Post-Brexit trade deals could make the world’s poorest worse off

In some of the poorest countries in the world, including some Commonwealth countries, there is strong evidence that badly-designed trade deals can hinder development – and harm women’s rights in particular

Girish Menon
Thursday 29 March 2018 10:23
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Can Brexit be reversed?

Among the many words that have been spent on the Brexit debate since Theresa May triggered Article 50 last year, one crops up time and time again: trade.

Since last year, ministers have expounded the mutual benefits of a new, UK-led era of global trading, outside the EU’s rules. Earlier this year, Liam Fox wrote that expanded trade relations will help bring “economic liberation” and prosperity to the poorest nations. And last week, the Foreign Office said it would use a coming summit of Commonwealth leaders in London to “make the compelling case for free trade as the best way to promote higher living standards around the world.”

Ministers are right that the expansion of UK trade brings potentially huge benefits to some of the poorest countries. But it bears saying that the risks are great if we don’t get it right.

In some of the poorest countries in the world, including some Commonwealth countries, there is strong evidence that badly-designed trade deals can hinder development – and harm women’s rights in particular. They can encourage a race to the bottom between poorer countries on workers’ rights and low pay; limit what governments can do to uphold rights, and to fund public services; and, through rapid changes in the jobs market, they can increase poverty.

What is still needed to complete a deal with the EU?

Think of the garment industry in Bangladesh. The 2013 Rana Plaza disaster is a prime example of how a growth in export industries can have devastating results, particularly for women and girls. Jobs were created that were unsafe and had exploitative conditions for the (overwhelmingly female) factory workers who make our clothes.

Low value industries like clothes manufacturing tend to grow when a country opens up to trade, and while many jobs might be created, they are often deeply insecure and unsafe. Workers – typically women and girls – are often forced to work all hours, and are frequently harassed or worse at work. “Factory owners know that their employees are not aware of their rights [and] try to exploit them”, says Shilpy, a garment worker in Dhaka.

And it’s not just in Bangladesh where trade can hurt the poorest – predominantly women and girls – in society. In Egypt, an investment treaty has allowed a French corporation to sue the government over its plans to bring in the minimum wage. In Vietnam, rapid liberalisation risks sinking a thriving food processing industry as the domestic market will be inundated with cheap imports, and many domestic firms that employ female seafood farmers are unlikely to survive.

Elsewhere, trade agreements have required governments to cut tariffs and corporate taxes – meaning less money for public services, that are disproportionately relied on by women.

We can all agree that it would be a terrible Brexit outcome for the UK’s future trade deals with poor countries to end up hurting women and girls.

Now that we know the UK will be free to negotiate trade deals during the Brexit transition period, ministers have a golden opportunity to demonstrate that “Global Britain” means taking a world-leading, principled approach to trade. Starting at the upcoming Commonwealth leaders’ summit in London, ministers should commit to the fairest possible post-Brexit trade offer. The UK’s proposed trade deals should be grounded in the strongest international rights standards and based on solid assessments of the likely impact on the poorest. Ministers must not negotiate new free trade agreements without ensuring that our new trading partners are going to protect workers' rights – especially those of women and girls.

UK trade after Brexit does have the potential to bring “economic liberation”, by sharing prosperity and helping the poorest women and girls in the world to claim their rights. Yet done wrong, the risks that we will do harm are immense. With just a year to go until Brexit day, now is the time to get this right.

Girish Menon is CEO of ActionAid UK. AAUK is a human rights and development charity that supports women and girls’ rights.

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