2005 Policy Paper “The General Agreement on the Trade Services – GATS”

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ESIB – The National Unions of Students in Europe was founded in 1982 to promote the educational, economic, cultural, social and political interests of students in Europe. ESIB, through its 44 members from 34 countries, currently represents more than 10 million students in Europe.


1. Introduction

The General Agreement on Trade in Services (GATS) of the World Trade Organisation (WTO) is the central process which gives rise to privatisation of education. The GATS encourages the progressive liberalisation of educational services, among others, and has gained increasing importance in the world market for trade in education. When making specific commitments and negotiating under the GATS, services are categorised under the UN Central Product Classification, thus treated from a producer perspective, which denies any social context, making no distinction between education and other services. This ignores the range of functions that services have and the fact that there are functions that have significant public content and interest.


2. Areas of Concern in the GATS Process

2.1 Unclear Scope

The GATS provides [1] that a service supplied in the exercise of governmental authority[2] is not subject to the GATS rules. However, ambiguity arises from the fact that these terms are not defined. As regards higher education (HE) in Europe, the fundamental problem is that, although HE remains essentially public, recent developments have led to the increased introduction of the private sector into public higher education institutions (HEIs), and with this, the setting up of private-public partnerships and the introduction of private funding, combined with the traditional public investment in HE. Many countries have a mixed education system, and education cannot solely be said to be confined to the above definition. More problematic yet, is that in the event of disagreement as to what is actually classified under this definition, it is the WTO Dispute Settlement Panel that would ultimately take the decision as to what is, or what is not, a public service.


2.2 Lack of Transparency

The negotiating procedure, and the manner in which requests and offers are made under the WTO rules, is strategically very sensitive and therefore untransparent. Negotiating partners are usually very reluctant to publicly discuss those areas of vital interest to them or those in which they are willing to commit, or publish those offers or requests made by them. Requests and offers made in the period leading to the actual negotiation are not usually made public unless those making them wish to do so. They are not collected by the WTO secretariat and not accessible to the public. Indeed, only a few governments making offers and requests actually publish them. This lack of information compromises the role of society in influencing the debate on the provision of higher education.

Furthermore, the negotiations are not conducted separately for the different sectors, but jointly for all sectors at the same time. Therefore requests to commit in one sector might not only be granted on the basis of commitments made in that sector, but also on commitments in other sectors. This leads to the impossibility to formulate an informed opinion on the different requests and offers in all of the sectors. During the ministerial conferences, at which point specific commitments are set, the structure and procedure is such that Ministers are unable to communicate with the rest of their delegation, thus inaccessible. The lack of previous knowledge on the requests to be made, and the forum in which they are put forward puts undue pressure on Ministers to take up specific commitments and does not take into due consideration technological impact and risk assessment.


2.3 Inclusion of Stakeholders

In addition to the inadequacy of trade principles to education, the Ministries primarily responsible for the development of GATS rules and negotiations are those dealing with trade and economy rather than education Ministries. This means that the latter are excluded from the whole process, as are education stakeholders. Indeed, it is only a negligible number of governments that ensure active participation of education ministries and stakeholders in the GATS process.


2.4 The Binding and Progressive Nature of GATS

A particularly legal concern is the binding nature of the GATS, as an agreement adopted within the institutional framework of an organisation that operates upon rules which effectively bind those who adopt them. Furthermore, the impossibility of withdrawal of specific commitments within the first three years of their existence, as well as compensation that has to be made for the withdrawal of commitments after such time, makes GATS much more powerful than other international treaties in the field of HE. Coupled with this is the concern that the GATS and commitments made thereunder are not static, and require further negotiation, in line with the concept of progressive liberalisation provided for in the GATS.[3]


3. Specific Areas of Concern

3.1 The Increase of Private Investment in Higher Education

Particularly problematic in terms of the largely publicly funded higher education systems in Europe is the great fear that, while trade in educational services will benefit from a boost of private investment, public support therefore will decrease. The role that trade plays in this scenario is to encourage countries without the capacity or political will to invest in the physical and soft infrastructure for HE, to rely increasingly on private and foreign investors and providers.

This in turn will give trade rules a heavy influence on the terms and use of the private investment made and thereby national policy for education. Furthermore, there is great concern on the implications that this has on access to HE. While GATS advocators believe that increased student access to education and training is one of the strong rationales and articulated benefits linked to trade liberalisation, ESIB is greatly concerned with issues of affordability in the context of envisaged increasingly competitive and commercial HE provision.

Furthermore, state subsidies for education institutions may be considered as hindrances to trade and thus may, under the GATS rules, have to be abolished or, in accordance with ‘Most Favoured Nation’ principle, be given to domestic and foreign providers alike. In the latter case, public funding would be spread among more HEIs, decreasing the effectiveness of the public funds available.

3.2 Quality Assurance, Recognition and Registration

ESIB is greatly concerned that generic international quality standards of industry-based mechanisms might be applied to education. Furthermore, GATS provides[4] that qualifications, requirements and procedures, technical standards and licensing are not to be ‘more burdensome than necessary’ in ensuring ‘the quality of the service’. The language used for this is purposely vague, and these terms are undefined, so that it poses a threat to quality assurance and accreditation standards and procedures.

In this context, registration and licensing of foreign providers, particularly the threat of diploma mills and rogue providers, posed by the concept of market-driven for-profit education, is also relevant. Some countries have established new regulations for registering and licensing foreign or private providers, but many have not. Developing countries in particular do not have sufficiently robust mechanisms to regulate foreign providers adequately, and are thus concerned about their inability to protect students.

ESIB is also greatly concerned that some of the requirements established for recognition of qualifications and licensing may be perceived as potential barriers to trade and will therefore be targeted for liberalisation during future rounds of GATS negotiations.


4. ESIB Opinion

ESIB strongly opposes an extension of commitments in the education sector into the GATS treaty, as education is first and foremost an instrument for the growth of welfare and social development of a society.

ESIB is committed to increasing possibilities for cross-border education, but stresses that a trade regime is not appropriate to address educational issues.

ESIB stresses that educational services should be excluded from the GATS and negotiations on trade in educational services under the GATS discontinued.

ESIB affirms its support for the primary role of UNESCO and UN Human Rights Bodies in the promotion of educational, social, information and cultural rights. ESIB strongly encourages UNESCO to set up a framework to enable and facilitate the provision of cross-border education, as an alternative to the GATS.

This statement was adopted at the 49th Board Meeting in Reims, France, November 2005


[1] Article I(3)
[2] Defined in the same article as one that is not supplied on a ‘commercial basis’ and is not ‘in
competition with one or more service suppliers.
[3] Part IV
[4] Article VI(4)


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