GENDER, TRADE AND THE WTO

Contents:

The Informal Working Group on Gender and Trade
Executive Summary of the Ghana Case Study:
· Gendered production and gendered markets
· Few benefits from trade
· Interaction between reproduction and trade
· Women's participation in trade decision-making
· Conclusions
A Preliminary Note highlighting the Conceptual and Policy Links Between Gender and Trade:
· Gender-Trade Myths
· Gender-Trade Facts
Trade Interconnections/policy implications
What does the phase out of the MFA quota system mean for garment workers?

The Informal Working Group on Gender and Trade
Women Working Worldwide was instrumental in setting up the women's caucus at the first Ministerial Conference of the World Trade Organisation in Singapore in 1996. This has now become the informal working group on gender and trade (IWGGT) - and comprises representatives from development non-governmental organisations worldwide and from the international trade union movement. They share a common concern about the impact of trade liberalisation on women and wish to ensure that a gender analysis is built into trade policy-making and associated decision-making, procedures and organisations.
The IWGGT is currently administered by the International Coalition for Development Action (ICDA).
Needing to find a way in which a gender analysis might be brought into trade discussions and the WTO , the IWGGT chose to explore the country reports produced by the Trade Policy Revue Mechanism (TPRM) of the WTO. From the outset it became clear that the WTO's TPRM had little capacity or political will to raise gender issues.
The IWGGT therefore decided to offer an analysis that can be used in the trade policy revue (TPR) process, and to do this through a concrete case study from a country that will be under review in the near future. Ghana was chosen since a second TPR report is due in 1999 and there is information about the WTO and trade policy in civil society and social movements in Ghana

Executive Summary of the Ghana Case Study
Decision-making on trade policies and in the World Trade Organisation (WTO) is mostly based on macro-economic free trade theory, technical arguments or specific commercial interests.
So far, gender concerns have not been taken into account in trade policies and practices, and no official analysis has been made of the gender impact of WTO rules. This contradicts the commitment made at the United Nations World Conference on Women in Beijing (1995) to incorporate a gender perspective in macro-economic policies.
The gender blindness of trade policies and WTO rules ignores men and women's' different roles at work, at home and in society, and that women face discrimination which restricts their engagement in economic activities. This results in trade and its impact being different between men and women.
The Informal Working Group on Gender and Trade (IWGGT), a world-wide network representing organisations concerned with gender issues, commissioned this case study on gender, trade and the WTO in Ghana. The aim is to further develop the gender analysis of trade and the WTO as well as to raise the awareness and debate about the need for a gender perspective in trade policies and WTO rules. This case study also explores some policy measures and how to introduce gender issues at the political level. It is targeted at the members of the IWGGT worldwide, non-governmental organisations (NGOs), social and civil groups, officials, politicians and academia.
This case study focuses on where trade and trade rules negatively affect women, in order to counter the current assumptions that trade is gender neutral and to avoid further hardship on poor and marginalised women who constitute 70% of the world's poor.

The gender and trade analysis used in this case study looks at four aspects:
1. identifying how gender inequalities constrain trade policies, WTO rules and trade activities to benefit women and improve women's income, rights and well-being;
2. analysing how trade, trade policies and WTO rules contribute to, or diminish, gender inequalities, gendered markets, female poverty and discrimination against women and girls;
3. analysing how gender relations at the household level and women's reproductive tasks interact with trade and trade related activities and vice versa;
4. identifying the power of women in decision-making on trade at different levels, and how trade and WTO rules impact on decision-making especially that in favour of women.
A case study of Ghana was chosen in order to provide more concrete insight into the gender dimensions of trade and WTO rules, and to explore whether the WTO Trade Policy Review of Ghana which is due in 1999 might provide a way of introducing gender perspectives into WTO proceedings.
Owing to limited resources, this case study cannot be considered as a full gender analysis of trade and the WTO in Ghana. Instead it aims at being a building block. Starting with the general socio-economic and political context, the case study looks at some sectors where a trade and gender analysis is relevant: agriculture, trade, industry and mining. It was not possible to research important areas such as trade in services, trade-related intellectual property rights (TRIPs) and investment measures (TRIMs), and the environment.

The following summarised findings from the four questions above provide interesting insights into how trade and WTO rules are not gender neutral.

1. Gendered production and gendered markets
· Women's engagement in economic and trade activities in Ghana is often inhibited by inequalities such as unequal access to land and credit, lower levels of education and a much higher burden of reproductive tasks and providing an income than men. These inequalities have divided production along gender lines.
· The most striking finding was that women in Ghana have traditionally dominated domestic trading, marketing and regulating the markets but women's participation in international trade seems to be small, limited to importing consumer goods from neighbouring countries or overseas. Inequalities as well as the gendered production of export products (cocoa, gold, timber) have resulted in gendered import and export markets.
· In the agricultural sector, export corps and their earnings are mainly controlled by men. Women's production is mostly limited to food for the family and the domestic market.
· In export-oriented industry, a case study of the export processing zone (EPZ) reveals that women work mostly in the lowest jobs and have little bargaining power. This also applies to women in the exporting mining sector.

