFID's joint responsibility
to convey the message internationally that tax is not neutral
and to promote measures that ensure that women are not disproportionately
affected by taxation policy.
12. In the area of adjustment costs and
supply side capacity, and in order to achieve real development-focused
trade agreements (especially EPAs), additional resources must
be allocated to support infrastructure development, technical
assistance, investment and market access in ACP countries. From
the point of view of eliminating gender disparities, the new DBERR
must support programmes of assistance targeted to women in order
to enable them to increase their productive capacity.
13. DFID and DBERR's joint Parliamentary
Under-Secretary of State for Trade and Consumer Affairs (within
DBERR) and for International Development with responsibility for
Asia, Europe, Latin America, the Caribbean and Overseas Dependent
Territories (within DFID) whose portfolio includes trade policy,
must, in EU/ ACP regular negotiations, convince his European partners
to provide additional support to enhance the supply-side capacity
of ACP countries that must be made available through an EPA, as
it represents a key barrier to free trade. In particular, women's
lack of access to productive resources including land, labour,
inputs and technology, as well as support services, such as credit,
extension and research, must be addressed in order to enable them
to become more productive and competitive. Supply-side capacity-building
is one important way in which this could be done.
14. Collecting disaggregated data is crucial
in this context, as this would allow policy-makers to get pertinent
statistics on women's economic activities, which are of fundamental
importance to understanding the impact of trade liberalisation
on livelihoods and employment in developing countries. Government
and statistical offices should be supported and encouraged to
compile basic data such as employment figures for sectors which
are particularly vulnerable to trade. Statistical tables providing
information jointly on export intensity, import penetration and
female intensity for each sector should become part of the standard
set of basis statistics regularly issued. DFID has a key role
to play in assisting developing countries to gather these disaggregated
data, which could then be combined with data secured by DBERR
on export intensity or import penetration for each country within
each sector.
15. DFID has already got strengths in gender
equality work and an independent evaluation of its work on gender
equality in August 2006 by the peer review of UK development assistance
by the OECD Development Assistance Committee has shown that the
DFID's work on education and health had had good results; that
DFID had played an important role in international discussions
on gender equality; that its funded-research had had a worldwide
influence and that it had developed significant partnerships on
gender equality at national and international levels. But if the
commitment at policy and strategy level has been strong, there
has been a failure to fully and consistently translate that commitment
into actions that make a difference on the ground.
16. One World Action is hoping that the
recent government restructuring, making trade an area of joint
responsibility between DFID and DBERR, will translate itself into
better understanding of the problems and opportunities for women
and girls in developing countries and into better coordination
to ensure that the impact on gender equality and equity is taken
into account in all trade and development interventions.
17. Given DFID's expertise and recently
restated commitment to promoting gender equality, One World Action
is hoping that DBERR will make the UK position more clear on this
matter. We hope that DFID and DBERR will use their combined influence
to encourage international donor partners and the EU Commissioner
for Trade to give far greater priority—in their words and
in their actions—to ensuring trade agreements support and
not undermine progress towards gender equality. Where organisations
like the African Union and SADC have made strong commitments on
gender equality, the UK should assist by supporting comprehensive
and consistent implementation.
B) POLICY COHERENCE
18. Policy coherence, defined by the DAC
Poverty Guidelines as "the systematic promotion of mutually
reinforcing policies across government departments and agencies
creating synergies towards achieving the defined objective",
is therefore crucial to achieving sustainable development. Better
coherence between DFID and DBERR's objectives and work will therefore
be crucial in achieving better cross-departmental working on development
and trade.
19. The EU and the UK are committed to ensuring
coherence in their external actions with third countries, which
include better coherence and consistency between policy and practice
on development co-operation and trade. One World Action would
like to see these policies fully implemented and monitored, as
policy coherence is of fundamental importance to achieving sustainable
and equitable development and to transparent and accountable governance.
The lack of policy coherence in external actions, between development
co-operation objectives and objectives in the areas of trade,
common foreign and security, agriculture, fisheries, migration,
environment, undermines progress towards sustainable and equitable
development including transparent and accountable governance.
Furthermore, low policy coherence jeopardises progress towards
achieving the Millennium Development Goals.
20. As recognised by DBERR on its website,
trade liberalisation does not automatically imply higher growth.
It will have little benefit if the domestic policy environment
is inadequate. Weak economies need to build simultaneously the
institutional and human infrastructure to take advantage of trade
opportunities. Hence there is a need for a coherent approach amongst
the international organisations, but also amongst DBERR and DFID
to best enable them to do just that. The UK government's position
is that trade openness can have beneficial impacts on productivity,
and use of new technologies and investment.
21. The joint responsibility for trade between
DFID and DBERR is therefore a step in the right direction, but
effective cross-departmental work necessitates the elaboration
of a common DFID/DBERR cross-departmental position on sustainable
and equitable development and trade justice, especially in the
design of the EPAs and in the DOHA round negotiations. Regular
meetings between the EU divisions of both departments are therefore
crucial. Similarly, DFID's priorities and concerns should be promoted
by the DBERR's European and World Trade Directorate officials
and the Parliamentary Under Secretary of State responsible for
trade policy in their discussions with partners in government
and at the EU level—possibly during the Article 133 Committee
meetings on trade—colleagues in the United Nations and other
donor governments.
22. DFID officials should ensure that DBERR's
trade policy section officials (European and World Trade Directorate
EWT) take into consideration the MDGs when preparing the weekly
"Article 133 Committee" meetings—during which
the UK and its European partners meet to coordinate their positions
on trade related issues, before that position is defended by the
European Commissioner for Trade at international trade negotiations,
including those of the DOHA round.
