Breathe
By Cecily Fasanella
When the three governments signed the Mexico-U.S.-Canada Agreement (MCT), it was praised for its comprehensive approach to new and existing trade challenges. Since its entry into force, the TMEC has strengthened economic growth in the North American region by facilitating more than 1.8 trillion in total trade by 2022. 1.8 trillion in total trade by 2022.
Its innovations, including unprecedented multiple provisions on the environment, labor and economic inclusion, showed promising signs of progress toward resolving historic inequalities in trade, and of what the future of trade could look like - but promises are only as good as their delivery. As the agreement approaches its fourth anniversary since its entry into force, continued efforts to promote equity and inclusion of historically excluded groups, including women, will be crucial.
In 2023, we saw some significant achievements in terms of equity and inclusion of women SME owners and women workers under the TMEC. In September, the three governments organized the second SME Dialogueand brought together more than 160 small business representatives in Mexico City to share perspectives, best practices and business guidance. According to a report from the Office of the United States Trade Representative, the dialogue highlighted the experiences of women business owners. On the workforce side, the TMEC Rapid Response Mechanism was used 13 times in 2023, and has directly benefited 27,000 workers since its first use in 2021. The Office of the U.S. Trade Representative specifically noted in its 2023 annual report that the use of the Rapid Response Mechanism has supported a fledgling female-led union.
However, there are still many challenges to ensure that the agreement benefits all women - especially rural, indigenous and Afro-descendant women. What is the way forward?
First, all three governments need to increase the collection of gender-disaggregated data, especially on SMEs and labor force participation. None of the three countries, for example, has shared updated data on SME exports since 2021. Data on wages for workers in various industries are fairly comprehensive, however, the three governments could work to collect gender-disaggregated data on wages in specifically export-oriented firms to identify industries where the wage gap between men and women in the same positions persists. Historically, women in export-oriented manufacturing have been paid significantly less compared to men.
Second, leaders in government and the private sector must make concerted efforts to address issues that affect women's ability to form their own businesses and participate safely and successfully in their workplaces. Access to financial productsfor example, remains a significant barrier for many women business owners. In 2021, 74.3% of Mexican men had access to formal financial products, while only 61.9% of Mexican women did. Workplace harassment continues to affect working women in all industries, with workplace violence increasing by 44% from 2016 to 2021, according to INEGI. Companies must take this seriously and foster a culture of inclusion.
Finally, leaders in government and the private sector in all three countries should strengthen stakeholder engagement efforts. While the SME Dialogue is a valuable forum, the public and private sector should consider building a virtual library that is available to women when they need it. Access to courses detailing key differences in product safety regulations, customs procedures and tax obligations between the three countries could greatly benefit women SME owners trying to export for the first time. For all workers, frequent trainings on labor rights could help support the implementation of TMEC labor provisions, decrease violations and, in the long run, possibly help equalize wages for manufacturing workers throughout the region. In addition, it is essential to provide staff at all levels of the company with specific trainings on issues that often affect women, such as discrimination, the wage gap and harassment in the workplace.
A trade policy that includes and empowers women, especially those who have historically been marginalized, is something we must strive for. Empowering women economically not only helps to ensure their individual security, but also has important effects for their communities. According to the World Bank, ending discriminatory practices that prevent women from working or starting businesses could increase global GDP by more than 20%.
As the first formal review of the agreement approaches in 2026, governments, the private sector and civil society must work together and invest time and resources in women's economic empowerment. Maximizing the potential benefits of the SSS for all is a promise worth keeping.
*Cecily Fasanella is an associate in the Americas practice of Albright Stonebridge Group, where she advises clients on the regulatory framework, political risk and government relations in Latin America. She has extensive research experience in regional economic competitiveness, energy and environment, and labor policy.
The opinions expressed are the responsibility of the authors and are absolutely independent of the position and editorial line of the company. Opinion 51.
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