2. Few benefits from trade
· The export of male-dominated cocoa has resulted in lower levels of extension services, credit and marketing support for women's food crops whose production is then pushed to marginalised land.
· Domestic trade liberalisation and WTO rules make under-resourced women compete with subsidised food imports, while access to Northern food markets is still limited.
· Liberalised global trade has resulted in tougher competition among women international and domestic traders; more resources and skills are needed to compete, leaving fewer opportunities for women who are poor and disadvantaged and/or have a high burden of reproductive tasks.
· In the industrial sector, EPZ factories have created jobs and seem to guarantee basic gender rights (e.g. employment after giving birth) but trade competition pressures lower labour standards and result in very poor working conditions and wages.
· Export of minerals has increased male jobs but undermined income-generating activities by women while also affecting women's health.

3. Interaction between reproduction and trade
· Ghanaian women still bear the major responsibility for household and other reproductive tasks, and the financing of the household. Less income due to trade affects spending e.g. on girl's schooling.
· The WTO's market orientation of agricultural trade can lead to price increases and decreases, especially in foodstuffs, that affect women's purchasing and spending powers.
· Poor women traders report that reproductive tasks and income-generating pressures hamper the efficiency of their trading activities.
· Women working in the EPZ factories experienced an increase in work burden as their reproductive tasks at home are not shared by their husbands. Moreover, they spend more of their income on the household than men.

4. Women's participation in trade decision-making
Women's concerns are not incorporated in trade policies, the WTO and the trading sector. Interviewed trading women complained that they could not raise their concerns in trade policy, even though a few women were identified at the highest policy decision-making level. The WTO rules in the agreement on agriculture do not provide enough instruments to protect and improve the women's food sector.

Conclusions
The findings indicate that trade and WTO rules are not as beneficial to all as the free trade macro-economic theory assumes.
This means that incorporating a gender analysis into trade policy-making would increase the effectiveness in making trade beneficial to all and prevent women from sliding further into poverty, which has many repercussions on society at large.
In order for trade to respect women's rights and dignity, a thorough reorientation of the current trade regime is necessary. There are, however, concrete steps that can be taken in the short-term, by the WTO and national governments in cooperation with specialised agencies, to immediately start making improvements:
· Trade decision-makers could start to take account of gendered production and gendered markets, and ensure that adequate disaggregated information is collected and used. National governments, the WTO and other agencies could commit themselves to additional resources to further develop a gender and trade/WTO analysis.
· The WTO's Trade Policy Review reports could incorporate a gender analysis. The renegotiation of WTO agreements such as the Agreement on Agriculture could incorporate 'non-trade' concerns such as gender, food security and rural development.
· Analysts and civil groups could use a gender perspective in their analysis of trade and WTO rules and discussions with trade negotiators.
A gender and trade checklist is appended as a tool for those wishing to consider what a gender analysis of trade, trade policy and the WTO implies.

A Preliminary Note highlighting the Conceptual and Policy Links Between Gender and Trade.
( Prepared for the Informal Working Group on Gender and the WTO)

Gender-Trade Myths
The reduction of trade and capital mobility barriers as required by the Uruguay Round Agreements and regional trade and production blocs such as the EU, NAFTA and Mercosur would at first glance appear to be gender neutral.
How could reducing or eliminating tariffs and quotas or eliminating restrictions on foreign investment have different impact on women as opposed to men? How could opening up the domestic economy to foreign banks and foreign insurance companies affect women differently than men? Are not these simply technical processes that affect everyone the same? Women have no special stake in these processes.
These are some of the myths that underlie trade policy discussions in most all settings: at the level of bilateral and multi-lateral negotiations among governments, at regional trade bloc negotiations, and surprisingly, among and within development, trade and environmental NGO's. Raise the question of gender and people raise their eyebrows and grimace or stare blankly at you. Subtext: women have no place here--gender is a philosophical discussion. It has not place at the table of trade negotiations.
But of course that is not true. Trade, investment and competition policies, like macroeconomic fiscal and monetary policies are neither gender blind nor gender neutral in their impact on the lives of women. Rather they are male biased and male centred and thus have tremendous implications for women's employment, women's poverty and women's social burden, and ultimately women's overall well-being.
Drawing on current research on the relationship between gender and trade, the rest of this note presents in outline fashion the "stylized" facts of the gender trade nexus. It is presented as a point for discussion and elucidation. It is neither conclusive nor exhaustive since the work on gender and trade is still at a nascent stage.

Gender-Trade Facts
Fact #1. The gender division of labour within the household and the community continues to be a fundamental dividing line between men and women.
It is women who are primarily responsible for the care and reproduction of society. This contribution is unpaid and unrecognised. Trade policies are made on the assumption that women will continue to do this. So the burden of the adjustment cost associated with trade liberalisation whether in terms of higher import cost or lower price will have tremendous effect on women's social burden. When governments re-distribute economic resources toward the trade sector, or give tax advantages or receive less revenue from the elimination of tariffs and etc., it is usually the social services that are sacrificed. Yet the demand for these services remain the same or may even have increased. Who must shoulder this (additional) responsibility? Women. There is no neutrality. There is no gender blindness. It is assumed that women will extend greater efforts to provide water and food for their families, to nurse the sick who cannot find reasonable health care, and to take care of the children who have no day care facilities.
According to UNDP 1995 Human Development Report, in 1993 women contributed over $11 trillion worth of household work to the world economy. This is in addition to their contribution to subsistence agriculture, informal sector activities and subcontracting production of multinational corporations.
In most OECD countries women's work burden is about 7-28 % more than men. In most LDC's it averages 20% more (in rural areas). In both developed and developing countries about 2/3 of women's work goes un-recorded, compared to only about 1/3 (1/4 in LDC's) of men's .

