Higher Education Crossing Borders

The General Agreement on Trade in Services (GATS), adopted by the World Trade Organization in 1995, clearly identifies education as a service to be liberalised and regulated by trade rules. While some see GATS as an opportunity, others view it more as a threat. For many, it has raised questions that need to be answered.

The Guide simplifies the complexities of cross-border higher education and GATS. It examines the different dimensions of cross-border education within the context of GATS: the present landscape, opportunities and challenges, and the implications for policy and practice in higher education. It is meant for a range of stakeholders: policy-makers, senior academic leaders, faculty members, students and researchers. The aim is to heighten awareness and knowledge about this elusive and evolving phenomenon so that both policy-makers and practitioners can make informed decisions in the light of their own priorities and goals. Initial reviews from countries as diverse as Sierra Leone, Trinidad & Tobago and India suggest that this Guide will be of particular benefit to colleagues in the developing world.

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The purpose of this Guide is to make higher education policy-makers and leaders more aware of the realities of cross-border education in an increasingly trade-oriented environment. In turn, this greater awareness will likely prompt closer examination of the role that cross-border education plays in relation to a country's priorities, resources and goals for higher education.

Higher education has new responsibilities and new challenges in a more globalized world - a world where the knowledge society, market economy, information and communication technologies (ICTs), and trade have ever-growing importance and influence.

Realities of today

International education in all forms has been occurring since long before the advent of GATS. However, new developments in cross-border education require a careful review of what national policies and regulations are needed to ensure that cross-border education - either outgoing or incoming - provides greater access to a high quality education experience for learners, offers a bona fide qualification, and fits into the national-level policy framework for postsecondary education.

The introduction of bilateral and multilateral trade agreements that focus on services rather than goods has been a wake-up call for many service sectors. The education sector is no exception. Who would have anticipated even two decades ago that education moving between countries for commercial reasons would be subject to trade regulations? But this is the reality of today.

Has GATS been a catalyst for increased commercial higher education between countries? Many would say the opposite is true - that increased private for-profit education at national levels and the flow of students and education programs between countries came first, and only now are trade agreements recognizing education as a commodity. Most educators believe that trade rules are not necessary to regulate the movement of commercial education between countries. Education has been moving between countries through development cooperation, academic exchanges and now commercial initiatives for years and the education sector has developed and can continue to create the appropriate policies and regulations. Nevertheless, bilateral regional and multilateral trade agreements exist and their rules are being applied to trade in higher education. This reality must be faced and acted upon by the higher education sector.

Some governments, higher education institutions and educators embrace this reality. Others are repelled by the notion that education is being treated as a tradable commodity. Both reactions exist often within the same country or higher education institution.

Challenges related to GATS and higher education

Dealing with the issues and implications of trade agreements is a relatively new policy area for the higher education sector. By the same token, trade negotiators have not had extensive experience with education services. This requires close collaboration and intensive information exchange between education policymakers and trade negotiators. Also, given that progressive liberalization is the ultimate goal of GATS, higher education leaders and policy-makers need to be working in close consultation with trade negotiators to monitor current and future negotiations that include trade-in-education services.

As has been emphasized in this guide many times, GATS is a new, untested and evolving agreement. The interpretations of existing articles and obligations may change and new disciplines be developed. The recent introduction of the "new complementary approaches" is proof of this. Requests and offers are still being tabled. To date, there is little activity in the higher education sub-sector, but current and future negotiations may put greater pressure on using education services as part of cross-sector trading, meaning that education may be "traded off" to permit market access in another sector or to meet a mandatory and predetermined number of commitments.

Further investigation into the types of barriers to trade in education services is necessary because the removal/reduction of barriers is at the core of trade liberalization. What may be seen as barriers by a country wishing to access a foreign market may really be fundamental aspects of the regulatory system in the receiving country. It is important that the higher education sector be vigilant and make sure that domestic regulations that are seen as policy priorities are not removed or watered down by countries wanting access to domestic higher education markets through cross-border education.

The focus of cross-border education and of GATS deliberations has been almost entirely on the teaching side of education and has not addressed implications for research. Research is an integral part of higher education and further investigation is needed into the potential impact on applied research - and especially privately contracted or funded research. Do public education institutions that are undertaking research and development activities have unfair advantage over private organizations that do not usually receive public support for their activities? Could public subsidies be construed as a barrier to fair trade or, under the national treatment condition, have to be given to private foreign providers?

