BY VIV MILEY
As if the federal government wasn't enough of a threat to Australia's crisis-ridden tertiary education system, an agreement currently under negotiation in the World Trade Organisation's Geneva headquarters could enforce the further privatisation and corporatisation of education.
"Free trade" in education services has been on the books since the formal promulgation of GATS, the General Agreement on Trade in Services, in 1994. Education services were one explicit topic of negotiation in the international trade meetings that led to the creation of the WTO in 1995.
When the major trading powers began planning for the launch of a new round of trade talks at the WTO's ministerial conference in Seattle, one of their main aims was to extend the terms of GATS to new fields of services.
While they failed to launch a new round in Seattle, due to protests both inside the conference and outside on the streets, the agreement which established the WTO provided for a "built-in agenda", which means that new negotiations on GATS (and on the Agreement on Agriculture) can proceed even without a comprehensive new round. The WTO began taking submissions on extending GATS on January 1, 2000, and formal negotiations began in March.
The major player behind the push for extending GATS is the United States. Two of the US's major target areas are health and education services, areas that have been predominantly the domain of the public sector. The US hopes to use GATS as a lever to enforce greater privatisation of these sectors, and to allow greater penetration of US companies into service provision.
Even before Seattle, then US trade representative Charlene Barshefsky justified this in purely economic terms: trade barriers in services hurt US corporations and were "barriers to American exports and jobs creation".
In 1996 the US generated a $6.6 billion trade surplus in its educational and training services export sector — little wonder it is now pushing for other countries to open up this and other service markets to the private sector.
As a trade agreement, GATS is unique: it is both the first multilateral agreement to "provide legally enforceable rights to trade in all services" and the first multilateral agreement to cover investment.
A WTO document, The design and underlying principles of GATS, explains that the agreement "covers not just cross-border trade but every possible means of supplying a service, including the right to set up a commercial presence in the export market".
Member-nations' obligations under GATS work in two ways.
Firstly, member-nations must abide by two "principles" clearly set out in the agreement: the national treatment principle, which states that members should not discriminate in favour of national providers, and the most-favoured-nation (MFN) principle, which states that members should not discriminate between different member-nations.
Secondly, GATS sets out the terms of each member's specific commitments to liberalise on a sector-by-sector basis. At this stage the agreement is a "bottom-up" agreement, which means that member-nations choose the service sectors they wish to open up to foreign providers.
However, there is already pressure to change this to a "top-down" agreement, which would mean that member-nations would have to designate the specific service sectors they don't want GATS to apply to. If the major trading powers succeed in launching a new WTO trade round in Qatar in November, such a change to GATS would be on the agenda.
Education is very much on the GATS chopping block.
On December 18, the US formally submitted to the WTO a proposal outlining ways to "help create conditions favourable to suppliers of higher education, adult education and training services" through "removing and reducing obstacles to transmission of such services across national borders through electronic or physical means, or to the establishment and operation of facilities (i.e. classrooms, schools or offices)".
While the US proposal constantly "recognises that education to a large extent is government function and it does not seek to displace public education systems", it outlines the "obstacles" to free trade in higher education services and identifies areas where member-nations should do more to promote greater trade liberalisation.
These "obstacles" include "a tax treatment that discriminates against foreign suppliers" and "subsidies for higher education, adult education, and training [which] are not made known in a clear and transparent manner".
The background paper to the GATS even poses the question "whether higher education can be profitable for private investors without public subsidies" — implying that, under the terms of national treatment, public subsidies may have to be provided even to foreign private service providers.
Such terms could devastate Australia's public university system. But, for its part, the Australian government is no passive victim of US trade aggression. John Howard's government fully supports GATS and trade liberalisation, and intends to use it to justify further privatisation.
GATS at present only applies to areas of service where members "permit private education" and not to those "countries that maintain exclusively public systems".
But, as a result of deliberate government policy to force public universities to garner greater funding from private sources, Australia's universities can no longer claim to be "exclusively public systems".
Further, while GATS' bottom-up nature means that those public services considered "public goods", such as education and health care, can still be spared from trade liberalisation (at least for the moment), the federal government has already committed Australia to liberalising the "provision of private tertiary education services, including at a university level".
Canberra's motivations for backing an extension of GATS are not only related to its domestic agenda for privatising higher education. It also believes that further liberalisation of trade in education services will open up profitable markets, particularly in Asia, for Australian education providers.
Such liberalisation has already been earmarked in initial negotiations on a bilateral free trade deal between Singapore and Australia.
Australian universities have spent much of the last 10 years building up a presence in south-east Asia, principally to attract overseas students to study here. The ability to establish foreign offshoots of Australian institutions would obviously be enormously appealing to this country's increasingly profit-minded university vice-chancellors.
The federal government is also a firm backer of a new round of trade talks. A joint communication with New Zealand and Chile in 2000 argued, for instance, that no service sector should be excluded from negotiation as a matter of principle and that negotiations should achieve higher levels of liberalisation in all service sectors.
GATS is a clear and present threat to public education, in this country and throughout the region, and is already provoking considerable opposition from within the sector.
Both the National Tertiary Education Union and the National Union of Students have already adopted positions opposed to it, and GATS will be a major target for campaigners opposed to the launching of a new WTO round at Qatar.