Trade Interconnections/policy implications:
1. Trade policies that are not gender aware and gender sensitive may adversely impact women's well being. Most often as in the case of export processing zones and in the clothing textiles and light manufacturing industries the expansion of trade is based on access to low wage female labour. This is often accompanied by inadequate protection for women's health and safety. Furthermore, women must continue to shoulder the double burden of childcare and housework. Minimum wage laws and other labour rights do not address these concerns.
2. Trade policies can affect the ability of governments to finance social sector expenditures by altering the revenue base (Sen 1996). Thereby shifting the burden to the household sector--into women's laps.
3. Trade policy should not ignore women's unpaid work in social reproduction. Therefore it is crucially important that gender impact analysis and gender perspective be integrated into the design, implementation and review of trade policies and programs. Social development must also be a crucial cornerstone of trade policy.

Fact #2. Women and men have different access to economic resources: property, credit, skills training programs and technical assistance programs for business and agriculture.
Gender inequality in care and reproduction of the community is not the only obstacle that women face. They must also deal with institutionalised sexism and biases that blocks women's access to land and credit. In some countries women are working on lands that is not theirs and which legally they cannot, buy, sell or inherit. Additionally, the ability to obtain loans to make the necessary productivity enhancing improvements are blocked by biases that them prevent women from full access to bank loans from financial institutions. This creates bottlenecks and inefficiency in production of food and other basic necessity. It may also work against export promotion schemes if traditions constrains women's participation in the labour market.
Trade interconnections/Trade policy implications
1. Trade policies and trade agreements may tend to either reproduce this situation or may in the worst case introduce new forms of inequality and biases. As pointed out by Sen (1996), "trade liberalisation is not inherently welfare producing; it can produce and re-produce inequality, social disparities and poverty at the same time as it expands wealth."
2. Existing gender inequality and gender biases may adversely affect the outcome of trade policies.
Fact #3. Women and men operated in segmented labour market that is unfavourable to women.
In the labour market gender bias continues to perpetuate the existence of segmented labour market where inequality in wages, promotion and condition of work is pervasive.

Trade Interconnections/Trade Policy Implications
1. Trade liberalisation may further the segmentation of the labour market along gender lines. Historically, trade liberalisation in some countries have tended to increase women's employment in labour intensive industries. See for example, the maquiladoras in Mexico and the other export processing zones in other parts of the world.
2. Generally investment occurs in the paid labour market. In some areas of Africa women would not necessarily benefit from more trade or greater investment since these would only marginally affect women's domain: food production. As a result there is very little technological improvements or innovation in women's domain. Furthermore, when trade barriers are reduced goods produced by women may not be able to compete with foreign produced goods. Rarely is there investment to make food production or housework less time consume and more efficient.
3. Trade liberalisation may 'alter the bargaining position of workers vis a vis wages and social benefits.' Given the current male centred approach of trade unions, this can mean greater pay inequality and increasingly hazardous working conditions for women workers.
4. It is therefore important that governments and the multi-lateral trade institutions, such as the WTO and UNCTAD:
· a. Undertake gender impact assessment of the impact of trade policy on
· women workers.
· b. Collect gender disaggregated data in review of trade policy.
· c. Ensure the incorporation of national equal opportunities and non
· discrimination laws into trade policy and trade agreements.
Fact #4. Trade policy is closely intertwined with domestic fiscal, monetary and labour market policies. This intertwine can have a reinforcingly positive or negative effect on women's social and economic status
Given the prevalence of trade blocs and the expansion of WTO into services, trade related investment and intellectual property rights there is even greater integration and subordination of national social and economic policies to trade imperatives. As a result, we can no longer focus 'on the social and economic status of men and women at the national level'; but must be looked also at the intersection of national and international economic policy levels.

Trade Interconnections/Trade Policy Implications
1. Trade liberalisation engenders "new forms of regulation, coordination and economic management which may transform the relationship between states and societies." This will affect not just medium and large firms but will have important impacts on community and social institutions at the meso and micro level. It cannot be assumed that this transformation will be unambiguously beneficial to women.
For example, in some African countries export promotion may shift resources from women's own account activity towards the exporter. This include land, tax grants and etc. Export subsidies may adversely affect women income, trading and employment position (Vander Stichele 1997)
2. Trade liberalisation may improve or erode the tax base which have implication for the provision of public service.
3. Trade liberalisation which opens up domestic credit market or changes bank/financial regulations may further constraint women's access to credit.
4. Trade Institutions such as WTO must begin now to develop statistical data baselines on specific aspects of women' well being that can be followed over a number of years (Sen 1996).
Fact #5. Trade policy is not isolated from other Macro level policies (such as development, aid, structural adjustment, debt). Gender must play an important role in the formulation of all such policies.
If the objective of trade policy is the reduction of poverty and improvement in the standard of living of citizens then it must be examined in the context of all other macro level policies. For example, trade policies for African countries must be developed in the context of the already existing SPA process which aims at poverty eradication. It must consider the challenge of the external debt services burden as a limiting factor on LLDC's ability to participate in the trade liberalisation process. The ability to compete effectively in global trade depends on the ability to improve the skill mix and composition of the labour force, to undertaking technical upgrading and to build the necessary infrastructure for production and marketing.