The rationales driving trade in education are complex. They differ if one is a receiving country or a sending country. For instance, receiving countries may be interested in increasing student access, and in creating a competitive environment between domestic and foreign providers in order to improve quality or provide education programs in areas where there is no domestic expertise. Sending countries often see cross-border education as a means of creating strategic alliances or generating alternative sources of income. Rationales for commercial cross-border education differ from rationales for exchange partnerships or international development initiatives. Education policy-makers need to be clear about the rationales that underpin national policies on cross-border education and to ensure that the appropriate regulatory frameworks and strategies are in place to achieve the stated objectives.

It is the university sector, within the post-secondary education category, that has been most involved in discussing GATS. Much less vocal have been the professional, technical and vocational providers. It would be useful for national policy-makers to have more discussion with the non-university sector. The impact of trade rules on the regulations of the professions also merits further attention, especially given that higher education is often directly involved in the education, training and possibly certification of the professions. To date there has been little discussion of issues related to the "other services" category. Increased trade in education services such as language testing and quality assessment and evaluation services will have significant implications for higher education and need to be kept on the radar screen. Finally, perhaps there is something to be learned from how other social service sectors such as health and culture have approached the issues related to the inclusion of their services within the GATS regulations.

This Guide has focused on GATS, but another WTO agreement that merits careful monitoring is TRIPS - Trade Related Aspects of Intellectual Property Rights. Of particular interest to the higher education community are issues related to: whether intellectual property rights will encourage or inhibit innovation and research; who owns copyright of materials used in e-education; and how indigenous knowledge can be protected.

Issues in other policy domains

GATS and other regional/bilateral trade agreements are trying to facilitate increased mobility of professional and skilled workers on a temporary basis. Cross-border education, especially the movement of students, scholars and professors, will introduce new issues related to immigration policies in terms of visas, working permits, residency status and even dual citizenship. What are the long-term implications for migration patterns and immigration status?

Cross-border education, as well as science/technology research and development, are seen as tools for strategic alliances between countries and institutions. In the past, there has been more emphasis on cultural, scientific and political alliances, but given the increasing importance of commercial trade of education services, higher education is perceived as a more important means of developing for economic alliances. What is the emerging role of higher education in bilateral and regional foreign policy development?

In the past, nation-building by investing in higher education through human resource development, institutional strengthening, and scholarship programs has been an important part of international development and technical assistance programs. In the last decade, these aid-oriented initiatives have given way to projects that based on principles of partnership, exchange and mutual benefits. Is the inclusion of education as a tradable service under the purview of trade agreements such as GATS an indication of a shift away from aid and partnership initiatives towards commercial trade as a primary tool for developing higher education in developing and transition countries? What are the implications and consequences of the "aid to trade shift" and the existence of the "aid for trade" package in GATS?

The issues raised in this section highlight a number of critical areas for further investigation, analysis and policy reform. Clearly, the list is more illustrative than comprehensive. Further attention needs to be given to these and other aspects of education that will potentially be affected by increased cross-border education and the presence of new trade regulations.

Maximizing benefits and minimizing risks

The mobility of students, professors, knowledge and values has been part of higher education for centuries, but only in the last two decades has there been a significant growth in the mobility of programs and providers through physical and virtual modes of delivery. This presents many new opportunities - for increased access to higher education; for strategic alliances between countries and regions; for the production and exchange of new knowledge; for the movement of graduates and professionals; for human resource and institutional capacity-building; for income generation; for the improvement of academic quality; and for increased mutual understanding. But just as the list of potential benefits is long and varied, so is the list of potential risks.

Risks can include: an increase in low quality or rogue providers; a decrease in public funding if foreign providers are providing increased access; non-sustainable foreign provision of higher education if profit margins are low; foreign qualifications not recognized by domestic employers or education institutions; elitism in terms of those who can afford cross-border education; overuse of English as the language of instruction; and national higher education policy objectives not being met.

Both risks and benefits vary between sending and receiving countries, between developed and developing countries, for students, institutions, companies and employers. In light of the fast pace of cross-border growth and innovation, it is important that the higher education sector be informed and vigilant about the risks and benefits and, more importantly, about the need for appropriate policies and regulations to guide and monitor current and future developments.