GATS and Globalisation of Higher Education

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GATS and Globalisation of Higher Education

• David Robinson
• Canadian Association of University Teachers
• The Change Agenda in Higher Education
• Dublin, September 21, 2005

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The globalisation of higher ed

• Higher education has historically been
  international in scope
• Today, internationalisation is giving way to
  globalisation
• Deepening economic integration based on the
  deregulation of markets, privatisation and
  commercialisation

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Dimensions of the globalisation of tertiary
education

• Rapid proliferation of for-profit tertiary
  institutions
• E-learning enterprises (University of Phoenix)
• Public institutions establishing off-shore
  commercial ventures
• Monash University, Australia
• Franchising/branding arrangements
• University of Central Lancashire, UK
• International student recruitment
• Australian model

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Globalisation of education For and Against

• For
• Spread of access and opportunity
• Consumer sovereignty
• Greater efficiency and cost-savings
• Economic growth and development

• Against
• Increased inequality
• Lower standards and quality
• Undermining the academic craft
• Loss of traditional educational values

At issue is a fundamental clash of values
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Creating global commercial rules for education

• GATS General Agreement on Trade in Services
• NAFTA North American Free Trade Agreement
• Plus, numerous bilateral agreements (e.g.
  US/Australia FTA)

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What is the GATS?

• Legally-binding treaty on trade in services
  established in 1995 as part of WTO Agreement
• Applies to all measures affecting trade in
  services and to all levels of government
• Also applies to delegated authorities such as
  professional associations, standards-setting
  bodies, and boards of hospitals, schools and
  universities
• Built-in progressive liberalisation agenda

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GATS and education A clash of principles

• GATS is in conflict with public service
  principles
• GATS aims to expand market opportunities and
  provide legally-binding protections for
  commercial providers
• GATS can lock-in the commercialisation and
  privatisation of public services
• GATS sees public services at best as missed
  commercial opportunities, at worst, as barriers
  to trade

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Dont take my word for it

• The GATS isfirst and foremost an instrument for
  the benefit of business. - European Commission,
  2000
• There are various economic and political
  advantages associated with liberalization
  commitments under the GATSincluding overcoming
  domestic resistance to change. - WTO Training
  Package, 1998
• The rules are aimed at liberalizing trade, not
  at protecting social services. Royal
  Commission on the Future of Health Care in
  Canada, 2002

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GATS covers all ways modes of supplying
education

• Cross-border supply a college in the U.K.
  provides e-learning to students in Ireland
• Consumption abroad Chinese students come to
  Ireland to attend an Irish school
• Commercial presence an Australian university
  sets up a branch campus in Malaysia
• Movement of natural persons a South African
  professor comes to work temporarily at an Irish
  university

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GATS disciplines

• Horizontal disciplines
• Transparency
• Most-Favored Nation (MFN)
• Sector specific disciplines
• National Treatment
• Market Access
• Future disciplines
• Domestic regulation

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Barriers to trade in education

• Obstacles identified
• Restrictions on e-learning
• Economic needs test on suppliers/minimum service
  obligations
• Local hiring preferences and training
  requirements
• Measures requiring local partnering
• Discriminatory tax treatment
• Subsidies for domestic institutions
• Consumption subsidies for nationals (student
  loans/grants)
• Quotas on the number of institutions and foreign
  students
• Complicated and unclear accrediting processes
• Prohibition on private and/or for-profit providers

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Specific reservations

• Have to be written carefully and will be
  interpreted narrowly
• Can only be changed for a price
• Protect existing measures, not future policies
  and regulations
• Are intended to be temporary only

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Trade and education Cautionary tales

• Jamaica Some less developed countries were not
  fully aware of what they were doing.
• South Africa Private foreign providers skimming
  the cream of the education market
• Canada NAFTA T-1 visas weaken local hiring
  preferences
• In short, many legitimate policy tools at risk

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Pro-development measures prohibited under GATS

• Requirements that skilled foreign employees
  provide training to locals
• Requirements that publicly-funded research and
  development grants to foreign providers produce
  benefits in the host economy
• Technology transfer and local research
  requirements
• Source GATS scheduling guidelines available at
  www.wto.org (S/CSC/W/19).

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The US position on GATS and education

• Identifies education as one of top 4 priorities
  in current GATS talks
• Requesting and offering almost complete market
  access and national treatment commitments in
  higher and adult education
• Not willing to make commitments on mode 4,
  movement of natural persons

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Public services exempt from GATS?

• Article 13 of GATS excludes services provided
  through the exercise of governmental authority
  meaning services supplied neither on a
  commercial basis nor in competition with private
  providers
• Article 13 is unclear and subject to
  conflicting interpretations Gottlieb Pearson
• Public services would appear to be in
  competition with other service suppliers.
• Government of British Columbia, Canada

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A limited exemptionThe case of Canadian health
care

• Ifgovernments were to include to some
  expanded level of pharmaceutical insurance,
  incorporate some range of home care services
  under the Canada Health Act, or allow private
  for-profit organizations to deliver health care
  services, then international trade agreements
  could come into play.
• Royal Commission on the Future of Health Care in
  Canada, 2002

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European Union GATS commitments on education

• EU made GATS commitments on privately-funded
  education services
• It is not the case that a whole education
  institution has to be a for-profit outfit for the
  GATS to apply. Any of its constituent services
  from frontline ones such as teaching, to
  cleaning, school meals services and the school
  library could fall under the GATS if private
  capital is involved. Glenn Rikowski

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OECD RecommendationsGATS impact?

• HEIs actively seek external sources of funding
• HEIs be required to generate financial surpluses
• HEIs should commercialise research
• HEIs should market themselves more
  energetically internationally
• Re-introduction of fees subject to a means test

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Conclusions

• Carefully assess trade implications of
  educational policy changes
• Ensure any reforms are protected under the
  definition of public services in GATS
• Ensure that international trade agreements make
  explicit allowance for both maintaining and
  expanding public services