This point to the need for human development and capacity building of which education, health and technical training is essential. Obviously a constraint on this is the debt services that are drained from the economy into the international financial and capital markets.
But an even more fundamental constraint is the relationship between men and women in society. As pointed out above, unequal gender relationship cripples women ability to be efficient producers in agriculture and food production. Likewise, biases that result in the under or non education of girls prevents women from contributing their full talent to the labour market. Reliance on cheap and exploit low wage female workers can only get an economy but so far. Ultimately, real transformation requires the full utilisation of all of the talents of the men and women in society.
Women's role in society is crucial to the issues of equality, efficiency, productivity that underlies macro policies. This is because gender relations " influences the distribution of work, income, wealth and productive inputs and the behaviour of agents' (Çatagay 1996). As pointed out by Çatagay (1996), women spend greater portion of income on productive improving consumption: health, nutrition, education. Improvement in these factors are correlated with increased levels of productivity and hence economic growth.
Trade Interconnections/Policy Implications
1. Comprehensive approach to restructure economic incentives and disincentives so as not to constrain women's ability and access to economic resources.
2. Ensure that gender biases and inequality do not undermine the allocative efficiency of trade and macro policies by removing barriers to the mobility of resources, especially labour resources within and between economies.
3. Ensure adequate flow of information and technological transfer between north and south and between men and women.
3b. Gender aware and sensitive technical assistance that promotes technological and skill upgrading of exports.
3c. More opportunity for skill acquisition by women (Sen 1996).
Bibliography
Bakker, Isa. 1994. The Strategic Silence: Gender and Economic Policy Zed
Çatagay, Nilufer. 1996. "Gender, Trade and the WTO" Unpublished.
Sen, Gita. 1996. "Gender, Markets and State: A Selected Review and Research Agenda." World Development, vol. 24, no 5 pp. 821-829.
Vander Stichele, Myrium. 1997. Gender Mapping the European Union Trade Policy, WIDE.
Williams M. 1997. "The Roots of Trade Policy" in Vander Stichele's Gender Mapping The European Union Trade Policy, WIDE.
Williams, M. 1996. "Trade Liberalisation Society and the Environment" Ecumenical Review vol. 48, no.3.

What does the phase out of the MFA quota system mean for garment workers?
Angela Hale and Jennifer Hurley. (Women Working Worldwide)

The Multi Fibre Agreement is being phased out to bring world trade in textiles and garments in line with WTO rules. This is seen as benefiting developing countries and any criticism focuses on the manner in which the USA and Europe are holding up the process. However, looked at from the point of view of workers rather than countries a different picture emerges. The TNCs who increasingly control the garment industry benefit from open markets and associated competition between global suppliers. For workers North and South this means constant insecurity and deteriorating conditions of work. The ATC could thus become another mechanism through which companies are able to use the free trade agenda at the expense of workers.
The ATC is an international agreement to bring trade in textile and clothing in line with WTO rules. (see appendix) It is part of the global process of trade liberalisation. However, unlike most liberalisation measures, it is seen as working in the interests of poor countries of the South, increasing their access to previously protected Northern markets. Critical analysis has focused not on the Agreement itself but on the manner in which Europe and North America have controlled its implementation. The demand is for full and fair implementation which is assumed to be beneficial. But who exactly is going to benefit? Those predictions that are being made suggest that although some Southern countries will gain others are likely to lose. Few questions are raised about what this means for workers. Yet major relocation of garment production means massive job losses. And what are the implications for labour standards in the countries which gain? Trade liberalisation in general is widely recognised as having a negative impact on conditions of employment. Will the ATC be any different? It is important to examine what the phase out means not only for different countries but also for companies who control the industry and the millions of women and men who depend on it for their livelihood.

Management of the phase out
The ATC provides a framework for phasing out the Multi Fibre Arrangement. The MFA has dominated trade in textiles and garments since it was firs established in 1974. It operates a system of quotas which have been thebasis on which industrialised countries have been able to restrict importsfrom the South. Special measures were seen as necessary because the labourintensive nature of the industries meant that it was becoming relatively easy for developing countries to compete. However such protectionist policies cannot be sustained within the framework of the free trade agenda established at the GATT Uruguay Round. The removal of the MFA was seen by many developing countries as one of the few gains of this new agenda and was one of the reasons for signing up to other GATT agreements.
The phase out of the MFA is taking place over a ten year period between 1995 and 2005. So far the impact on developing countries has been minimal. The USA and Europe have been strongly criticised for deliberately holding back on the process. This has been done by adding additional items to the MFA list and by liberalising items not strategically important such as dolls clothes, parachutes and seat belts (Baughman and all, 1997). The USA has published product details for the whole period and the intention is clearly to "end-load" the process so that most items of significance are only included in the final stage. At the same time other protective measures have been used to hold up the process. This includes transitional safeguards, anti-dumping measures, and rules of origin. ( see appendix)
The manner in which the phase out is being managed and the readiness of industrialised countries to use protective measures calls into question the whole ATC process. Firstly, the phase out was planned over ten years to prevent major disruptions to industry. Yet important sectors are being left until the very end of the agreement so that major adjustments will be necessary during the last few years. Secondly it is debatable the extent to which changes in market access will really take place. Given the history of protectionist interests in the textile and clothing industry, will it be allowed to liberalise overnight, or will some new emergency measure be introduced. According to the EU the phase out will occur on time and no extensions will be given. However it would appear that in Britain at least, the intention is to make greater use of anti-dumping legislation. The spirit of the ATC has not been honoured so far and there is a very real chance that industrialised countries will find ways of introducing new forms of protectionism in 2005.

