Women‑owned businesses using Canada’s free trade agreements

Increasing participation in international trade by women‑owned businesses holds positive implications for Canada’s economic growth, gender equality and social cohesion. Canada is advancing an inclusive approach to trade that seeks to ensure that the benefits and opportunities that flow from trade are more widely shared, including with businesses that are owned by people from groups that have traditionally been underrepresented in international trade, such as women, small business owners ,and Indigenous Peoples^{Footnote 1}.

According to recently released data^{Footnote 2}, Canada’s women‑owned business use free trade agreements (FTAs) at a similar rate to businesses overall, although modest differences are apparent. Slightly more women make use of the Canada–United States–Mexico Agreement (CUSMA), slightly fewer use of the Canada–European Union Comprehensive Economic and Trade Agreement (CETA), and moderately fewer make use of the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP). Some 41.6 percent of exporters that are majority‑owned by women carried out trade under CUSMA versus 40.9 percent of all businesses. However, the corresponding numbers for women are lower for CETA and CPTPP. Under CETA, 8.9 percent of women‑owned exporting businesses reported carrying out trade versus 10.0 percent of all businesses, while under CPTPP only 5.1 percent of women‑owned exporting businesses carried out trade versus 7.8 percent of all businesses. These marginal differences in the use of FTAs are not surprising, as research findings by Global Affairs Canada’s Office of the Chief Economist have reported that women‑owned exporting businesses export at similar rates to all businesses.^{Footnote 3}

The above results are based on a survey question that listed three optional answers. The options were whether a business carried out trade, did not carry out trade, or status unknown, for each of the three FTAs. The percent of unknown responses was quite high for CUSMA, CETA and the CPTPP, ranging between 22.4 percent to 35.6 percent for both women‑owned and all businesses.

Additionally, the survey asked the primary reason why businesses did not carry out trade under an FTA. As noted above, women-owned businesses were marginally more likely to trade under CUSMA than all businesses. However, the responses provided by women‑owned businesses were quite different than for all businesses. For example, for women owned businesses, 4.8 percent responded that they did not understand the FTA process while 2.0 percent responded that their products do not qualify for rules of origin (ROO). Similar responses from all businesses were 12.6 percent and 2.8 percent, respectively.

Upshot

These findings demonstrate that women‑owned businesses make use of Canada’s network of FTAs at a generally similar rates to other businesses. Women‑owned business may, however, have somewhat different reasons for not making better use of an FTA, with a lack of information about the process of using an FTA being the most prominent. The Canadian Trade Commissioner Service is here to help businesses navigate international markets and have special programs targeting the unique challenges faced by women who export.

¹ Source: www.international.gc.ca/gac-amc/campaign-campagne/inclusive_trade/index.aspx?lang=eng

² Source: Canadian Survey on Business Conditions, fourth quarter 2021, Statistics Canada, released Friday, November 26, 2021, www150.statcan.gc.ca/n1/daily-quotidien/211126/dq211126b-eng.htm

³ Source: A. Bélanger Baur, 2019, «Women‑owned exporting small and medium‑enterprises – Descriptive and comparative analysis», www.international.gc.ca/trade-commerce/economist-economiste/analysis-analyse/women_owned-export-entreprises_femmes.aspx?lang=eng