Riding the tiger of growing trade in higher education services: smart regulation needed instead of laissez-faire hyperopia or prohibition policy myopia

Trade in education is debated between market liberalizers and protectionists and is played out within countries and their different stakeholders, for example between government ministries (e.g. ministry of trade versus ministry of education) and between government and the private sector (privately owned schools versus publically run schools). A balance needs to be struck between consumer protection and the rights of governments to pursue high quality education without falling into the trap of closing market access to foreign education service providers.

Rethinking Trade in Education Services: A Wake-Up Call for Trade Negotiators

Education plays a crucial role in fostering personal and social development, as well as economic growth. Government policies play a dominant role in this sector. Over time, trade in education services, particularly at the tertiary level, have been growing in importance. Driving factors include a combination of demographic changes, technological developments, national development goals, and governmental reforms to the funding and provision of higher education. The educational market has grown in size with more exporters entering the field to satisfy growing demand worldwide. The education sector today truly operates in a global context with institutions, programmes, and people supplying services across borders at an unprecedented scale.

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Trade in education services: Market opportunities and risks

The internationalization of education services is a politically contested subject. Trade in education is debated between market liberalizers and protectionists and is played out within countries and their different stakeholders, for example between government ministries (e.g. ministry of trade versus ministry of education) and between government and the private sector (privately owned schools versus publically run schools). A balance needs to be struck between consumer protection and the rights of governments to pursue high quality education without falling into the trap of closing market access to foreign education service providers.

Trade in Educational Services and the Doha WTO Round: the need to move out of current impasse

Trade in educational services (ES) is a potentially very lucrative source of revenue for a country and its schools, universities and training providers. For example, exports of ES and their respective share of all exported services in 2000 amounted to 10.28 Billion USD (3.5%) for the USA and 2.155 Billion USD (11.8%) for Australia. Looking at the world market of ES, the total value of annual trade in 1999 in higher education services has been estimated at 30 Billion USD reaching 50% of trade in financial services estimated at 59.3 Billion USD. These figures would even be higher if estimates were available for total trade in ES. Higher education is only one of five sub sectors in ES. Not included are trade in primary secondary and adult education services.

Saner, R. 2005. Trade in Educational Services and the Doha WTO Round: the need to move out of current impasse. Paper presented at the ECG-WTO, August 2005.

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Negotiating Trade in Educational Services within the WTO/GATS Context

Trade in Educational Services (ES) is affecting the interests of many countries in trade, economics, education and culture resulting in heated debates between government representatives, private sector investors, teacher unions and student associations on how to approach liberalisation of this sector, if at all. What ever the approach, an agreement on GATS/ES should be sufficiently flexible to safeguard the multi-functional nature of education, as well as the different needs of developing countries’ education without falling into the trap of “managed trade” nor succumbing to short-term myopic protectionism.

The authors describe the complexities of the WTO/GATS negotiations on trade in educational services and outline ways on how negotiations of GATS/ES could be successfully completed within the timeframe of the Doha Round.