Major garment companies and the ATC
But how significant is the MFA phase out anyway to the economies of rich countries in the North? The MFA was drawn up in the interests of Northern companies at a time when clothing was produced by relatively small manufactures and sold to local and national retailers. Since then garment production has been dramatically restructured. The industry is now largely controlled by big retailers and brand based companies. The power of these companies is based on their control over design and marketing. Typically they own no production facilities themselves, but now manage a global network of suppliers. Significant players are the familiar names of high street shops and designer labels ; Nike, Levi's, The Gap, Wal-Mart, Marks and Spencer. Large manufacturing companies, such as UK owned Coates Viyella, have themselves increasingly located production in low wage economies. New technology and the increased flexibility of capital enable rapid relocation in the interests of higher profit margins.
These global players can now control the industry without government protection and they clearly benefit from the free movement of the global market. With international restructuring it became more advantageous to abandon the MFA than to continue supporting it. Sartoris, Director or the German Clothing Federation announced in 1996 that the motto of the German clothing industry was "no customs, no quotas" ( Textile Outlook International July 1996) According to Underhill the MFA phase out was therefore a process through which powerful companies and their Governments were able "to get something for nothing". (Underhill, 1998). They no longer wanted the MFA, but they used the offer of removing it as an important incentive to encourage countries in the South to support other GATT agreements around intellectual property, investment and services. Increased access to developing countries markets is also built into the ATC phase out process itself and is being used as a bargaining tool to persuade countries such as India and Pakistan to lower their tariff barriers.

More open markets benefit companies not workers
The MFA phase out may suit major business interests in Europe and North America but this doesn't mean that it is in the interests of Northern workers, or even small local manufacturers. With a more open market workers in Europe and North America will increasingly compete for their jobs with workers in low wage economies. This process has been well underway even before the phase out period. It is reported that even the UK retailer Marks & Spencer recently retracted its "buy British" policy, ordering its suppliers to cut costs by sourcing elsewhere. Thousands of UK workers have lost their jobs as a result. For those who remain in work in industrialised countries, increased international competition means driving down labour conditions. Marceline White who works with Asian and Mexican immigrant women in the USA believes that dropping the MFA will accelerate the dislocation that garment workers have been experiencing over the past decade. Workers complain of a big decline in conditions including low pay and extremely long hours. Some have been active in campaigns against overwork, where workers were forced to work in excess of 100 hours a week without overtime pay, with increased physical injury and stress ( Gender and Trade Electronic Conference).
In the USA this threat to workers jobs and conditions is partly attributed to NAFTA, which is an example of a trade agreement based on quota free access to a large Northern importer. Garment production has moved from the US to Mexico, which is the only developing country in the agreement. Mexico has seen its deficit of US$229 million in textile and clothing trade with Canada and America rise to a surplus of US$1.54 billion, between 1992 and 1996. (Textile International Outlook, May 1997). However this has been achieved only at the expense of workers basic rights. "NAFTA represents nothing but the "maquilisation" of the whole region. This means a faster working pace, longer hours of work, lower wages, reduction in health and compensation costs, as well as weak enforcement of labour laws. In this way multinationals can obtain huge profits that return intact to their countries of origin"( Carmen Valadez, 1995).
Nike is a well known example of a powerful company using international differences in wages and conditions to increase its profits. All Nike shoes and 70% of its apparel are sourced in the Asia, mainly Indonesia, China and Vietnam. Nike claim that their subcontractors are obliged to pay "full cash minimum wages". However low wages are typically maintained through the use of low piece rates and impossible production targets. In a firm in China Sunday leave and the annual Christmas holiday were cancelled once they began supplying Nike and their standard working week was increased to 60-80 hours. Meanwhile Nike is the fourth most profitable clothing company in the world. (Clean Clothes Campaign International Forum, 1998).
However Nike is not untypical. Subcontractors to Wal-Mart, the largest retailer in the US, the sixth largest company in the world and the largest single importer into the US, don't pay their Bangladeshi workers the legal minimum wage. Workers earn 40-70% below the minimum wage for an 80 hour working week . In effect, some of the world's poorest people are being robbed of $20 per week. They work in unhealthy conditions with restricted toilet breaks and are denied their statutory rights such as maternity leave. In 1998 Wal-Mart's revenue was $137.6 billion, 36 times greater than Bangladesh's revenue of $3.872 billion. Wal-Mart's financial success is not based only on the exploitation of Southern workers; half of its 720,000 US retail employees qualify for federal assistance under the food stamp project (National Labour Committee, 1999)
Global sourcing by retailers has weakened the position of high cost Northern producers. Coats Viyella is the largest garment manufacturer in Europe. In an effort to increase profits it cut its UK workforce by 11% between 1992 and 1995, while its overseas workforce increased by 30%. In 1996, it again restructured the company and reduced the number of garments made in UK by 50%, which resulted in 1,300 redundancies in the UK. Much of the remaining production was for Marks and Spencer, their biggest customer, but now even Marks and Spencer is demanding an increase in international sourcing. The UK union KFAT now reports a loss of 1800 jobs a month from UK manufacturers (KFAT News 1999). Coats Viyella is typical of how large manufacturing companies now operate, combining increased outsourcing with continued investment in their downsized domestic bases, where quick response times compensate for labour costs.
The MFA phase out will enable transnational companies to become even more flexible, with less constraints governing their movement between countries and suppliers. Companies will become even freer to seek out greater financial advantages where ever they can find them; cheap raw materials, low wages, lack of trade union rights, government subsidies. They can use potential savings as threats to undermine job security in both the North and the South, threatening to move to countries with cheaper resources to keep employees in line and working in sub-standard conditions. The reality is therefore is that the greatest benefits of more open markets go to TNCs, whilst workers in both the North and the South are threatened with insecurity and lowering of standards.

