Trade in higher education: The role of the General Agreement on Trade in Services (GATS)

By Jandhyala B.G. Tilak. Internationalization of higher education has been evolving over the years. Today, trade in education has become an important framework under which cross-border mobility of students, institutions, programmes, and teachers takes place. The General Agreement on Trade in Services (GATS) has systematized and formalized the conditions for trade in services including education. This book provides a detailed analysis of various dimensions of the GATS and its implications for development of higher education, especially in developing countries. The analysis also provides a critical assessment of the benefits derived and potential threats posed by trading in education. It is hoped that the study will provide useful insights on the issue for educational policy-makers, planners, and researchers.
Fundamentals of educational planning
Preface
The higher education sector has in recent years been attracting increasing attention, largely due to its contribution to improving productivity, increasing economic growth, and enhancing innovation and technological capability. The expansion of the sector is considered a necessary condition for growth and expansion in the global economy.
Higher education has traditionally been provided by public authorities through public institutions. However, the pressure to expand, coupled with the fiscal constraints of the state, has compelled many governments to adopt market-friendly reforms to support this growing sector. These reforms included cost-recovery and income-generating measures in public institutions and encouragement of the establishment and expansion of private higher education institutions, which do not depend on state funding. A further extension of the marketization process is the view that education can be treated as a tradable commodity.
The creation of the General Agreement on Trade in Services (GATS) reflects the formalization of market processes and procedures for international trade in services. GATS encompasses all internationally traded services, including education. Within the education sector, GATS covers five categories of education services: primary, secondary, higher, adult, and ‘others’. Trade in education under the GATS framework takes place in four modes: (1) cross-border supply of the service (where consumers [students] remain within the country); (2) consumption abroad (where consumers cross the border); (3) commercial presence of the provider in another country (institutional mobility); (4) presence of persons in another country (staff mobility).
Two of the most important and visible forms of trade in education are the cross-border mobility of students and cross-border institutional mobility. The internationalization of education is not new. Students have been going abroad to study for decades – motivated by a lack of facilities at home or the attraction of better education opportunities abroad, or the desire to learn a new language and experience new cultures. Countries in the European
Union encouraged this tendency through programmes such as ERASMUS. But the sudden spurt in student mobility in recent years is a result of globalization, and it has become a financially rewarding experience for some countries (particularly anglophone ones), where cost-recovery levels are high. Today, nearly 3 million students study abroad, and the market for cross-border students is rapidly increasing. Similarly, the cross-border mobility of institutions is also on the rise. Countries such as Malaysia, Singapore, Hong Kong, United Arab Emirates, and Qatar host branch campuses of a number of foreign universities.
In general, students move from less developed to developed countries, whereas institutions move from developed to developing countries. In both cases, money moves from developing to the developed countries. The trade in education, through all modes, accounts for billions of dollars and can be highly profitable. Countries such as the United States, the United Kingdom, and Australia attract large numbers of students, establish institutions overseas, and are the biggest beneficiaries of trade in education.
In this booklet, Professor Tilak provides a detailed analysis of the internationalization of higher education under the GATS framework. While discussing the issues related to trade in education, he points to the positive and negative aspects of a trade-based perspective to higher education provision. He argues that the developed countries have disproportionately benefited from trade in education, while the disadvantages chiefly affect developing countries. Indeed, if foreign universities are allowed to exploit and dominate the imperfect education markets operating in developing countries, this could weaken the higher education system in those countries. He offers some suggestions on the proper response in such contexts, which may interest policy-makers from developing countries The Editorial Board is grateful to Professor Tilak for bringing this new perspective on the development of higher education, thus contributing to this important domain of research and policy.
Françoise Caillods and N.V. Varghese, General Editors.