Panel 3: Challenging Europe’s austerity politics and trade regimes from a feminist and development perspective

Mariama Williams, Senior Programme Officer at the South Centre (moderator)
Tessa Khan, international human rights lawyer, director of the Climate Litigation Network (speaker)
Susan Himmelweit, emeritus professor and feminist economist (Speaker)

Listen the panel discussion:

Introduction: 

Williams
The session will look at EU trade policies and their impact in Europe and beyond. This is in the context of European austerity politics and the shift towards a neoliberal approach, the latter of which occurred from the 1990s, pre-dating the recent global financial crisis.

Austerity came about after the financial crisis. Europe saw a dramatic turn, with fiscal austerity seen as something that would not undermine growth but rather stimulate it, although this has not proven the case. The EU approach has seen the cutting of spending, impacting public and social services. It has been implemented in a dogmatic fashion and failed to facilitate growth. Post-crisis we have seen effects such as a weakening of trade unions and the dismantling of the welfare state. The impact has been seen most strongly in Greece, Italy, Portugal and Spain. The model used in these countries is trending to the rest of Europe and if the austerity path continues we are likely to see similar dynamics to those that occurred in these countries.

We need to realise that at the moment Europe still has strong safety nets relative to the rest of the world. We need to safeguard this as much as possible.

The Italian PM has said that if we continue with austerity it will lead to a depression across the rest of Europe. In Italy, Portugal, Spain and Greece there is, to an extent, a push back against austerity, were they have been trying to increase spending to stimulate growth.

Austerity has also had a spillover effect on developing countries, although not as much at it might once have had. This is because China, at least at first, continued spending in developing countries. For a while, there was the idea that developing countries decoupled from Europe – although it was ultimately proved that this was not actually the case, as seen from trade shocks. There has been the creeping devaluation of European currencies, which has impacted developing countries.

Himmelweit

Himmelweit is a member of the UK women’s budget group, something which is completely independent from government.

The group analyses the gender implications of financial policy in order to encourage governments to recognize this and influence policy. Since austerity, the group has been extremely critical of the lack of understanding of the gendered effects of policy. In terms of visibly, austerity has been quite good for the group as it led to increased awareness of gender equality issues in budgeting. However, while initially the gender impacts highlighted by the group were seen as quite shocking and made headlines, now the impact of austerity on women seems to be taken for granted. The impact on women is not necessarily seen as important to consider, despite increased awareness.

The talk will focus on the gendered effects of various stages of austerity and not just its impact on women but gendered relations themselves.

To begin, there is a lack of consideration regarding the impact of policy on gender in Europe. With regards to the current financial crisis, the recession first hit men’s jobs such as manufacturing, construction and the financial sector. In this instance, women were protected to begin from gender segregation in employment. However, austerity has since had a greater impact on women than men.

Up until 2012, in the wake of austerity measures, women were no longer leaving their jobs so that men could take them up, as in previous times. In this case, women were no longer behaving as a ‘reserve army,’ losing their jobs to give space to men. There has been an increase in women’s unpaid work since the recession, due in parts to cuts to public services and a fall in public expenditure. Men are now having to accept jobs that once would only be acceptable for women. There has been a decrease in maternity rights and benefits in some countries and a huge rise in pregnancy discrimination in the UK as well as other EU countries.

Some people call this current stage ‘recovery,’ but while there may be more jobs these are poorer quality jobs, often on non-standard contracts e.g. zero hours contracts, something that was unthinkable 20 years ago. In this example, workers have to be on-call, while their employer has no responsibility.

How does this affects gender gaps? Indicators are worsening for both women and men. Markers of progress, such as decreasing gender pay gaps, have slowed down.

Why do we have gendered effects of austerity? This is largely due to cuts to public services, social benefits and pensions, which women make most use of for themselves and their families. Public services have paid an important role in reducing reliance on women’s unpaid labour and supporting women’s entry into the labour market.  For instance, women are more likely to get out of work benefits, due to child care responsibilities and higher levels of unemployment. More likely to get in work benefits because of low wages, comparatively to men.

A further explanation for the gendered effects of austerity is that women are more likely than men to be employed in the public sector, something that is true in every single European country. In every country we have seen cuts and/or privatization. Privatisation leads to a greater gender pay gap, as the gap is wider in the private sector. The private sector is often said to be more efficient than the public sector, yet this is because it can impose strict rules on workers. Private sector jobs are replacing those in the public sector, and these roles are going predominantly to men.

There are a few examples where countries or regions have tried specifically to moderate the impact of the financial crisis on gender inequality such as in Iceland and Andalusia in Spain. In the case of the latter, despite being a poor region it has tried to include a gender approach in its policies.