Relocation of garment production under the ATC
The ATC will cause major relocation of garment production. The South as a whole is likely to gain a greater share of the industry. However this is likely to be concentrated in a few low cost locations. The MFA quota system, although operating against the South as a whole, did have the effect of guaranteeing a Northern market to a large number of poor countries. With a more open system producers will have to compete in a global market. Poor countries will need to invest meagre resources to make their industries attractive to foreign companies. However not all will succeed and weaker producers are likely to lose their entire export industry. Millions of workers will be displaced. Even countries that succeed will lose much of the potential income to transnational companies who can use more open trading systems to their advantage. For example they
can manipulate their accounts so that they pay their taxes in the countries that have the lowest tax bands. The countries that succeed are likely to have the "advantage" of efficient but low cost labour, in other words places where workers are not disruptive and paid low wages.
Since the ATC is likely to displace many workers it would seem important to make appropriate preparations. However one of the problems is that it is not easy to predict exactly which countries will ultimately benefit or lose. Variables are changing rapidly and it is impossible to determine what the criteria will be in 2005. Cheap labour is not the only important factor. Other variables include the skill level and flexibility of the workforce, the nature of the countries financial system and sources of capital, flexible production processes, attitudes to technology as well as the transport and communications infrastructure. Proximity to the market is significant but does not necessarily imply quick
deliveries, sourcing cheap materials is more important than transit costs (Mehta, 1997; Kelegama, 1997). Beyond these factors lies the issue of bilateral and regional trade agreements that will still be in force beyond 2005 and will play a significant role in determining which countries will have the greatest export opportunities. According to Munir Ahmad of the International Textile and Clothing Bureau ( Interview1999), it is more difficult than most people think to predict what the outcome will be. It is not just a question of international policy decisions but also how national Governments respond to new opportunities.

Implications for workers in different countries
In spite of the difficulties of making accurate predictions, it is important to consider the possible scenario at the end of the phase out period. This can be done by looking at the current position of some significant countries and regions.
In general Asia is expected to benefit, with something like a 6% increase in trade. China and India are likely to gain most followed by Pakistan and Korea. (Majmudar 1996, Yang 1994). All have access to domestically produced fabrics. Labour costs are higher in Korea but it will benefit from having moved to the more capital intensive end of the industry. China's textile industry needs upgrading but it will benefit from Hong Kong's well established financial and marketing expertise as well as low labour costs.

China
China is already emerging as a dominant supplier in spite of high quota restrictions and other forms of protectionism. China's exports to the United States were cut from 4.4 per cent to 0 per cent in 1994 due to changes in the rules of origin specifically designed to curb its rapid expansion into the US market (Cline, 1995) Despite this, in the first quarter of 1997, American imports of Chinese textiles and clothing soared by 61% in volume, with an increase of 50 per cent in value, over the same period in 1996. (Textile International Outlook, May 1997). Although China is well placed to benefit the outcome will be largely determined by whether or not they becomes part of the WTO. Only then will China become entitled to the liberalising provision of the ATC. The US is championing China's accession to theWTO, backed by major corporations such as Boeing and Motorola. This is in spite of the fact that an independent study by the International Trade Commission predicts job losses by US garment workers. Concern is expressed about human rights in China , but in the event this is unlikely to prevent them joining if it is seen as benefiting major business interests.
Some are predicting that China's accession to the WTO will mean they will become the major world supplier of goods at the lower end of the market. Clearly one reason for this is the seemingly endless supply of cheap labour. The adoption of neoliberal policies, including "labour flexibility" by China's ruling elite has meant the loss of worker protection and massive unemployment. It has also further weakened workers capacity to take collective action to defend their rights. In foreign-invested factories and joint ventures it is normal that a strict regime of discipline is incorporated into workers contracts and notices are posted in
factories listing fines and physical punishment for such offences as speaking or drinking water during working hours, sitting or resting and going to the toilet too often. (China labour and Information Centre). Women garment workers typically work 10-14 hours a day, seven days a week and gross neglect of industrial safety has resulted in numerous factory fires. China may gain from joining the WTO and being included in the ATC, but what sort of gains are these for workers?