23. As far as the DOHA round negotiations
are concerned, deeper cuts in EU and US spending on agriculture;
tariff reduction offers, reduced pressure on developing countries
to liberalise some sectors or services and fewer sensitive products
for Europe are all needed to ensure that poverty reduction is
achieved. Trade alone cannot be the answer, and DFID/DBERR's better
coordination is therefore a step in the right direction to ensure
that trade and development are successfully combined and benefit
the poorest countries of the world. As the UN's 2005 Human Development
Report in its chapter on trade and development stated, "good
trade rules will not resolve many of the most pressing problems
facing developing countries, but good rules can help. And bad
rules can inflict serious damage".
24. An effective "aid-for-trade"
package as part of the DOHA round final agreement is also crucial
to enable developing countries to gain maximum benefits from the
deal. In 2005 the UK government announced that the UK would treble
its contributions to "aid-for-trade" to £100 million
a year by 2010. As part of this, an aid package of £37.8
million was announced in April 2007 for technical assistance over
the next five years to help the 40 poorest countries to develop
trade capacity. Joint scrutiny of the use of this money is highly
needed.
25. Better cross-departmental work on trade
between DFID and DBERR officials, in the form of policy coherence,
joined-up initiatives, information sharing and exchange of best
practice, is therefore welcome in order to avoid duplication or
overlap, and in order to fulfil the promises made in 2000 to halve
world poverty by 2015.
C) GOVERNANCE
26. Another example of the importance of
DFID's policy and practice for trade and for DBERR is its work
on governance. This is also a good example of why better cross-departmental
working is necessary to achieve trade justice.
27. Since the early 1990s, DFID has supported
programmes in various areas of governance. It published a White
Paper, "Making governance work for the poor" in July
2006, which set out DFID's priorities and explained how it will
work with the rest of UK Government, partner governments, international
organisations, non-governmental organisations (NGOs), academics
and the private sector to fulfil the promises made in 2005 to
reduce significantly world poverty. This paper clearly set out
DFID's ambition to put governance at the centre of its work—focusing
on building states that are capable, responsive and accountable
to their citizens and on tackling corruption internationally.
28. The UK Government and the European Union
have developed strong policies on governance and development.
Their thinking has evolved to looking at good governance in a
more comprehensive manner, including stressing the importance
of citizen-state accountability and engaging with the most socially
excluded women and men. They acknowledge clear linkages between
good governance, respect for human rights and non-discrimination.
29. One World Action believes that governance—respect
for human rights, rule of law, transparency, accountability, responsiveness—should
be mainstreamed in all external interventions and policies, not
least in development and trade. It is therefore important that
DBERR officials ensure that trade agreements support, and not
undermine, progress on governance issues such as support for democratisation,
reinforcement of the rule of law and access to justice, public
sector capacity-building, or enhancement of the role of civil
society. DBERR officials should for example ensure that trade
agreements support, rather than undermine, progress towards legitimate
governance, the promotion and protection of human rights, the
enhancement of the role of civil society, decentralisation and
local government reform.
30. One World Action also believes that
support for democratisation, as put forward by DFID, should imply
a strong UK support in the trade negotiations, not least on the
EPAs, for national parliaments' scrutiny and involvement, both
in European countries and African countries.
Conclusion
31. DFID provides support to strengthen
trade policymaking processes in the ACP countries. Its track record
of policy, research and interventions in the area of trade and
its openness to discussions with civil society partners bring
an important perspective to DBERR thinking. Shared knowledge and
expertise between DFID and DBERR civil servants will therefore
be crucial in better cross-departmental working on development
and trade.
32. DBERR's trade policy section (European
and World Trade Directorate EWT) works with a variety of partners
and institutions both in the UK and worldwide to "promote
a vision of open and competitive markets and a world trading system
that is fair as well as free", while DFID states that "many
different things can contribute to development which reduces poverty,
such as settling conflicts, increasing trade, securing more and
better aid, and improving health and education". Both visions
are complementary and require a better coordinated approach between
both departments in the context of the current major international
trade negotiations.
33. Gender equality is one of the key cross
cutting issues and should be mainstreamed throughout development
and trade policy discussions. If trade and aid are twin pillars
of the UK and the EU development policies, then the need for coherence
between gender equality objectives and aid and trade policy objectives—and
coherence between trade policies that exacerbate inequality and
development polices that aim to reduce inequality—need to
be better highlighted and promoted.
34. Better coordination and shared knowledge
are needed between the two departments to promote legitimate governance
and gender equality and equity, and to assess with the private
sector and with civil society the relationship between gender
equality and economic growth.
35. A joint strategy/action plan should
be designed to set out how both department can better use their
partnerships, money and staff to make a lasting difference to
the trade and development agenda and in particular gender equity
and equality, legitimate governance and trade justice.
36. DFID rightly emphasised that having
women in senior positions mattered in fulfilling this agenda;
and that leadership was needed. Gender Equality Champions were
appointed in its most senior positions and right across DFID,
to challenge DFID and help DFID make the biggest difference possible.
They meet every six months and report on successes and obstacles.
Similar Gender Equality Champions must be appointed within DBERR
so that all gender policies and practice are consistently applied
throughout all trade and development policies to ensure policy
coherence. Specific steps must be taken to ensure that women have
equal access to markets, subsidies, resources, credit and training
aimed at mitigating the negative impacts of trade liberalisation.
37. Through the review of the International
Development Committee of cross-departmental working on development
and trade, the British government has a timely opportunity to
critically assess its own practices and role in the current international
trade negotiations (Doha Round and EPAs) and to develop a more
coherent development-focused gender-mainstreaming strategy in
trade policy.
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