We have also seen that gender equality has fallen as a national priority; it is now seen as something we can no longer afford, although this is slowly returning. Further, despite gender mainstreaming being well written into EU’s rules the UK economic recovery plan made no mention of ‘women,’ ‘gender’ and ‘equality.’ Funding to gender equality machinery has also been heavily reduced in many countries. As far as stimulus measures to reduce unemployment, this is still based heavily on infrastructure.

Now, the UK women’s budget group has introduced their own plan for a fiscal strategy, which they call ‘plan B.’ This considers projected effects due to cuts in public spending as well as changes in taxes and benefits on households by gender. For example, regarding people without children, single people are more greatly impacted than couples, and single women more than single men. Regarding those with children, female lone parents have been proven to be hit the most. These figures are to do, in part, with cuts to public services and cuts to benefits.

Why has this been going on and how can a feminist analysis inform this? Austerity is an approach that targets the norms of social reproduction. The crisis has been used to intensity a process that was going on before, with cuts in social wages and the rise in privatization. Since the 1980s, with the rise of globalized finance we have seen losing interest in social reproduction. European welfare states were based on the interests of national capital and the social growth of its population. With the coming of the globalized financial system, countries are no longer as dependent on social reproduction. This is because financial capital is no longer dependent on the conditions of social reproduction in any particular country. We have seen a process of individualization, making families responsible for own reproduction, evident in forms of saving and insurance in the frame of finance capital rather than social welfare. The phrase never let a good crisis go to waste’ comes to mind, as we have seen with the further roll back of welfare state and privatisation.

Despite this, it’s important to reflect on the positive role of UK Women’s Budget group. It highlights the value of feminist fiscal and economic strategy, based on significant investment on social infrastructure. This should include significant public spending on social infrastructure such as in health and education. The approach should stimulate employment and, drawing on feminist economics, build social and human capital. The approach should spend money now for benefits in the future – that’s what investment truly means. A study by the UK Women’s Budget shows the value of investing in care rather than infrastructure, in terms of stimulating the economy and from a gender perspective. The question is: how can we argue for this approach?

At the present, we see the continuation of previous policies based on the interests of finance capital and not on people. We are not going to get change from our governments in the current situation as they are too controlled by financial capital. This is an uphill struggle. So far the right have continued to be more effective in mobilizing discontent. Now, we need to engage with norms of social reproduction and look for ways to gain popular support for this alternative approach.

Khan

The talk looks at EU trade laws and the impact on women in the Global South. It will highlight two key points: the way of impact of such policies are clearly gendered and the disconnect between the EU’s formal stance on gender equality and the paradigm of trade and investment liberalization it promotes outside of Europe.

The EU is perceived globally as a champion on gender equality, often at the front of efforts to forward women’s rights e.g. pushing for gender mainstreaming in SDGs. However, when it comes to its policies beyond Europe there is little appetite to encourage women’s human right, particularly in the Global South. The EU’s current priority is deep and comprehensive free trade agreements. This includes low levels of tariffs around the world to promote things such as investment and competition policies; intellectual property provisions; and the expansion of trade of services.

It is important to reflect on the impact of such policies on liberalized trade and services on women as workers, consumers and traders. The EU is aggressively pushing for the Trade in Services Agreement (TiSA), which would account for two thirds of global trade and services. There is the notion that provision of essential services should be efficient or profitable, yet this is arguably at odds with the human rights obligations of governments to ensure equal access to services e.g. in healthcare and water and sanitation. The agreement would ensure the liberalization in all the sectors, with a baseline level of liberalization which governments would not be able to go below.

This would have a significant impact on women. For example, the introduction of user fees for accessing services would deter women in developing countries from accessing essential services. As services are cut in the name of economic efficiency women have to fill gaps in provision e.g. take on increased burden of work in their households. This further precludes women from exercising other human rights, and further entrenches cycles of poverty.

EU countries are now, ironically, moving back to state run programmes as a response to the failure of private initiatives. For example, in France at least 15 municipalities have terminated private water management contracts or not renewed them. It is hard to reconcile an acknowledgment of the inequalities produced by privatisation and liberalization with the fact that the EU is pushing such policies so aggressively in developing countries. Further, TiSA would require the deep deregulation of financial and banking sectors, whereas we know how dangerous this is, especially for women and their human rights. This would prevent governments from regulating in the interests of financial stability, such as policies that encourage productive rather than speculative investment.

Another priority of EU trade agreements is the liberalization of public procurement, which the European Commission has recently identified as an area of significant untapped potential for EU exporters. For example, TTIP has an entire chapter on government procurement. However, procurement policy is a tool often used by governments in developing countries to achieve particular social and economic objectives. Governments can give preference in procurement policies. However, the introduction of EU trade policies would mean that governments face constraints in mitigating the impact of more powerful enterprises. For example, the Kenyan government has marked 30% of its contracts for women, youth and persons with disabilities yet once this is liberalized such policies will no longer be permitted.