Bangladesh
For some countries the uncertainty that surrounds the future of the ATC has huge implications. Bangladesh in particular is largely dependent on the garment industry for its economic survival. In 1997/1998 the garment industry represented 73.3% of Bangladesh's total export industry. This has come about largely because of Bangladesh's trade advantages under the MFA and EC GSP scheme. Export quotas are only imposed on Bangladesh by two of the nine signatories to the MFA, the US and Canada, and in those countries only on selected items. In a quota free environment it will be difficult for Bangladesh to compete. According to Anisul Haque, chairman of the leading Mohammadi Group (ATA Journal, June/July 1999), buyers only place orders with Bangladeshi firms when they have used up the quota allocations of other countries. In other words it is not the buyers first choice. When it no longer has a quota-free advantage it may receive even less orders. Other obstacles include its dependency on foreign design, technology repairs and even textiles and its lack of
ability to respond quickly. The Bangladeshi industry is concentrated in lower end of the market. It has no support industries because the spinning, weaving, dying industries are very weak, so it has to import almost all raw materials which means that the value added to the economy is only 25%, the rest of the profits flow to other countries (ATA Journal June/July 1999). It now also faces stiff competition from countries which have become cheaper as a result of currency devaluations after the Asian Crisis.
However Munir Ahmad of International Textile and Clothing Bureau believes that Bangladesh could remain competitive if other trade measures remain in place, such as tariff advantages in the European market. This will depend on the Government ability to overcome existing limitations and upgrade the industry. A plan has been prepared which is calling for huge amounts of external investment in the textile industry. There are proposals for increased training for employees in the garment industry to offset the low productivity rate ( Centre for Policy Dialogue 1999). The Bangladesh Garment Manufacturers and Exporters Association also has proposals to cut the lead time from 120-150 days to 60-90 days.
The future for the thousands of garment workers in Bangladesh is therefore extremely uncertain. If current disadvantages are not overcome there are likely to be massive jobs losses. Thousands of women have migrated from poorer rural areas to seek jobs in garment factories. They work long hours in unacceptable conditions, but can at least support themselves and have gained some measure of personal freedom (Kibria, 1995). When the jobs go, what will happen to these women? It is questionable whether they will be able to reintegrate back into their villages. Their lives in the factories go beyond the bounds of what is traditionally acceptable for a future wife. How will they survive in the city? And what will be the result for working class urban families where the women's income is vital for the family's survival? On the other hand, if successful initiatives are taken to upgrade the industry there could be benefits for women workers in terms of increased training and better working conditions. However experience has shown that if work becomes more skill intensive there is no guarantee that it will remain women workers who are hired and trained. Also proposals to cut lead times implies increased intensity of work in an industry where the workforce already work an average of 10 hour a day. Whatever the scenario there is likely to be serious dislocation for which workers are ill prepared.

Europe
The response from industrialised nations to the ATC has been to try to get manufacturers to focus on value-added products based on technological advantage, flexibility and just in time production. Between 1993 and 1995 the developing countries share of the global clothing trade dropped by 6.5% to 53%, which implies that the industrialised nations have reclaimed some of the market (Bhattacharya, 1999). Those workers least threatened in Western Europe are therefore those in involved in producing high quality garments at the top end of the market. For all workers increased competition means reduced bargaining power. More work is put out to homeworkers and there is increased pressure to accept new "flexible" patterns such as irregular shifts without adequate overtime pay.
Eastern Europe is benefiting from the ATC as well as reduced customs tariffs. Inward investment has been from Germany, and more recently Italy, as well as Sweden and Austria. In fact, the first wave of liberalisation appears to be in line with E. European exports into Europe and not Asian exports (Spinager, 1995) an indication of how biased the MFA phase out is in practice. The bulk of investment into the area is in Poland, Romania, Hungry and the Czech Republic. Germany and Italy are biggest investors in E. Europe, while UK favours Far East and France favours North Africa. It is likely that Morocco and Tunisia, and also Portugal and Greece, will be undercut by Eastern Europe and Asia.
By 1996 Poland had become the sixth largest clothing supplier to EU, apparently a great success story. However, economic success at the national level does not translate into prosperity, or even job security, at the personal level. In Poland wages are kept so low that women have to work long hours to reach excessively high targets in order to earn wages that are below the legal minimum. The average wage for a garment worker is DM230, while a family of four need DM1,000 just to get by. If they work very hard with overtime, working 12-16 hours per day, a worker can earn DM450, which is still not enough to get by on. Also workers can be laid off temporarily without pay, when there is not enough work (Made in Eastern Europe, Clean Clothes Campaign, 1998). When demand changes, or a contract is in danger of moving elsewhere, they are not given any warning and suddenly find themselves unemployed and without compensation. Their lives are held ransom to the vagaries of the international market and the increased mobility of capital. Already within Eastern Europe there are signs of a situation reflecting that in Asia, where production moves according to differences in countries wage rates. Some companies are moving from Poland and Hungry to Romania, Slovenia and Bulgaria. In Bulgaria workers report that they are constantly threatened with the need to keep down production costs in order compete. They are frequently locked into factories until quotas are finished and made to perform excessive unpaid overtime (CCC Newsletter 11, 1999).

Turkey
Another significant player is Turkey, which had the largest share (11.7%) of EU garment imports in 1995 and an increasing share of the US market. It has advantageous access to EU and has a good chance of establishing its position before the end of the phase out period (ATI, December 1996). It has abundant access to cotton and unlike China has a strong fabric market and quicker turnaround times. Deficiencies in capital and know-how are slowly being built up. The combination of these advantages meant that between 1990 and 1996 the number of foreign investment backed firms increased from 58 to 114. This is very important on an economic level because investment tends to return to the same places, clustering in specific countries (Textile Outlook International, May 1997).

