Education Exporters Take Case to WTO


By Thomas Fuller

International Herald Tribune
February 18, 2003

Think trade negotiations, and bananas, beef or steel might come to mind. But probably not education. Yet today, with education emerging as one of the world's most vibrant and growing businesses, a number of countries are putting the classroom on the agenda of the World Trade Organization. The United States, Australia and New Zealand have all submitted proposals for the next round of WTO talks on services, which are due to be completed by the end of next year. The talks are known in the mind-numbing jargon of world trade as GATS. In broad terms, the proposals are designed to make it easier for private universities to expand across borders and for students to move more freely overseas to choose their university. Australia, for example, cites laws in some countries limiting foreign ownership of private educational institutions and onerous visa requirements as barriers to trade in educational services.

The proposals are very controversial and are being stiffly resisted by student organizations and other nongovernmental groups which say it is not up to trade negotiators in Geneva to discuss how countries educate their people. ''There are various social objectives that make higher education different from, say, hairdressing,'' said Guy Hughes, an activist with the British student group, People and Planet, which is leading a campaign against the WTO initiatives. ''Education is a public good and it needs to be treated as a public good,'' he said.

Partly because of lobbying from groups like People and Planet, the European Commission, which negotiates on behalf of the European Union, recently ruled out any deal on education in the upcoming GATS trade round. ''I would like to be absolutely categorical about this,'' Pascal Lamy, the EU commissioner for trade, said here two weeks ago. ''We are not proposing any undertakings at all in these areas.'' While these tough words pleased student activists, they are also somewhat misleading. One reason Europe is not proposing to further open its educational sector is because it has already liberalized it considerably. During the last round of service-sector trade talks, in 1994, the EU made commitments to open its markets for private primary, secondary and tertiary education - a move not yet taken by the United States or Japan. The fact that Europe will not make any concessions during this round does not preclude other countries from doing so. Under the WTO system, countries negotiate packages: The United States, for example, might agree to remove barriers to its educational market if Europe agrees to liberalize its transport sector. Yet because discussing education at trade talks is still a novel concept, questions abound. The WTO talks are meant to deal only with private education; there is a consensus that state-owned universities should not be touched. But experts say the line between private and public is becoming increasingly blurred. Partnerships between private companies and public universities are common, especially in the research field, and public schools sometimes seek private companies for certain services like computer classes. ''It's something which is not very clear,'' said Kurt Larsen, a specialist in the field who works at the Organization for Economic Cooperation and Development in Paris. ''Trade people don't want that to be very clear,'' he said. This is partly because it might mean limiting the scope for liberalization.

Larsen said a major growth area for educational services has been in Asia, where countries have opened their doors in the past decade to university ''twinning programs'' and other cross-border initiatives. China, a newcomer to the WTO, is pursuing ''a very open policy on educational services,'' Larsen said. Chinese authorities allow foreign universities to operate in the country as long as they partner with a local university. The largest ''exporters'' of educational services are the United States, Britain and Australia. These countries are active in both attracting students to their own campuses and opening campuses abroad.

Receiving foreign students is a highly lucrative business because the receiving country benefits from the students paying not only tuition, but living expenses and travel - the equivalent in some ways of big-spending tourists. Altogether the OECD puts the global market for such ''educational services'' at about $30 billion, which is only slightly less than the worldwide market for financial services. It is these huge financial stakes that have convinced countries like the United States, Australia and New Zealand to put proposals on the table. For New Zealand, a relatively small economy, ''educational services'' are the fourth largest revenue earner for its service sector. One of the New Zealand government's proposals is to make it easier for student recruitment and placement services to operate across borders.

''The reduction of barriers to trade in education does not equate to an erosion of core public education systems and standards,'' the government says in its proposal. But groups opposed to mixing trade talks with education say the highly intangible notion of educational ''quality'' may suffer if education is treated on a purely commercial basis. Trade negotiators have dollars in mind, not quality, they say. Hughes of People and Planet offers a litany of potential pitfalls: ''We don't want low-demand academic courses to get neglected,'' he said. ''We're concerned about academic freedom - that it doesn't become dependent on who is holding the purse strings. We're concerned about making sure that students from poor backgrounds can get access to education.'' ''Basically,'' he said, ''citizens of all countries should have the right to regulate vital services.''

A number of countries have studied the idea of puttingis this hughes quote ''quality assurance'' clauses into trade agreements. The Norwegian government is particularly concerned about this because it sends large numbers of students overseas every year - and is able to pay their tuition overseas thanks largely to oil revenues. But the government would like to know that it is getting a minimum level of ''quality'' at universities overseas. Together with Australia, the Norwegian government convened representatives late last year from more than a dozen countries to discuss the idea of quality assurance. The topic is so sensitive that the talks were held in secret.

Alas, Those familiar with the discussions say that participants effectively concluded that the world is not yet ready to rate educational quality the way you might label bed sheets by their thread count or a computer by its processing speed.

Thomas Fuller is the International Herald Tribune's Brussels correspondent.

More Information on the World Trade Organization

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.