The EU is a firm believer that privatisation and trade will lead to an increase in decent work opportunities for women in the Global South in export-orientated industries. However, we know that women are disproportionately represented in labor-intensive, low wage sectors. In the garment industry there is the expectation that wages will rise as productivity rises. However, evidence suggest that actually the competitive advantage on which firms rely is dependent on the lower paw, casualization and informalization, as well as the repression of trade unions. This is despite the fact that trade unions have been shown to increase wages for women and other workers.

Women-owned small and medium enterprises play a key role in developing countries, and yet they face challenge to be competitive in comparison to cheap imported goods. This struggle to be competitive is to do with a range of factors faced by women in developing countries, such as the challenge to access loans, technical and business training and knowledge of the market, further entrenched by both paid and unpaid responsibilities. It has been recognized that international trade favors multinational over SME enterprises, and yet trade liberalization is still positioned as a favorable approach.

The relationship between trade liberalization and social and economic development is far from automatic. In fact, many studies show that trade exacerbates economic inequality, which is why all of today’s developed countries used strong protectionist policies. This has conveniently been forgotten in current trade agreements. Policy space is being squeezed out by trade agreements, which enable investors to challenge regulation put in place by governments. Profoundly unbalanced protection is given to investors compared with the rights of communities and individuals affected by investors.

Global analysis of trade policies, including TTIP, demonstrate that trade policies and liberalization are not beneficial for the lives of everyday people in both the Global South and Global North. There is the view that trade liberalization will lead to greater living standards, for example, allowing women in developing countries to enter the market and raise living standards. However, while the EU can benefit from market protectionism, this isn’t the case for developing countries who are very susceptible to trade liberalization policies, which flood the market with cheap goods, lowering prices and wages. Despite this, rhetoric about trade liberalization pitches it as progressive. The focus is on protecting and strengthening the impact of transnational capital and no longer about growth. We must ask: whose interests are being promoted and at whose expense?

The dispute settlement system, which is part of TTIP, allows corporate investors to sue governments in quasi-judicial tribunals, staff by judges with questionable impartiality and independence, on the basis that government policy may reduce corporate profit. World trade agreements from the EU often include human rights clauses, yet these are rarely enforced and more aspirational in nature. This is a system where investor rights – but not human rights – are enforceable.

The privileging of economic objectives above other social goals is evident in relation to the environment and climate change, which are, of course, feminist issues. A change requires questioning what we value as progress and what we entrust to markets to achieve. The idea that relying on economic growth alone to push developing countries forward is flawed, particularly with consideration of the environmental impact of such an approach. We need greater support for small scale farmers to address this, yet this is not compatible with cheap food imports.

Where does this leave us when it comes to shifting policies towards greater gender, economic and environmental justice? Strategies must include:

  • Insisting on formal human rights and gender impact assessment for all trade agreements, before they are concluded and periodically after they come into force.
  • Bigger strides in cross-regional solidarity. In the North, as political constituents, we must raise concerns about the impact of trade policies in developing countries and draw attention to their impact and highlight that this is not acceptable.
  • Advocacy for more supportive domestic policy frameworks that address the diverse inequalities that women face e.g. invisibility and devaluation of women’s care and domestic work.
  • Continue to work across movements to advocate for societies and economic frameworks that are sustainable and equitable.

Williams

There is a clear bridge between the two speakers in terms of austerity and the impact of trade policies. The link is the need to push for gender impact assessment and to emphasize the role of care and unpaid work, which are thrust most upon women’s shoulders.

What are the alternative visions? To see an economy that is caring and sustainable. Further, developing countries must have the policy space to do what is necessary to promote fairer visions and women’s rights.

Questions/ comments and discussion  

  • Need to try to organise gender impact assessments before trade agreements are finalized.
  • How can we organise civil society and ensure that they are involved in gender impact assessment of policies?
  • Mechanisms available in the EU aren’t necessarily available in developing countries need to make use of to challenge policies, such as the citizen response to TTIP.
  • Need to engage in raising the issue of why governments now tend to unwaveringly see trade liberalization as a positive thing.
  • Need for cross-organizing.
  • Need for an alternative vision e.g. to see an economy that is caring.
  • Raises the question – how does solidarity take shape? In Europe we should be letting EU politicians know about our anxieties regarding the impact of trade policies on the Global South.

Panel 3

  • Need for gender impact assessment, pre-, during and after macro fiscal policies.
  • Need to expand debate – what would an alternative vision to austerity and trade liberalization look like? For example, an economy that is caring.