Links to industrial restructuring
This clustering effect illustrates one of the paradoxes of the garment industry. At the same time as production appears to be more footloose, going where the prices are lowest, the industry is also becoming centralised in specific firms and countries. Restructuring and rationalisation which has taken place since the Asian crisis, has been characterised by not only increased internationalisation of production but also company mergers and increased market concentration among the largest groups (Euratex Bulletin, January 1999). In other words theindustry is simultaneously concentrating its resources while expanding and moving its purchasing through subcontractors. This corporate structure exemplifies changes in the world economy where profits and benefits are stored in one region and the sacrifices made to create those profits are concentrated in another. Northern based companies are managing production in Eastern Europe, Central America and Asia and as countries are labelled too expensive they are abandoned for cheaper neighbours causing a downward pressure on wages and conditions. The ATC is simply an integral part of this trend, removing some of the remaining barriers to the free flow of market forces.
Other changes in the industry also effect the nature of competition in a more open market. In an international survey of the textile and clothing industry carried out by Underhill (1998), the most important contributor to failure was "inappropriate products for rapidly changing markets". This has serious implications for the workers. The number of buying seasons has doubled in the last few years to between six and eight as Northern retailers are only willing to carry limited amounts of stock in order to respond more rapidly to changing trends. Such demands for flexibility are clearly linked to labour conditions since they translates into forced overtime and extended periods of unemployment.
The garment industry has always been characterised by low wages and poor working conditions. What trade liberalisation is doing is pushing this to the limits. The unacceptability of this is becoming increasingly recognised so that parent companies are coming under pressure to accept responsibility for working conditions wherever production is based. Many garment companies are responding by committing themselves to codes of conduct on labour conditions. Turning this commitment into something meaningful is fraught with difficulties. But more fundamental is the basic contradiction between any notions of "ethical sourcing" and the whole way in which the industry operates. The exploitation of global inequalities is fundamental to the way the garment industry is now structured and it will take more than company codes to prevent this. On the other hand companies may be realising that they themselves may ultimately lose from this system. Unbearable work burdens, low wages and the reduced ability of states to support health and education is not the basis of an efficient workforce. In fact the end result could be social breakdown. Such social costs are a price that the very companies that are exploiting employees are going to have to pay (Elson, 1998).

Conclusion
If we look at the MFA phase out within the framework of the global operation of the industry we can begin to see beneath the official rhetoric. The ATC is being presented as a great leap forward in international trade relations, creating a more equal playing field which will benefit Southern countries more than the North. In reality the main impact of the ATC will not be a relocation of the industry from North to South but a relocation of production sites within the South itself. Some Southern countries will benefit, others will lose. However the main beneficiaries will be Northern based companies who will profit from fewer restrictions on their global operations. Meanwhile workers in both the North and South will suffer as their jobs become even more insecure and conditions continue to deteriorate. The ATC can be thus be seen as another mechanism through which companies are able to use the free trade agenda to maximise their profits at the expense of workers. Those who criticise the ATC present it as a battle ground between South and North, but the real battle is between international capital and workers everywhere.

Selected Bibliography
Baughman, L., Mirus, R., Morkre, M. and Spinager, D., 1997. "Of Tyre Cords, Ties and Tents: Window Dressing in the ATC" in World Economy, (20), pp. 407-437.
Bhattacharya, D., Centre for Policy Dialogue, Dhaka, 1999, "Facing Post-MFA Challenges: Bangladesh textile and Clothing Sector" Paper given at UNCTAD Expert Workshop on "Trade, Sustainable Development and Gender" July 12-13th.
China Labour Education and Information Centre, 1995, "Behind the Boom, Working Conditions in the Textile, Garment and Toy Industries in China".
China Labour Education and Information Centre, 1996 "The flip side of success: the situation of workers and organising in foreign-invested enterprises in Guangdong".
Cline, W. 1995, "Evaluating the Uruguay Round" in World Economy, 18(1), pp. 1-23.
Hamilton, C. and Whalley, J. 1995, "Evaluating the Impact of the Uruguay Round Results on Developing Countries" in World Economy, 18(1), pp. 31-49.
Kibra, N. 1995, "Culture, Social Class and Income Control in the Lives of Women Garment Workers in Bangladesh" in Gender and Society, 9(3), pp. 289-309.
Majmudar, M. 1996, "Trade Liberalisation in clothing: the MFA phase out and Developing Countries" in Development Policy Review, 14, pp. 5-36.
Mehta, P. 1997, "Textiles and Clothing - Who Gains, Who Looses and Why!", Centre for International Trade, Economics and Environment, Paper No. 5, May 1997, Calcutta.
Spinager, D. 1995, "Prosperity for All? Reflecting on the MFA Complex after Marrakech" in World Economy, 18, pp. 665-680.
Underhill, G. 1998. Industrial Crisis and the Open Economy. Politics, Global Trade and the Textile Industry in Advanced Economies. Macmillan,
London.
Vainio, M., 1996, "Quantifiable Impact of the Uruguay Round on Poverty" in Development Policy Review, 14, pp. 37-49.
Valadez, C, 1998, "NAFTA and Women of the Mexican Maquilas" in A. Hale: Trade Myths and Gender Reality, Global Publications
Yang, Yongsheng "The impact of the MFA Phase Out on World Clothing and
Textile Markets" in Journal of Development Studies, April 1994

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