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Why North American Trade is an Essential Tool for Women’s Empowerment

While the North American countries have taken noteworthy steps individually to economically empower women, collectively the three governments have amplified these opportunities. Facilitated by the US-Mexico-Canada Agreement (USMCA), North American trade is an essential tool for women's empowerment. To maximize the potential benefits of USMCA for women, and improve women's economic empowerment across North America, stakeholders must work together to fully implement the agreement.

In an increasingly interconnected world, access to both local and international markets is key to economic wellbeing and community development. Yet, for many women across the globe, economic participation has not been guaranteed. From discriminatory labor laws, to challenges accessing capital, to lack of gender-related provisions in international trade law, women face many barriers to full economic participation. 

Economically empowering women not only helps ensure their individual security, but is seen to have a ripple effect of social and economic benefit for their communities. A report by the McKinsey Global Institute finds that if women’s economic participation were fully enabled, the world gross domestic product could increase by as much as 26% by 2025 ($28 trillion). In the United States, Mexico, and Canada alone, closing economic gender gaps could increase the regional GDP by $5.5 trillion. Furthering women’s participation in trade is one of many avenues through which economic inclusion may be advanced.

While the North American countries have taken noteworthy steps individually to economically empower women, collectively the three governments have amplified these opportunities.  Facilitated by the US-Mexico-Canada Agreement (USMCA), North American trade is an essential tool for women's empowerment.

The United States, Mexico, and Canada set out to modernize their trade relations through provisions of the USMCA. The Biden administration’s “worker centric” trade agenda takes this initiative a step further, implementing the agreement in a manner that underscores the importance of economic inclusion for underrepresented groups in international trade. This focus may provide the foundation that women workers and entrepreneurs need.

For the first time in a U.S. trade agreement, USMCA has explicitly made enforceable commitments which specifically impact women. For example, Article 23.9: Discrimination in the Workplace, prohibits

discrimination on the basis of sex (including with regard to sexual harassment), pregnancy, sexual orientation, gender identity, and caregiving responsibilities; provide job- protected leave for birth or adoption of a child and care of family members; and protect against wage discrimination.”

Moreover, other provisions across chapters on Labor, Small and Medium Enterprises, and Competitiveness make attempts to codify equality in their respective scopes. In so doing, the agreement strives to address the importance of inclusivity and intersectionality. For example, the mandate of the Competitiveness Committee established in Chapter 26 includes “enhancing the participation of SMEs, and enterprises owned by under-represented groups including women, indigenous peoples, youth, and minorities”.

Yet, measuring the effectiveness of USMCA as a tool for empowerment will likely prove quite difficult. Sex-disaggregated trade data is scarce, and the causal impact of global economic shifts can prove hard to isolate, especially given the effects of the COVID-19 pandemic on supply chains, consumer demand, and inflation. Thus, evaluating the success of USMCA for women may be more feasible on an issue-by-issue basis— particularly if and how gender commitments are upheld. 

For example, the agreement specifically seeks success in assisting women-owned SMEs, leveraging collaboration across borders in an area that is usually relegated to the national level. USMCA Chapter 25 focuses on providing assistance to SMEs, and includes gender-specific language which promises collaboration “on activities to promote SMEs owned by under-represented groups, including women”. Since USMCA’s implementation, stakeholders across all three governments have taken steps to ensure these efforts continue.

Chapter 25 establishes an SME Dialogue, a tool of USMCA which aims to bring together stakeholders across all three countries. The first dialogue was held in April 2022 in San Antonio, Texas, and produced a list of resources for women-owned businesses, including online assistance, funding, and federal contracting support. The event also hosted an array of stakeholder presentations from all three countries, such as the Mexican Agency for Customs, the Canadian Border Services Agency, and the United States Small Business Administration, who presented on many topics, including as women-owned businesses.

Many events have been held to highlight the importance of USMCA to woman-owned SMEs as well. Earlier in 2022, the USMCA SME Delegation hosted a webinar to provide tips from women business counselors to women businesses through the Small Business Administration Office of Advocacy. 

During the event, Luz Maria de la Mora, then Undersecretary for Foreign Trade in Mexican Secretariat of Economy, spoke on both direct and indirect effects of USMCA on empowering women entrepreneurs. The former undersecretary made multiple references to the particular importance of digital trade for women, one of many areas in the agreement which may improve women’s economic well being indirectly. 

The benefits of liberalized trade have proven empowering to women in a number of cases globally. With USMCA, the potential avenues through which these effects may play out increase dramatically. 

For example, the agreement features Chapter 19: Digital Trade, a trade framework for cross-border e-commerce, the exchange of digital assets, and international data flows. Especially as technology continues to transform the global business landscape, fewer barriers to accessing digital markets for women-owned businesses and SMEs means a more democratized competitive field.   

However, there are fronts where USMCA’s gender provisions could be strengthened further – the degree to which will be determined by how they are utilized. 

One example involves USMCA’s pioneering Rapid Response Mechanism for Labor (RRML), an annex which was designed to serve as an enforcement tool for labor laws between the United States and Mexico. 

The RRML has been triggered six times since going into effect, each a complaint initiated by the United States. There are other potential cases, however. In 2021, two female workers, with help from El Centro de Los Derechos del Migrante, filed a complaint against the United States for discriminatory practices in the temporary worker visa program. Because the RRML was written in a way that expedites US claims against Mexico more quickly than Mexican claims against the US, the process of justice for these workers has yet to be resolved, and the case is ongoing. 

To maximize the potential benefits of USMCA for women, and improve women's economic empowerment across North America, stakeholders must work together to fully implement the agreement. This is an objective that will require concerted efforts to correct errors, replicate successes, and amplify those successes to the public - especially before its first formal review in 2026

Regarding its areas for improvement, concerns that women raise regarding discriminatory practices must be addressed in an appropriate and timely manner. Successfully addressing these concerns will reaffirm USMCA’s position as an inclusive and intersectional trade agreement. 

Where the agreement has realized successes, these need to be replicated. Webinars hosted to share information and resources on the USMCA with women entrepreneurs need to be continued. Business associations, the private sector, and universities should be seen as partners in transmitting this information. The three governments should also consider holding these webinars in Spanish, French, Nahuatl, and other languages to ensure women in a multitude of communities understand the impact and potential benefits of international trade.  

Finally, these successes must be celebrated. The communications strategy around USMCA needs improvement. The aforementioned examples of initiatives taken to elevate Women-owned SMEs show that the three signatory countries are putting in effort to make the agreement work for their people. But are their people aware of this? Are women entrepreneurs aware of tools such as the USMCA Small Business Export Resources guide? Are the government officials who represent them and decide on the future of the agreement aware of these? USMCA implementers must do more to communicate the agreements’ successes to the public.

The three signatory countries have shared little information with the public on the implementation of the agreement. Collecting and sharing data (disaggregated by gender and other demographic categories) on points such as the number of SMEs in each country created since USMCA, the number of SMEs trading internationally, and the growth in total value of trade and investment could help stakeholders see the value in the agreement. In sectors where women are or may be falling behind, USMCA could be used to better empower them. 

Mexico Institute

The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute.   Read more

Canada Institute

The mission of the Wilson Center's Canada Institute is to raise the level of knowledge of Canada in the United States, particularly within the Washington, DC policy community.  Research projects, initiatives, podcasts, and publications cover contemporary Canada, US-Canadian relations, North American political economy, and Canada's global role as it intersects with US national interests.  Read more